After the Galaxy Note 7 battery fiasco, Samsung Electronics has decided to temporarily stop using batteries from Samsung SDI in the Galaxy Note 7. This news comes straight out of the company’s homeland South Korea. Various analysts predict that the Galaxy Note 7 recall could cost Samsung as much as $1 billion.
Samsung SDI provides around 70 percent of batteries used in the Galaxy Note 7. The rest of them are supplied by Chinese battery manufacturer ATL. After reports of explosions in multiple Galaxy Note 7 units due to faulty batteries, Samsung had to recall over two million units.
Samsung is expected to increase the order of battery units from ATL for the rest of the Galaxy Note 7 devices. Samsung SDI stock price has dropped 2.76 percent after reports of faulty batteries. Samsung SDI reportedly started developing non-removable batteries back in 2014 but failed to offer the required number of units for the Galaxy S6 as rivals ATL and LG Chemicals fared better in supplying the stock.
Lee Seung-hyuck, an analyst at Korea Investment & Securities, said, “For the global recall of 2.5 million units, Samsung SDI is expected to bear the expense for most of the battery parts. Together with the possible sales decline of Galaxy Note 7, Samsung SDI’s operating loss may stand at around 18 billion won ($16 million) in the third quarter.”