Battery division swings to profit on ESS, BBU sales surge

US ESS orders top 60 GWh; LFP mass production begins

Q4 profit streak to continue; long-term supply deals targeted by year-end

Samsung SDI's Giheung campus. [Samsung SDI]
Samsung SDI's Giheung campus. [Samsung SDI]

Samsung SDI posted its highest quarterly operating profit in 12 quarters, driven by strong sales of energy storage systems as the global AI data center market expanded. Surging demand for ESS and battery backup units boosted earnings, and Samsung SDI said it plans to sustain profitability into the fourth quarter after securing more than 60 GWh in US ESS orders this year.

Samsung SDI reported consolidated third-quarter sales of 4.69 trillion won ($3.54 billion), operating profit of 407.8 billion won and net profit for the period of 342.2 billion won on Thursday. Sales jumped 52.6 percent from a year earlier, and operating profit swung from a loss in the same period last year. The result was roughly double the previous quarter's 203.8 billion won and the highest since the third quarter of 2023, when operating profit reached 496 billion won.

The operating profit figure includes 122.5 billion won in Advanced Manufacturing Production Credits under the US Inflation Reduction Act. Excluding that amount, operating profit stood at 285.3 billion won.

The battery division led the gains, with sales jumping 55.3 percent year-on-year to 4.41 trillion won and operating profit swinging to a gain at 361.9 billion won. On top of ESS and BBU, sales of cylindrical batteries for power tools and electric vehicles also expanded.

The electronic materials division recorded sales of 275.7 billion won and operating profit of 45.9 billion won, up 18.9 percent and 18.3 percent, respectively, from a year earlier. Sales of semiconductor patterning materials and display film materials for foldable smartphones increased.

Samsung SDI strengthened its local production and supply capabilities in the US ESS market, securing more than 60 GWh in orders this year. The company plans to prioritize its Synergy Cells factory in Indiana as a key ESS battery production hub and expand capacity there in stages.

The company is also accelerating its lithium iron phosphate battery business. This month, Samsung SDI began mass-producing high-capacity prismatic LFP cells at the StarPlus Energy factory in the United States. In Europe, it has secured an EV LFP battery project. The company also signed long-term supply agreements with major domestic materials suppliers for LFP cathode materials, positioning itself to meet demand for China-free supply chains in the US market.

Samsung SDI is also broadening its product lineup for AI data centers. It recently unveiled a cylindrical LFP cell for BBU applications. On the next-generation front, the company shipped solid-state battery samples for humanoid robots and secured new customers for cylindrical batteries in the aerospace and humanoid robot sectors.

Samsung SDI expects ESS market growth to continue in the fourth quarter. It anticipates rising EV demand in Europe, while projecting a continued slowdown in the US EV market for now.

Against that backdrop, the company plans to accelerate the conversion of additional US battery lines to LFP production. It also aims to finalize long-term supply contracts for grid-scale ESS and uninterruptible power supply applications by year-end. Samsung SDI said it will actively participate in South Korea's third centralized ESS contract market tender.

For EV batteries, the company will proceed as planned with building out prismatic battery production lines and supply chains at its Hungary manufacturing hub. It intends to pursue new orders across a range of products, including high-nickel, LFP and mid-nickel chemistries. For small batteries, Samsung SDI plans to increase volumes with existing global cloud service providers and pursue new customers.

"We will continue to pursue mid- to long-term growth on the basis of profitability," a Samsung SDI official said. "We expect the solid growth momentum in ESS and small battery businesses to continue in the fourth quarter, sustaining our profitable trajectory."


eyre@heraldcorp.com