Samsung SDI confirmed after the shareholder’s meeting is developing lithium iron phosphate (LFP) batteries.
▲ Photo source: Samsung SDI
Most of the world’s lithium iron phosphate batteries are currently produced by Chinese companies, but Korean battery makers LG New Energy and SK On have been reluctant to develop them. In terms of performance, LFP batteries have lower energy density than nickel-based batteries but are also relatively more stable and cheaper.
Samsung SDI CEO Choi Yoon-ho told reporters after the shareholders’ meeting that LFP batteries are one of the key platforms in the electric vehicle sector. He said Samsung SDI is trying to develop LFP batteries in order to diversify its business and customers.
The South Korean battery maker has said in the past that it plans to focus on high-end batteries aimed at providing cheap batteries in a cobalt-free form instead of LFP. he said Samsung Chairman Lee Jae-Yong emphasized the importance of technology and talent during his visit to Samsung SDI once upon a time. This should be the reason why Samsung SDI decided to develop more technology lines.
Meanwhile, Samsung SDI is also expected to complete the construction of a solid-state battery production line. According to the report, the production line will start trial production this year, and commercial production is planned to start in 2027. In addition, Samsung SDI also plans to supply 4680 batteries to BMW or Volvo instead of Tesla.
Samsung SDI’s electronic materials business reported revenue of 624.3 billion won (currently about RMB 3.278 billion) in the fourth quarter of last year, down 11.9 % from the previous year’s 708.7 billion.
In terms of operating profit, Samsung SDI’s operating profit for the fourth quarter of last year was 490.8 billion won (currently about RMB 2.699 billion), much higher than the 265.7 billion won in the same period last year, a year-on-year jump of 84.7%. Operating profit from the energy business was 359.1 billion won, up 198.8% year-on-year, while operating profit from the electronic materials business was 131.7 billion won, down 9.5% year-on-year and slightly lower than the decline in revenue.
Samsung SDI disclosed in their earnings report that their revenue and operating profit in the fourth quarter of last year were both record highs. For the full year 2022, Samsung SDI’s revenue is 20.12 trillion won (currently about RMB 110.66 billion), up RMB 6.57 trillion from 13.55 trillion in 2021, an increase of 48.5% year-over-year.
As in the fourth quarter, Samsung SDI’s full-year revenue growth was also driven by increased revenue from its energy business, including electric vehicle batteries, which posted full-year revenue of 17.57 trillion won, up 6.62 trillion won, or 60.4% year-over-year. The electronic materials business reported full-year revenue of 2.56 trillion won, down from 2.61 trillion won in the previous year and down 1.9% year-over-year.
In terms of profits, the report showed a full-year operating profit of 1.81 trillion won (currently about RMB 9.955 billion), compared with 1.07 trillion won the previous year, an increase of 69.4%, with the energy business contributing 1.25 trillion won, an increase of 133.2%.
Net profit last year was 2.04 trillion won (currently about RMB 11.22 billion), also up significantly from 1.25 trillion in 2021, up 63.1% year-on-year.
Notably, Samsung SDI disclosed in their earnings report that last year’s revenue of 20.12 trillion won was the first time their annual revenue exceeded 20 trillion won.
Like other companies under Samsung, Samsung SDI gave their expectations for the future in their earnings report for the fourth quarter.
In the earnings report, Samsung SDI mentioned that in the first quarter of this year, P5 battery sales will lead to increased sales in the automotive and smart energy storage system battery business, and they also expect to see an increase in automotive and smart energy storage system battery sales year-over-year, and they also expect higher sales of automotive batteries as P5 batteries are used in new models and new production lines come on line.
For automotive batteries, Samsung SDI expects the market to reach $159 billion this year (currently about RMB 1.08 trillion), up 39% year-over-year, despite concerns. Their concerns are mainly about the multiple negative factors that are expected to affect the demand for automobiles.
In the earnings report, Samsung SDI disclosed that they plan to continue the growth momentum driven by the entry of P5 batteries into the high-end electric vehicle market, and they will also continue their efforts to acquire new projects and develop and produce next-generation products such as solid-state batteries to pave the way for medium to long-term growth.
