South Korean battery maker Samsung SDI posted lower revenue for the first quarter of the year but expects demand to recover in the second quarter, although ongoing tariff wars are creating greater uncertainty.
Samsung SDI's revenue in January-March dipped by 15pc against a quarter earlier and by 34pc against a year earlier to around 3.17 trillion Korean won ($2.2bn). Operating losses further widened to W434bn, worsening from W257bn of losses a quarter earlier and W249bn of profit a year earlier, it said in its latest quarterly results released on 25 April.
But the firm expects battery market demand to gradually recover in April-June. The firm expects electric vehicle (EV) demand from the EU to recover because of falling inventories at original equipment manufacturers that it attributed to the EU's CO2 regulation and EV-friendly policies.
Demand for energy storage systems (ESS) is also expected to rise because of greater demand from the power sector resulting from the expansion of renewable energy and artificial intelligence data centres.
But political uncertainties could jeopardise demand because of escalating uncertainty resulting from the ongoing tariff wars, said the firm.
The firm sees "limited" direct impact from the US tariffs on its US EV battery business but given many battery components are being imported, this could lead to higher vehicle prices and weaken EV demand. The firm acknowledged that the US tariff will pose a problem to its ESS business as a significant portion of its ESS batteries being sold in the US are manufactured abroad and imported, but it will "respond appropriately," it said without providing more details.
The firm defended its plan to further expand its Hungary battery plant when questioned by analysts during its earnings briefing. The expansion will focus on raising the current production capacity of its prismatic high-nickel battery and adding new production line for lithium-iron-phosphate as well as its 46-series battery, it said. The expansion will help Samsung SDI to meet market demand starting from 2027 or 2028, it added. The firm last month disclosed its plan to raise W2 trillion to partly fund its Hungary plant expansion.
