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    Samsung’s battery business gets record profit, thanks to higher EV demand

    Business
    By 

    Last updated: August 7th, 2023 at 05:38 UTC+02:00

    A few days ago, Samsung Electronics announced a 95% drop in its operating profit due to the worst downturn in the history of semiconductor chips. However, the company's battery manufacturing and electronics material business, Samsung SDI, isn't doing so badly. In fact, it is thriving, and it has recorded its highest-ever second-quarter revenue and profit.

    Samsung SDI reported that its revenue during Q2 2023 was KRW 5.84 trillion (around $4.48 billion), while its operating profit was KRW 450.2 billion (around $345.95 million). Compared to Q2 of 2022, the company's revenue grew 23.2%, while profit grew 4.8%. For four quarters in a row, Samsung SDI's revenue has been more than KRW 5 trillion, which is a great sign. The company's operating margin was around 7.7%.

    The company mentioned in its press release that its Energy business accounted for KRW 5.27 trillion of the company's total revenue, while its operating profit was KRW 388.1 billion. Compared to a year ago, its revenue and profit rose by 29.4% and 58.5%, respectively. Its EV (Electric Vehicle) battery and ESS (Energy Storage System) business saw robust sales thanks to a recent surge in demand for premium EVs that use Samsung SDI's P5 batteries. Its Small Battery business also posted solid results as sales of high-powered cylindrical batteries increased. The sales of pouch batteries decreased, though, as the global laptop market crashed.

    The firm stated that its Electronics Materials business generated revenue of KRW 570.5 billion, which is 14.7% compared to last year. The operating profit was KRW 62.1 billion during Q2 2023, a 66% decline compared to Q2 2022. The operating margin of this business arm was around 10.9%. The company seems positive for its immediate future as sales of EVs are going strongly, while the PC and smartphone market is expected to recover in Q4 2023. The company recently signed an EV with Stellantis to build a second EV battery plant in the US, and it will be under the name of StarPlus Energy. By 2027, it will have a total battery production capacity of 100GWHr in the US.

    Yoon-ho Choi, President and CEO of Samsung SDI, said, “In spite of the continued global economy slowdown, our efforts produced stellar results of posting a record-high second-quarter revenue and surpassing KRW 5 trillion in quarterly revenue for four consecutive quarters. Samsung SDI will continue to secure ‘super-gap' technological competitiveness, such as solid-state batteries and 46-phi cylindrical batteries, in order to drive our continued growth. We will anchor on ESG management as our future business edge to rise as a global leader in the market.

    Business EarningsSamsung SDI

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