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Reuters say Main Battery Supplier for Samsung's Galaxy Note 7 would be China’s ATL


09/13/2016


Reuters say Main Battery Supplier for Samsung's Galaxy Note 7 would be China’s ATL
The main supplier of batteries for Samsung Electronics Co Ltd's Galaxy Note 7 phones would be China's Amperex Technology Limited (ATL), reported Reuters quoting a person with knowledge of the plans.
 
After Samsung told customers to switch off and return their new Galaxy Note 7 smartphones due to fire-prone batteries, its shares fell to their lowest level in nearly two months on Monday.
 
According to analyst estimates, supplying around 70 percent of the batteries globally, Samsung's own SDI subsidiary had been the dominant battery supplier for the Note 7. With a focus especially in China, ATL had supplied around a third.
 
After the smartphone giant instigated the global recall, ATL had received additional orders for Note 7 batteries, says Reuters quoting the source. Samsung launched its latest premium phone, which features an extra-large screen and high-resolution camera, just two weeks ago and has had to recall the phones form the market. The recall flowed alleged reports about  the 988,900 won ($885) phone igniting while charging.
 
At least for the time being, ATL was likely to take over battery supply for the mode, the source reportedly told Reuters.
 
He could not comment on a specific client due to business confidentiality agreements, ATL's chief operating office Joe Kit Chu Lam told Reuters by phone. However, the firm had received a "significant increase" in business this month, he added.
 
"We expect the situation to last for the coming one to two quarters. This will not bring any capacity issue," he said. Apple, which unveiled its rival new iPhone 7 last week, is also a client of ATL.
 
Samsung declined to comment. Japanese electronics firm TDK Corp, the owner of ATL, also declined to comment.
 
ATL would increase shipments of batteries to Samsung, the official China Daily newspaper reported earlier on Tuesday. Samsung would now only use batteries provided by ATL for the Galaxy Note 7, South Korea's Yonhap news agency said on Sunday.
 
Samsung had kept China exempt from the recall which happened earlier this month as it said the model was equipped with batteries from a different supplier. The company has however recalled the Note 7 from 10 markets, including South Korea and the United States.
 
Even though this was likely only to be a short-term solution, analysts said the supplier shift would likely mean ATL would be temporarily the sole supplier for the Note 7. "This could mean ATL would make all the batteries on Note 7s to be sold this year – which I expect to be 12 million maximum now. But I believe this is a temporary arrangement and will not affect SDI's position as the dominant battery supplier for Samsung," said SK Kim, a Seoul-based analyst with Daiwa Capital Markets.
 
In the meantime, in a step towards formalizing his role as head of the conglomerate as it reels from a massive smartphone recall, the Samsung Group's de facto leader and heir apparent is poised to join the board of crown jewel Samsung Electronics Co Ltd.
 
The world's top smartphone maker’s board nominated 48-year-old Jay Y. Lee as a director, the company announced on Monday. Since his father and group patriarch Lee Kun-hee was hospitalized after a May 2014 heart attack, he has been the group's key decision-maker.
 
"To allow him to take a more active role in the company's strategic decision-making", this was the right time to put him on the board, Samsung said.
 
(Source:www.reuters.com) 


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