Samsung SDI, Bosch to Form Joint Venture
By Kim Yoo-chul
Staff Reporter
Samsung SDI, the world’s third-largest producer of rechargeable batteries, signed a deal with German auto parts maker Bosch GmbH, Monday, to form a 50:50 joint venture to produce rechargeable batteries for hybrid electric vehicles (HEV).
The venture, named ``SB LiMotive’’ will be constructed either in Cheonan, South Chungcheong Province or Busan, South Gyeongsang Province and start production in 2010 with an initial combined capital of $20 million, Park Young-woo, the company’s executive vice president said in a press briefing.
The deal comes a month after Bosch clarified its intention to select a partner to help produce lithium-ion battery cells by manufacturing in-house to cut costs.
``Total investment is initially expected at $500 million over the next five years, however, the amount could be quadrupled depending on the market situation,’’ Park added.
Samsung SDI said the venture with the No. 1 auto electric devices manufacturer will fuel momentum for reshaping the structure of the battery market currently dominated by Japanese car makers.
``We are aiming to produce two million lithium-ion battery cells for HEVs in 2010,’’ its spokesman said. The company is set to produce battery packs for HEVs from 2011.
Samsung engaged in detailed talks with the world’s leading automakers including BMW, Audi and Ford of the U.S. for the development of the batteries, officials said.
As the demand for PCs, mobile phones and other electronics applications has been steadily soaring, Samsung SDI now forecasts its environment friendly secondary cell business will improve.
``The time is ripe to inject more cash into the medium- to large-sized battery business to escape from our traditional mobile device-focused business,’’ the spokesman said, adding his company will grab a 30 percent market share in the global secondary battery sector by 2015.
According to Hiedge, a Japan-based research firm, the HEV market will reach 5 million by 2015, up 14 times from 365,000 in 2006.
Restructuring Sign?
Speculation has been unexpectedly high that Samsung SDI, which is a sister company of Samsung Electronics, will hand over its plasma display panel (PDP) unit to Samsung Electronics for synergy in Samsung’s overall flat screen business.
Unlike the bullish moves by Samsung Electronics on liquid crystal display (LCD) TVs, Samsung SDI, the world’s No. 2 maker of PDP panels, has been struggling to offset falling profits due to volatile PDP TV prices and the faster shift by consumers towards clearer LCD TV sets.
``Samsung SDI has distinctive PDP technologies, however, that would be meaningless without massive investment,’’ a source from Samsung Electronics said. ``It is a possible scenario to reshape Samsung’s overall TV strategy,’’ according to the source.
Meanwhile, Samsung Group insiders say the new blue-print for a possible joint venture with Samsung Electronics and Samsung SDI in next-generation displays has been prepared for similar reasons.
``It seems too early to unveil such details, however, it is highly likely to close their respective active-matrix organic light-emitting (AM OLED) divisions for a win-win strategy as the global AM OLED market led by Samsung SDI has reached economies of scale,’’ a group insider told The Korea Times.
Chung Ho-kyoon, vice president of Samsung SDI said his company will increase the production yield of its AM OLED panels by 80 percent this year. Production yield is a key indicator in assessing the prospect of a component manufacturing business as it shows how reliably the maker can meet demands from clients.
``Samsung SDI needs `cash’ to push up its AM OLED business and Samsung Electronics needs `technology’ for mass-production of such panels,’’ the insider said, adding the outlines of such plans will be revealed by the end of this month.
AM OLED, often called ``dream displays,’’ are seen as promising technology because they are self-luminous and, unlike LCDs, do not require expensive backlighting. This results in thinner displays that consume almost 40 percent less power, key advantages for mobile phones and other portable devices.