To secure funds to expand battery business
Samsung SDI is reviewing potential ways to secure funding to invest in its battery business.
It is reviewing the possibility of splitting off the battery business, called Energy Solution business by the firm.
The plan was discussed in a recent meeting between key executives, sources within the company told TheElec.
This is the first time that Samsung SDI has discussed internally potentially splitting off its battery business.
The matter was the only thing that was discussed at the senior executive level meeting.
They haven’t finalized how they wish to split off the business or a time tablet, however, sources said.
Samsung SDI is planning to spend up to 2 trillion won this year in its production facilities.
However, it is in need of funding as it is in talks with companies such as Rivian and Stellantis on forming a joint venture to supply them with batteries.
Compatriots LG Energy Solution and SK Innovation are spending more than Samsung SDI in their battery businesses a year __ between 3 trillion won to 4 trillion won.
There was also an opposing voice during the meeting, the sources said, questioning whether splitting off the business was viable.
The decision will need approval from Samsung Group and funding wasn’t the only issue at hand, the sources said but didn’t elaborate on what the other issues are.
This likely means the plan will need approval from Samsung Electronics vice chairman Lee Jae-yong, the leader of the entire Samsung business group, which includes Samsung SDI.
Since Lee was freed on August 24, Samsung announced a 240 trillion won spending plan for the next three years, but battery was noticeably absent in the announcement.
Samsung SDI has throughout the years either transferred or ended its OLED and plasma display panel businesses. Since merging with Cheil Industries’ material business, it has focused on two main businesses __ battery and electronic materials.
Battery accounts for 77% of its sales as of last year. Splitting off this business and just leaving the electronic material business could face shareholders’ disapproval.
There was also a possibility that Samsung SDI could sell its electronic material business to secure funding, a separate group of people familiar with the matter said.
In 2019, Samsung SDI has sold its anisotropic conductive film business and restructured its electronic material R&D assets.
Materials for semiconductors and displays has sure customers in Samsung Electronics and Samsung Display. The electronic business could be sold at a high price with multiple companies likely to show interest to enter Samsung’s supply chain, the people said.
Internally at Samsung SDI, there was a worry that if they don’t invest in its battery business properly this year, they could lose out to rivals, the sources said.
However, the discussion will take time as it was a big matter and the company will likely continue to discuss it with Samsung Electronics Business Support TF.
