South Korea Becomes Top Lithium-Ion Battery Producer

---

Researched by Industrial Info Resources East Asia (Kofu-shi, Japan)--Due to Japanese production slips during the second quarter this year, South Korea has become the top producer in the global lithium-ion battery market. Although Japan's industrial manufacturing sector, as well as related metals and minerals and chemical processing plants, are on the mend, price-competitive South Korea is likely to hold the top position unless new, low-cost batteries are produced by Japan. Several firms, including Toshiba Corporation (TYO:6502) (Tokyo) and Hitachi Limited (NYSE:HIT) (Tokyo), are investing in research and development to help reclaim Japan's position. Other companies, like JX Nippon Oil and Energy Corporation (TYO:5001), are planning to begin production of battery materials in order to join the lucrative market.

Together, Japan and South Korea make up approximately 75% of the global lithium-ion battery market, although two of the three top producers, Samsung SDI Company Limited (SEO:006400) (Seoul) and LG Chem Limited (SEO:051910) (Seoul), are in South Korea. Last year, battery prices dropped as surplus swelled, though battery sales are expected to surge on the upswing in production of hybrid electric vehicles (HEVs) and electric vehicles (EVs). South Korean manufacturers are able to deal with lithium-ion battery price drops since most imported materials come from China, while the over-appreciated yen is hurting Japan's industrial sector.

Industrial Info is tracking more than $400 million in battery material projects scheduled to start between now and the end of 2012 in Japan. Numbers for South Korea are not as high due to the fact that South Korea focuses primarily on the assembly of batteries, rather than on the in-house production of battery materials. As HEV and EV production increase, the oversupply of batteries will begin to dwindle and prices may begin to rise, prompting an increase in capacity not only for materials, but also for assembly.

The electrical energy sector will also serve as a driver for lithium-ion batteries in the near future. South Korea had taken multibillion-dollar steps toward boosting its green energy capacity, and lithium-ion batteries can be used for electrical storage to be used during off-peak times. Wind and solar are two areas where electrical storage will be crucial to maintaining viability. Japan will see a surge in wind and solar power as the country's first feed-in tariff scheme takes off next year, prompting the need to boost battery production as well.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.