April 16, 2024

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[THE INVESTOR] Samsung Electronics plans to use Samsung SDI batteries for the upcoming Galaxy S8 smartphone after the Korean tech giant tentatively concluded that the batteries were not the key cause of Note 7 explosions.

“Samsung SDI has recently renewed its contract with Samsung Electronics to supply batteries for high-end smartphones this year, including the Galaxy S8,” an industry source said on Jan. 4 on condition of anonymity. 

Samsung, which is set to announce the results of the internal probe into the fire-prone Note phone soon, has allegedly concluded that several factors such as design that packed thousands of components into the slimmer device and some software flaws led to the explosion of some Note phones.

The final results are expected to be unveiled this month, sources said.

After the first reports of the Note phone catching fire and exploding in September last year, Samsung blamed the faulty batteries made by its sister firm Samsung SDI, replacing them with those produced by Chinese battery firm ATL.

But the replacement phones with ATL batteries also caught fire and the company announced the unprecedented withdrawal of the flagship phone from the market in October. About 2 million Note phones were sold globally.

Amid rumors that Samsung could ditch Samsung SDI batteries for its upcoming phones, the battery maker has beefed up safety tests and quality control procedures. SDI supplies more than 65 percent of the batteries for Samsung's smartphones every year.

In a bid to diversify battery suppliers for the Galaxy S8, Samsung has tapped LG Chem, the battery-making unit of LG Group, and Japan’s TDK. If Samsung inks a supply deal with LG, it would become the first of its kind between the two firms that compete in almost every sector, including electronics and components.

By Kim Young-won (wone0102@heraldcorp.com)