Published in Mobiles

Samsung SDI tries to prove its batteries are safe

by on24 November 2016


Fallout from the Note fiasco

Although widely scape-goated for the Galaxy Note 7 fiasco, Samsung’s battery division is quietly reassuring anxious clients which ironically include Apple that its batteries are safe.

Samsung SDI TV and smartphone screens and batteries were key to Samsung Electronics' rapid growth. It had looked to a bright future thanks to the development of electric vehicle batteries and renewable energy storage systems.

Samsung Electronics quickly knifed the battery maker for causing some Note 7 devices to catch fire. However, it has since widened its investigation into the exact cause of the fires in the phones after replacement phones using batteries from China's Amperex Technology also caught fire.

As a result SDI has lost around a fifth of its market value since the problem first emerged, and its third quarter operating loss was more than double that of a year earlier. Samsung Electronics is laughing all the way to the bank as the Note 7 recall hardly harmed the outfit at all.

SDI has said the battery problem was limited to the Note 7, and it has carried out reliability checks on products with major customers and found no problems. It has set up teams to improve product safety, and allowed customers to check batteries, which, it says, meant temporary shipment delays for a couple of customers.

Kim Hong-gyeong, SDI's chief financial officer said the company put the utmost priority on battery reliability, and will use this opportunity to further enhance customer trust.

The feeling is that SDI will eventually reassure existing customers, but it could be a minus factor when it tries to attract new customers.

SDI has around a 25 percent market share in small device batteries. Its close ties to Samsung Electronics have helped SDI build scale and reputation, and secure orders from the likes of Apple. Close to a third of its revenue in the first half year came from other Samsung companies.

Samsung Electronics benefited by beating rivals to cutting-edge technologies - from curved screens to faster chips and higher-density batteries.

SDI incorporated new materials and technology to meet Samsung's request for bigger battery capacity for the Note 7, which increased by a sixth from the previous model. The battery capacity might have harmed its reliability.
Our money is still on it being a design problem.

Last modified on 24 November 2016
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