Battery supply chain: Semcorp set to open 1st factory beyond China

China’s Semcorp, one of the world’s leading supplier of a key component in electric vehicle batteries, is poised to start production overseas with a goal of raising its global market share to 50% by 2025.

The factory in Hungary is near completion and slated to start operations within the year, Semcorp said. The company, formally known as Yunnan Energy New Material, has invested about 340 million euros ($365 million) in the facility.

We have dispatched about 100 employees from China to the Hungary factory,” Semcorp spokesperson Chen Kaiya told Nikkei. “We are also hiring locally and working to build a team.

The move shows how Chinese suppliers of battery materials are trying to compete for customers beyond their vast home market.

In lithium-ion batteries, sheets called separators prevent the electrodes from shorting, which causes overheating. Semcorp surpassed Japan’s Asahi Kasei in 2018 for the top spot in the global separator market, with a 37% share in 2022, Tokyo-based Techno Systems Research estimates.

Semcorp’s separator production capacity totaled 7 billion square meters at the end of 2022. The company recently opened a second plant in the city of Suzhou in coastal Jiangsu province and plans more Chinese factories. It aims to reach 16 billion sq. meters, more than double its current capacity, in 2025.

Revenue for 2022 grew 58% to 12.5 billion yuan ($1.78 billion), while net profit rose 47% to 4 billion yuan. This marked a sixth straight year of top and bottom line growth for the company, which listed on the Shenzhen Stock Exchange in 2016.

Semcorp has kept pace with the rapid growth of Chinese car battery makers such as Contemporary Amperex Technology (CATL) and BYD, which collectively hold about 60% of the global market.

Asahi Kasei, fellow Japanese player Toray Industries and South Korea’s SK IE Technology are Semcorp’s main competitors. The Chinese company has stayed ahead by driving down production costs with ever-increasing economies of scale.

Compared to Japanese and South Korean rivals, separators from Chinese companies are about half the price,” said Mitsutaka Fujita of Techno Systems Research.

Semcorp has major Japanese and South Korean customers such as Panasonic Holdings and Samsung Electronics. But less than 30% of its shipments by volume go to overseas factories and companies. Because this figure includes Chinese-owned buyers, sales to foreign customers are even smaller.

 

 

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