Outlook Looks Good... But 2nd Battery Stocks Struggle to Escape Slump

Secondary Battery Stocks Underperforming KOSPI Returns
Vehicle Semiconductor Supply Shortage Still Holding Back

[Asia Economy Reporter Minwoo Lee] According to the Korea Exchange on the 26th, the stock price of LG Chem, a completed secondary battery manufacturer, fell 4.9% based on the closing price from the 16th to the previous day. At 9:34 a.m. on the same day, it recorded 732,000 won, down 0.95% from the previous day. Compared to the beginning of the month, it dropped nearly 12%, pushing it out of the top 5 in market capitalization. Samsung SDI is in a similar situation. It has fallen 5.9% since the 16th due to continuous declines. This is ten times the 0.6% drop in the KOSPI during the same period.

Secondary battery material companies also seem to be somewhat hesitant. EcoPro BM, a secondary battery cathode material manufacturer that rose to the top of the KOSDAQ market capitalization this year, also fell about 4.4% from the 16th to the previous day. SK IE Technology, a specialist in secondary battery separators, also dropped 7.4% during the same period.

While profit-taking selling has emerged due to the previous upward trend, the persistent shortage of automotive semiconductors appears to have pulled down stock prices. Production disruptions at automakers could slow the growth pace of the secondary battery industry. Researcher Kwangjin Kim of Yuanta Securities explained, "The scale of production disruptions at automakers due to the semiconductor shortage this year is about 10.15 million units, and the industry expects the supply shortage to continue until 2023 if delayed. However, a gradual improvement trend is expected to appear from the fourth quarter of this year."

Another negative factor is that Chinese companies' LFP (Lithium Iron Phosphate) batteries threaten the domestic companies' main product, ternary batteries. This is because LFP batteries are cheaper, and Tesla in the U.S. has decided to equip LFP batteries in its global entry-level models. Apple is also expected to apply LFP batteries to electric vehicles in the future, increasing investors' concerns. However, since LFP still has clear limitations before surpassing ternary batteries to become the 'mainstream,' some view the concerns as excessive. Researcher Kim explained, "LFP has limitations for use in mid-to-high grade electric vehicles due to its low energy density and low voltage. The increase in LFP battery usage this year is mostly within China, and the global market still prefers ternary batteries."

This content was produced with the assistance of AI translation services.