Battery maker Samsung SDI
, which has been pinpointed as the main culprit of the recent Galaxy Note 7 battery fiasco, saw its stock price drop 6.12 percent intraday to 96,200 won (US$86.58) on Sept. 12.
The stock closed at 96,500 won (-5.85%) on the day.
More than 30 fire and explosion cases involving tech giant Samsung Electronics
’ Galaxy Note 7 have been reported since the release of the smartphone on Aug. 19 in 10 nations including South Korea and the US.
As things started to get worse with a number of reports on the combustion and explosions cases around the world, Samsung announced a recall program of all the 2.5 million Note 7 units, including those already sold to consumers and shipped to sellers around the globe.
Samsung SDI’s faulty batteries fitted on the Note 7 has been pinpointed as the main culprit of the battery issue.
The battery firm had reportedly been in charge of 70 percent of supplies for the Note 7 while ATL of China was supposed to supply the rest.
Ditching the Samsung SDI battery, Samsung Electronics has reportedly decided to receive the entire battery volume from the Chinese firm.
The deficit is forecast to deal a blow to the Korean battery firm’s business for electric vehicle battery, facing a number of hurdles ahead.
Samsung SDI, along with its domestic rival LG Chem
, has been trying to pass the safety standards of the Chinese government for large-size batteries, such as those for electric vehicles.
It also lost its position as an exclusive battery supplier for German luxury sedan maker BMW’s i3 and i8 as the automobile firm recently inked a supply deal with LG Chem.
“The recall of the Note 7 would cost the SDI at least 40 billion won,” said Park Yeon-joo, an analyst from Mirea Asset Deawoo, adding that “the anticipated battery shipments for BMW will boost Samsung SDI’s earnings slightly, but the improvement will be limited as it is faced with the certification issue in China.”
By Kim Young-won (firstname.lastname@example.org