Slow Sales
The shares of Samsung SDI and LG Chem in the global mobile and IT device lithium-ion battery market are likely to fall for the first time in four years this year.
According to market research firm B3, the two leading companies increased their supply by 1.3 percent year-on-year, while the overall growth of the market reached 6 percent this year. In the first half, their sales declined by 5.7 and 0.7 percent from a year ago, respectively.
This is mainly because of Chinese companies. Those in the top 10, such as ATL and Lishen, increased their shipments by no less than 19.3 percent, and their share jumped from 21.6 to 24.3 percent between 2014 and 2015. ATL recently decided to increase its production capacity by 40 percent this year, up 10 percentage points from the previous goal, to meet an increasing demand.
Chinese manufacturers are poised to catch up with Korean companies in the display panel market, too. According to market research firm IHS, Tianma and BOE increased their nine inch or smaller display panel shipments each by 10.6 and 10.1 percent, whereas the rate of increase were 8.0 and 7.5 percent for Samsung Display and LG Display, respectively. Chinese mid-sized and small smartphone display panel suppliers’ market share went up from 11.3 and 12.1 percent between the second quarters of 2014 and this year as well.
Under the circumstances, Samsung Electro-Mechanics is adjusting its production volume these days by, for instance, halting the purchase of CNC milling machines for metal case production. LG Innotek’s shares in the camera module and PCB markets are have edged down from 15.6 to 15.4 percent, and from 3.5 to 3.2 percent, between last year and this year.
This, which can be attributed to the current stagnation of the smartphone market, is why Korean smartphone component manufacturers are turning their eyes toward businesses other than mobile and IT. For example, Samsung SDI and LG Chem are focusing on electric cars, energy storage systems, and the Internet of Things nowadays. Samsung SDI is aiming to boost the ratio of the sales of its non-IT business to battery business sales from 16 to 72 percent by 2020, and Samsung Electro-Mechanics and LG Innotek are paying more attention to facets like auto parts and wireless charging applications.