Samsung SDI is strong in batteries, not so influential in the fuel cell business, and this is the direction it will continue to grow.
On Tuesday the affiliate of Samsung Group said it would sell off patents and machinery associated with fuel cells while it invests $2.6 billion (3 trillion won) to become the world’s premier EV supplier by 2020.
“Samsung SDI decided to drop fuel cell-related business projects, as the outlook of the market isn’t good,” said a a company spokesman by telephone to the Korea Times.
While the news is being interpreted as a potential first domino of failure for hydrogen fuel cell vehicles, the Korea Herald does not report Samsung was heavily in that business.
Rather, in 2005, it developed methanol-based fuel cells for computer notebooks that never sold well, and it is quitting in an effort to increase profitability.
The move follows a shedding of other unprofitable business lines including plasma TVs, and its chemical business.
Samsung SDI is reportedly negotiating with Kolon Industries over sale of its fuel cell production-related equipment for “a few million dollars,” and its patents may also be snapped up by this company.
“Kolon Industries has a strong interest in buying SDI-owned fuel cell patents,” said a Samsung official to the Korea Times. “The money that will be saved from the sale of the fuel cell business will be used to boost energy solution-related businesses such as batteries for electric vehicles (EVs) and energy storage systems.”
Workers for the fuel cell side of Samsung SDI’s business have already moved to other departments, and the company will focus on its strengths for electric vehicles.
“We should burn fat in our tissues and bulk up muscles to win from heated competition with our chief rivals,” said CEO Cho Nam-seong in a New Year message to employees.
Over the next five years investments in electrified vehicle and EV-related parts business could make it the top supplier in the world, says the company, and that’s the plan.