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Korean Secondary Battery Leaping 10 years, Overtaking Japan

SEOUL, KOREA – Having surpassing Japan last year, Korea is expected to become the global leader in the secondary battery industry this year. The status of “Secondary Battery Korea” will rise even higher as LG Chemical(LG Chem) is expected to overtake second-place Panasonic (Panasonic took over Sanyo in 2008) in the third quarter.

Former secondary batteries powerhouse Japan has gradually lost its competitiveness due to strengthening of the yen and having seen its major powerhouse companies, Sony and Panasonic undergoing extensive restructuring. China has yet to increase its market share because it has not attained a trusted brand name, which is essential for success in the industry. Korea overtook Japan as the largest rechargeable batteries supplier, attaining 40% of the global market share. Samsung SDI is the unanimous number one global manufacturer of secondary batteries, and the third-largest manufacturer LG Chem is anticipated to surpass Panasonic and subsequently move into the number two slot shortly. Thus, market analysts are predicting that Korea will inevitably take over the secondary batteries market, similar to what occurred in the global semiconductor market.

Becoming Global Leaders, the “Secondary Battery Korea”

LG Chemical’s electric vehicle battery production line

Japan’s research house Institute of Information Technology (IIT) recently released in its first quarter report stating that Korea is expected to hold 43.3% of the market share in secondary batteries, while Japan is likely to hold 31.6%, a difference of 11.7 percentage points. The difference is a further widening from last year’s 4.6% point margin. This loss in Japanese market share has been wholly absorbed as a gain by Korean manufacturers. The situation is not favorable to China either, which also saw its market share fall to 20.1% last year from 23.1% in 2008.

Samsung SDI estimates that it produced 75.5 million cells in the first quarter of this year. Panasonic is estimated to have produced 61.7 million cells, LG Chem 53 million, and Sony 29.8 million. Panasonic will still exceed LG Chem in the second quarter with the former producing 66 million cells while the latter 64.5 million. However, IIT forecast that LG Chem will overtake Panasonic and take over second place in the third quarter with LG Chem likely to produce 85 million cells while Panasonic produces 76.5 million. LG Chem is expected to be the major beneficiary of Panasonic’s loss of clients, with companies such as Acer, Lenovo and Toshiba predicted to transition to LG Chem. Market watchers say that Panasonic may even lose the mobile giant Nokia.
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