Growth of Ni-rich Battery Market to Accelerate
The authors are analysts of NH Investment & Securities. They can be reached at j.ko@nhqv.com. -- Ed.
Likely to play a central role in long-term battery materials market trends, we believe that high-Ni cathode materials boast strong growth potential. We note that EV makers are increasing their purchases of Ni-rich cathode batteries, and in response, battery makers are strengthening their high-Ni battery production strategies. Once zero module batteries based upon Ni-rich cathode materials are commercialized, the high-Ni battery market will be primed to expand even faster.
Growth of Ni-rich battery market to accelerate
For June, the NH I&S Tech Team recommends L&F and the battery sector. With demand for high-nickel (high-Ni) cathode materials set to rise, suppliers’ strategic efforts to beef up their high-Ni cathode materials businesses are becoming more visible. Although LFP batteries are currently attracting attention in the cathode market, they are unlikely to undermine the growth potential of Ni-rich batteries—although LFP offers a cheaper price tag, it is inferior to high-Ni in terms of energy density, weight, and volume. And, once zero module batteries based upon Ni-rich cathodes are commercialized, the high-Ni cathode market should grow more strongly.
Semicon capacity expansions to benefit equipment and handset players; outlook bright for OLED materials industry
Semicon: Noting that DRAM manufacturers are planning to boost their capacity investment from 2H21, we believe that the degree of DRAM supply increase will exceed current market expectations. And, it remains uncertain as to whether current PC and server memory demand levels will sustain beyond 2022. Fixed contract prices for DRAM are likely to fall from 1Q22. Strengthening investment in DRAM bodes well for global equipment players. Of note, there is speculation that TSMC will push up its investment in US fabs (one site → six sites). Meanwhile, Samsung Electronics (SEC) announced in May that it will expand its investment in US fabs, and Global Foundries is planning an IPO. Increasingly difficult scaling challenges in producing DRAM should translate into greater equipment input and unit prices.
Handset: Influenced by Covid-19 effects and limited semicon supply, global smartphone shipments should reach around 1.42bn units (+6.6% y-y) in 2021, a slightly lower level than current market expectations. However, after bottoming out in 2Q21, smartphone shipments should start picking up from 3Q21 in line with an easing in semicon supply shortages, the fading of Covid-19 effects, and the advent of peak seasonality.
Display: We view OLED materials players as offering the best investment choice within the display industry, believing that rising demand for OLED panels signals attractive long-term growth potential. Also, a high entry barrier should dissuade any potential newcomers. Global demand for OLED materials is projected to climb from 110 tons (+25% y-y) in 2021 to 126 tons (+14% y-y) in 2022, before further upping to 143 tons (+13% y-y) in 2023.