[Inside Chodong] The Bubble Will Burst Someday

Battery materials company Ecopro is making headlines day after day. Whether the stock price rises or falls, the market fluctuates with the movements of this 'emperor stock' exceeding 1 million won. The fact that POSCO, established in 1968, is being referred to as the 'second Ecopro' hints at its influence.

On the 27th, Ecopro's stock price is displayed on the Korea Exchange monitor in Yeouido, Seoul, where it has been fluctuating after plunging nearly 11% in early trading. Photo by Jinhyung Kang aymsdream@

As cars that used to run on gasoline or diesel are expected to mostly switch to electric vehicles in the near future, it is only natural that interest in batteries, the core of electric vehicles, is growing. Investors who have chosen Ecopro and Ecopro BM, which produce cathode materials, a key battery component, likely share this view.

POSCO Holdings and POSCO Future M, which have declared their transformation into secondary battery materials companies, have also seen their stock prices fluctuate sharply amid such expectations. LG Energy Solution, spun off from LG Chem in 2020 and listed on the stock market last January, has maintained the second-largest market capitalization on the KOSPI since then, reflecting similar optimism.

It is truly impressive that domestic companies are leading the rapidly growing global battery business. Production facility expansions overseas are being rapidly pursued, making it almost futile to keep the status updated. The so-called 'production capacity' is continuously increasing day by day. LG Energy Solution has secured orders worth 440 trillion won so far, making it difficult to even estimate the volume.

Watching everyone shout 'Gaja' (Let's go) while looking at battery-related companies reminded me of a factory I visited about ten years ago?the Woongjin Energy factory in Daejeon, which declared bankruptcy in July last year.

Yoon Seok-geum, Chairman of Woongjin Group, looking through a microscope at the Woongjin Energy factory

At that time, Woongjin Energy was the only domestic company producing ingots (cylindrical crystals made by melting polysilicon, sliced thinly to make wafer-shaped discs; these wafers become cells installed in solar panels) and wafers for solar cells.

In 2010, the Lee Myung-bak administration planned to invest 40 trillion won to become one of the top five renewable energy powers. They also envisioned fostering solar power as the second semiconductor industry. That year, Woongjin Energy successfully went public and became a leading solar stock alongside OCI.

A company official I met at the factory then cited technological prowess as the way to win against Chinese companies. The idea was that producing higher-quality products than cheap Chinese goods would give them a competitive edge. Woongjin Group even went as far as selling its core affiliate Woongjin Coway (now Coway) to focus on the solar business. However, after being outpaced by Chinese firms, Woongjin Energy eventually disappeared into history.

Interest in solar power was also intense at the time. OCI's stock price, which had hovered around 30,000 to 40,000 won per share until 2006, began to surge in 2007 on the back of a large-scale polysilicon supply contract, a key material for solar cells. On April 29, 2011, it surpassed 500,000 won, raising expectations that the 'era of 1 million won' was imminent. However, the price fell to the 200,000 won range the following year.

Although the battery industry seems destined for a bright future, there is a reason to take a step back and view the current situation objectively. Chinese battery companies are rapidly growing based on government support and a domestic market of 1.4 billion people, and their technological level is closely following our companies. If we become complacent, we could be pushed out in an instant, as happened with solar power.

Financial burdens from raising investment funds due to large-scale facility investments are also increasing. Companies are now facing a time of reflection to avoid repeating the 'failure of solar power.'

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