A Producer of Lithium-ion Battery Separators

A lithium-ion battery separator (LiBS) production line at SK IE Technology

SK Innovation will begin an initial public offering (IPO) process for SK IE Technology (SKIET), a wholly owned subsidiary. The move is intended to secure investment funds for future businesses such as batteries as the company’s oil refining business, which used to be a "cash cow" for it, was hit hard by the spread of the new coronavirus.

SKIET announced on June 9 that it has sent requests for proposals (RFPs) to Korean and foreign securities companies to select a lead manager for the IPO. SKIET will select the lead manager within July.


SKIET's main business is lithium-ion battery separator (LiBS) production. LiBS is a key material for electric vehicle batteries. It is the first company in Korea and the third in the world to develop its own LiBS production technology. It has developed the world's first 5-㎛ thin film product and commercialized two-sided simultaneous coating technology.

SKIET has also actively invested in expanding LiBS production facilities in anticipation of a surge in demand for EV batteries. Its production volume will increase to 1.21 billion square meters in the second half of 2021 when Production Lines 12 and 13 in Jeungpyeong, North Chungcheong Province of Korea, and factories in China and Poland are completed. "Considering tight supply in the one-tier separator market, SKIET's operating profit in 2021 will exceed 300 billion won," said Lee Dong-wook, a researcher at Kiwoom Securities Co., estimating the value of SKIET's separator business at about 6 trillion won.

SKIET also produces flexible cover windows (FCWs) that replace glass in flexible displays for foldable phones. It completed a FCW production line in Jeungpyeong in 2019 and will begin commercial production in the second half of 2020.

SK Innovation posted an operating loss of 1.775 trillion won in the January-April period, the largest since its foundation. Refining margins are directly linked to the oil refiner's earnings. SK Innovation’s refining margin has been in negative territory for about three months since the third week of March 2020.

Industry watchers speculate that SK Innovation may use the funds secured through the IPO to settle a battery lawsuit with LG Chem. The U.S. International Trade Commission (ITC) made a preliminary ruling on SK Innovation's early defeat in a business secret violation lawsuit filed by LG Chem in February. Many predict that the two companies will settle before this October when the final ruling is due out. Industry insiders expect the settlement amount to range from 500 billion won to 2 trillion won.

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