Samsung SDI returns to black in Q1 on battery demand recovery

A rendered image of Samsung SDI's exhibition booth for the InterBattery 2026 trade show in Seoul / Courtesy of Samsung SDI

Samsung SDI on Tuesday reported a first-quarter operating loss of 155.6 billion won ($115.3 million) and revenue of 3.58 trillion won, as it sharply narrowed losses and returned to net profit.

The company said revenue rose 12.6 percent year-on-year, while operating loss contracted 64.2 percent. Net profit came to 56.1 billion won, marking a return to profitability.

By segment, the battery business generated 3.35 trillion won in revenue and posted an operating loss of 176.6 billion won, while the electronic materials business recorded 222 billion won in revenue and an operating profit of 21 billion won.

Samsung SDI said battery performance improved as demand recovered across key applications, including energy storage systems (ESS), uninterruptible power supply, battery backup units (BBU) and power tools. Revenue rose 12.5 percent year-on-year, while losses narrowed by more than 61 percent.

The improvement was driven in part by increased Advanced Manufacturing Production Credit benefits, supported by expanded U.S.-based ESS battery production and sales, as well as higher shipments of high-value cylindrical batteries.

The electronic materials business also posted solid results, backed by stable demand for semiconductor materials and a rebound in display materials sales driven by stronger shipments of flagship smartphones from major customers.

During the quarter, Samsung SDI cited expanded ESS orders, greater diversification of its EV battery customer and product portfolio, and continued progress in next-generation battery technologies.

In the ESS segment, the company secured new prismatic lithium iron phosphate battery projects and signed supply agreements for high-power BBU batteries. It also established a materials supply chain in response to the United States’ Prohibited Foreign Entity regulations, laying the groundwork for future growth.

In the electric vehicle (EV) battery business, Samsung SDI signed a multiyear supply agreement with Mercedes-Benz, securing all three major German premium automakers as customers. It also diversified its portfolio by winning a project to supply tabless cylindrical batteries for hybrid EVs.

At InterBattery 2026 in Seoul in March, the company unveiled a pouch-type all-solid-state battery sample under development for physical artificial intelligence (AI) applications. It also introduced next-generation lithium-metal battery technology aimed at improving lifespan and safety.

Samsung SDI expects a gradual recovery in performance from the second quarter, supported by improving demand conditions.

In the EV battery segment, demand is expected to rise, driven by expanded incentives in Europe and the increasing total cost of ownership of internal combustion engine vehicles. The company plans to ramp up new projects as scheduled while improving profitability through higher utilization.

For ESS batteries, Samsung SDI plans to expand U.S. production and sales to meet growing demand from AI data centers, while also participating in Korea’s government-led ESS procurement programs for state utilities and grid projects.

In the small battery segment, the company aims to drive growth through differentiated products such as tabless and high-power batteries, supported by rising demand from AI data center construction and a recovery in the micro-mobility market.

In electronic materials, Samsung SDI expects steady demand for semiconductor and OLED materials to continue and plans to expand sales of advanced patterning materials and OLED solutions.

“Uncertainty in the global business environment is expected to persist in the second quarter,” a company official said. “We will continue to execute our strategies across all business areas as planned and aim to return to quarterly profitability in the second half of the year.”