Separator Competition
China’s SEMCORP, the world’s No. 1 maker of separators, is set to open a plant in Europe soon. It is expected to expand its market share in Europe through a price war and heat up competition with Korean and Japanese separator makers in the European market.
SEMCORP is expected to complete its plant in Debrecen, Hungary. The Chinese company invested about 340 million euros (US$365 million) in the plant. It dispatched about 100 employees from China to the Hungarian plant and will assemble a team with local people to start the plant’s operations within this year.
SEMCORP will find a new breakthrough in Europe as the United States begins to reduce its reliance on Chinese supply chains with the implementation of the Inflation Reduction Act (IRA). SEMCORP said a year ago that it planned to build a plant in the United States, but it is currently unclear when the plant will be operational. This is because IRA guidelines regard the separator as a final component of batteries along with anode and cathode materials.
SEMCORP has maintained the top spot in the global separator market since overtaking Japan’s Asahi Kasei in 2018. The company had a production capacity of 5.67 billion square meters as of 2022, according to SNE Research. In second place is Chinese company Sinoma (1.848 billion square meters). It is followed by SKIET (1.53 billion square meters) and Asahi Kasei (1.52 billion square meters), while Chinese company Shenzhen Senior (1.19 billion square meters) is catching up with Korean and Japanese companies by ramping up its capacity.
In the past, SKIET, Asahi Kasei, and Toray had a three-runner race in the world separator market. But while waging a price war, Chinese separators have emerged as global separator makers. Although Korean and Japanese separators are superior in terms of quality compared to Chinese products, Chinese companies’ separators are much cheaper than those of Korean and Japanese companies.
Analysts say that Chinese companies can dial up their shares of the European separator market by offsetting their lack of technology with lower prices. They also supplied separators to CATL and BYD, two major Chinese battery makers, which have grown based on domestic demand in China, so their experience in responding to large-scale demand cannot be ignored.
China’s CATL, a major customer of SEMCORP, is also planning to build a 100 GWh battery plant in Debrecen, Hungary, following the operation of its first overseas production base, the Erfurt plant in Germany. With customers such as Benz and BMW in Europe, it is important to respond to the European market as Chinese battery companies such as CATL, SVOLT, Gotion High-Tech, and Envision AESC are entering Europe.
In the case of SKIET, it attracted a large-scale funding from the International Finance Corporation, an international financial organization under the World Bank, on May 24 to meet demand for electric vehicle batteries in Europe. The US$300 million will be used to invest in the expansion of its lithium-ion battery separator production plant in Poland.