SAN FRANCISCO (Reuters) - Samsung SDI, the battery maker, is believed to be responsible for the Samsung Galaxy Note 7 cell phone explosion, according to The Wall Street Journal. However, Samsung SDI's current situation is not as bad as people think.
Samsung SDI is a subsidiary of Samsung, most of the Galaxy Note 7 battery is provided by the company. Samsung SDI's share price has fallen 21% since the first time in August of this year's Note 7 cell phone fire. During this time, Samsung's share price was flat, although the battery accident Samsung suffered a huge loss.
Samsung believes that the battery problem is the cause of Note 7 explosion. However, the exact cause of Note 7 cell phone explosion is still inconclusive. This may also be caused by another component of Note 7, experts and analysts say. After Samsung replaced the batteries from another supplier, some people still reported overheating.
Samsung shares did not fall, because Samsung has a lot of cash and a strong line of business. To a certain extent, Samsung SDI also has these two advantages.
Samsung SDI has 1.4 trillion won ($ 1.25 billion) in net cash, or 22% of its market capitalization. Samsung SDI also owns about 15% of Samsung Display's other subsidiary, Samsung Display. As the market for OLED screen strong demand, monitor business in the past year to obtain a stable recovery. Samsung is far ahead of its competitors in this area, occupying almost all of the OLED small screen market. Analysts generally expect the next generation iPhone will use OLED screen, OLED market will be strong growth. Another demand for OLED displays may come from virtual reality devices.
Samsung Display is not listed, but according to Deutsche Bank estimates, Samsung SDI-owned Samsung Display shares of the market value of about 3.9 trillion won. Last quarter, SamsungSDI held Samsung Display shares for the company to bring about 110 billion won in profits.
Although Samsung SDI's battery business is still at a loss, but losses are narrowing. As the global market for electric vehicle battery demand growth, Samsung SDI electric car battery business prospects, even though the company did not get China's battery certification. In addition, Samsung SDI's energy storage systems business will grow. According to Tesla CEO Elon Musk (Elon Musk) in June of this year's tweet on Twitter, Samsung SDI may be the supplier of Tesla.
Can Samsung SDI get out of the doldrums after the battery business has been hit hard? People will wait and see.