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Samsung SDI cuts battery business from China, expands at home

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Samsung SDI cuts battery business from China, expands at home

Samsung SDI Battery Cell Manufacturing Plant in Xi'an, China / Courtesy of Samsung SDI
Samsung SDI Battery Cell Manufacturing Plant in Xi’an, China / Courtesy of Samsung SDI


By Baek Byung-yeul

Samsung SDI has scaled back its battery business in China as part of a strategy to streamline overseas production lines by suspending non-core and low-performance activities, company officials said Monday.

The company recently informed the Financial Monitoring Service that it had closed its battery manufacturing subsidiaries in China – Samsung SDI Changchun Power Battery and Samsung SDI Wuxi Battery Systems.

Samsung SDI has liquidated both battery units due to their poor performance. The operation of the Wuxi subsidiary had already been virtually suspended, with no sales generated in 2020 and 2021. The Changchun subsidiary, which Samsung SDI acquired from Magna Steyr, also failed to secure a new contract and been liquidated after executing all pending orders.

Although the company said the withdrawal from China was part of streamlining its overseas production lines, the battery industry speculated that the withdrawal could be related to Chinese government regulations on Korean companies. batteries.

In an effort to support domestic battery manufacturers, the Chinese government decided in 2016 not to offer subsidies to electric vehicles equipped with batteries from Korean manufacturers. It was Beijing’s apparent retaliation against Korean companies after bilateral relations soured amid diplomatic tensions over Seoul allowing the deployment of a US Terminal High Altitude Area Defense (THAAD) system. here.

However, a Samsung SDI spokesperson denied the speculation, saying the withdrawal of its battery factories in China was the company’s choice to streamline its operations there.

“We have already announced through the disclosure that we will liquidate two of the Chinese subsidiaries to improve management efficiency. The issue of withdrawal has no relation to such speculation,” the spokesperson said. “We still operate battery cell manufacturing lines in Tianjin and Xi’an.”

Samsung SDI Research Center in Suwon, Gyeonggi Province / Courtesy of Samsung SDI
Samsung SDI Research Center in Suwon, Gyeonggi Province / Courtesy of Samsung SDI


As the company streamlines its operations in China, the battery maker is also expanding its research and development capabilities at home.

The company said on Monday it had started construction of a pilot production line for solid-state batteries at its research center in Suwon, Gyeonggi Province.

Solid-state batteries are considered the “next big thing” in the battery industry because they are potentially safer and have higher energy densities by using solid electrolyte materials. More research is needed before they can be mass-produced, but the battery industry assumes that companies that have secure technology for solid-state batteries will be able to lead the industry highly. competition for electric car batteries.

Samsung is known to have the highest level of capabilities in solid state battery research. In 2020, Samsung Advanced Institute of Technology published its research results in the scientific journal Nature Energy on a solid-state battery that can be charged and discharged more than 1000 times with a range of 800 kilometers on a single charge.

“The pilot production line is being built in an area of ​​about 6,500 square meters. The line will be called S Line,” the company’s spokesperson said.