Samsung SDI aims to return to profitability in the fourth quarter of this year. The company plans to catch up with industry leaders in the lithium iron phosphate (LFP) battery market, which is gaining traction in compact and affordable electric vehicles (EVs), as mass production ramps up in the U.S. and Europe around 2028.
During a Q2 earnings call on Thursday, Kim Jong-Sung, Executive Vice President of Samsung SDI’s Management Support Office, stated that it anticipates a return to profitability in Q4, driven by improving sales in our small battery and electronic materials divisions.
The company reported an operating loss of 397.8 billion KRW (about 283.9 million USD) in Q2, marking its third consecutive quarter in the red. However, it aims to break this losing streak in Q4. Kim explained that H1 performance was hampered by significant policy shifts, including amendments to the U.S. Inflation Reduction Act (IRA) and new tariffs, which led to reduced demand and lower capacity utilization, resulting in higher fixed costs.
Kim expressed optimism for the second half of the year, projecting narrower losses in the medium and large battery segment due to increased sales to major European EV manufacturers, compensation for Q2 EV battery supply delays, and steady demand for energy storage systems (ESS).
He added that small battery sales are expected to see substantial growth, particularly in the EV sector, as well as in power tools and micro-mobility applications. Further adding that the electronic materials division is also poised for revenue and profit growth compared to first half of the year, buoyed by strong demand for organic light-emitting diode (OLED) and semiconductor process materials.
However, Kim cautioned that upcoming U.S. reciprocal tariffs (15%) and the phaseout of IRA EV subsidies in September could introduce volatility. He emphasized the company’s commitment to closely monitoring market conditions and collaborating with customers to mitigate potential impacts.
Samsung SDI also expressed confidence in its entry into the emerging LFP battery market. Kim Soo-Han, Executive Director of the medium and large battery sales team, stated that it is targeting the volume and entry-level EV markets with its prismatic LFP batteries. Further adding that by 2028, when mass production begins in Europe and the U.S., it expects to be on par with industry leaders in terms of competitiveness.
Kim noted that as the EV market expands rapidly, so do the volume and entry-level segments. He added that original equipment manufacturers (OEMs) are demanding higher safety standards, particularly in battery thermal management. He emphasized that its proprietary thermal propagation barrier technology, developed for high-performance premium applications, has become a key differentiator in recent contract negotiations for volume and entry-level markets.