By Kim Yoo-chul
Staff Reporter
Samsung SDI said Tuesday its battery business marked a quarterly record thanks to strong demand for lithium polymer batteries.
Revenue during the July-September period was 574 billion won, or $493 million, an increase of 15 percent from the previous quarter.
"The demand for secondary batteries will rise 12 percent in the fourth quarter from the third quarter. SDI, led by CEO Kim Soon-taek, will inject more capital to sharpen energy storage system (ESS) business and see more chances to supply our lithium-ion batteries used in electric cars in the United States and Europe," company spokesman, Seo Hae-su, said.
Seo added PC demand due to the introduction of Microsoft's new Windows 7 and the approaching year-end season are expected to lift demand for the rechargeable batteries used in mobile phones and notebook PCs.
The company reported an 88.1 billion won or $75.5 million operating profit for the third quarter. The consolidated basis results increased from an operating profit of 80.1 billion won on a yearly basis.
SDI's plasma business unit was another contributor to the impressive quarterly result.
Its revenue from plasma screens rose 9 percent to reach 545 billion won in the third quarter.
"Global plasma panel demand is likely to increase 13 percent in the fourth quarter. SDI expects the plasma business to rise 13 percent in the October-December period," said the company.
Plasma technology has been on the wane in the global flat-screen TV industry. But SDI's plasma business, now guided by Samsung Electronics, is continuing on slimmer hopes of capitalizing on the pricey, larger-sized units.
"Samsung SDI is expected to maintain a solid financing structure and liquidity despite losses in an unprofitable plasma business. But competition with Japanese rivals in the battery industry are pressuring margins at the company," Song Jeung-hue, a senior researcher at Korea Ratings, said.
"Increased pressure on battery prices and more investment toward its panel affiliate will burden SDI," Jang Jeong-hoon, an analyst at Samsung Securities, added.
For its next-generation flat-screen panels (AM OLED), SDI is running a 50:50 joint venture with Samsung Electronics called Samsung Mobile Display (SMD).
To meet rising demand for AM OLED panels for phones, SMD is planning to invest 2 trillion won to boost its production capacity in the latter half of next year, according to analysts.