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As Samsung moves on from Note 7 crisis, SDI battery associate struggles



Employees
travel past a building of Samsung Electronics in
Seoul

Thomson
Reuters


By Hyunjoo Jin and Se Young Lee

SEOUL (Reuters) – In a shadows of Samsung Electronics’ Note 7
smartphone crisis, associate Samsung SDI is sensitively reassuring
concerned clients including Apple Inc that a batteries are safe.

But intensity new business might infer harder to remonstrate as
Samsung’s biggest in-house tools retailer grapples with the
reputational fallout from a Note 7 debacle.

Created as a corner try with Japan’s NEC to make opening tubes
in 1970, Samsung SDI’s TV and smartphone screens and batteries
were pivotal to Samsung Electronics’ fast growth.

But it now faces a worse plea than a biggest customer
and shareholder as it looks to supplement new business and extend into
electric car batteries and renewable appetite storage systems.

Samsung Electronics, a world’s biggest builder of smartphones,
was discerning to censure a battery for causing some Note 7 inclination to
locate fire. It has given widened a review into a exact
means of a fires in a near-900,000 won ($780) phones after
deputy phones regulating batteries from China’s Amperex
Technology also held fire. But for Samsung SDI a repairs was
already done, analysts said.

SDI, a categorical retailer of Note 7 batteries, has mislaid around a
fifth of a marketplace value given a problem initial emerged, and
a third-quarter handling detriment was some-more than double that of a
year earlier.

Shares of Samsung Electronics, however, are tiny altered over
a same period, and a Reuters/Ipsos opinion check on Sunday
showed a Note 7 remember has had tiny impact on a willingness
of users in a United States to buy a company’s phones.

“Since a initial recall, we’ve had many inquiries from our
clients, including Apple, seeking either batteries used in their
products are safe,” pronounced a chairman during SDI who was concerned in
building a Note 7 battery.

“We are also seeking ourselves either we should have finished it (the
Note 7 battery) this way, or either there could have been other
ways,” a chairman said, disappearing to be named as he was not
certified to pronounce to a media.

LASTING IMPACT?

SDI has pronounced a battery emanate was singular to a Note 7, and it
has carried out trustworthiness checks on products with major
business and found no problems. It has set adult teams to improve
product safety, and authorised business to check batteries, which,
it says, meant proxy conveyance delays for a integrate of
customers.

“We put a pinnacle priority on battery reliability, and will use
this event to serve raise patron trust,” Kim
Hong-gyeong, SDI’s arch financial officer, pronounced on a conference
call with analysts.

Some analysts contend a impact could be durability for SDI.

“This will have some-more of an impact on new business than on
existent customers,” pronounced S.R. Kwon, during Dongbu Securities. “SDI
can assure existent business … though this could be a minus
means for SDI when it tries to attract new customers.”

“The influenced (Note 7) battery is totally opposite to the
product we use so a emanate doesn’t unequivocally impact us,” pronounced an
central during one of SDI’s automotive customers. “But we’re not
happy,” a chairman added, disappearing to contend either that may
change a attribute with SDI.

SDI, that has around a 25 percent marketplace share in tiny device
batteries according to marketplace investigate organisation B3, is already
battling a negligence smartphone market, and a diversification
pull hasn’t been helped by a disaster to win Chinese certification
for subsidies on a electric car batteries in a world’s
biggest autos market.

CLOSE TIES

Close ties to Samsung Electronics have helped SDI build scale and
reputation, and secure orders from a likes of Apple. Close to a
third of a income in a initial half year came from other
Samsung companies.

For Samsung Electronics, carrying in-house suppliers helped it beat
rivals to cutting-edge technologies – from winding screens to
faster chips and higher-density batteries.

But a Note 7 predicament has lifted doubts about either that
in-house supply sequence can hoop a flourishing strains on capacity
as Samsung Electronics transitions from fast-follower to
trend-setter.

Calling a Note 7 problem “very embarrassing,” a second person
during SDI said: “It’s a matter of a capability … We suspicion we
had control (over all aspects of manufacturing), though it turned
out there were some aspects we weren’t means to govern.”

SDI had to incorporate new materials and record to meet
Samsung’s ask for bigger battery ability for a Note 7,
that increasing by a sixth from a prior model, a SDI
insiders told Reuters.

“We focused on boosting battery capacity, though this could have
been difficult to reliability,” pronounced a operative who
worked on a Note 7 battery.

Samsung Electronics pronounced a concentration is on looking during all
possibilities to find a base means of a Note 7 problem.

(Reporting by Hyunjoo Jin and Se Young Lee; Editing by Miyoung
Kim and Ian Geoghegan)

Read a strange essay on Reuters. Copyright 2016. Follow Reuters on Twitter.

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