Samsung SDI Co Ltd Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Hyun-Soo Kim - Hana Financial Investment Co., Ltd., Research Division - Analyst : (foreign language) [Interpreted] My first question is about EV battery business. I'm just wondering what is the EV battery market growth rate that is assumed in SDI's EV battery business strategy? So what is the size of the total market that is assumed in your EV battery business? And how much of that potential market does the company target to gain? So what is your target market share in that given market? Second question is about your electronic materials business, the new businesses that are being prepared. I've heard that the company is working on, for example, photoresist for semiconductors as well as new materials for QD display. But in addition to this, can you share with us a bit more detail of the new materials businesses that the company has in its pipeline regarding either semiconductors and OLED? Can you give us some update on the development front? Unidentified Company Representative (foreign language) [Interpreted] The EV battery market is being driven by several factors, including the longer ecofriendly regulations being adopted by various countries, the ban on the sales of ICE vehicles approaching and also the acceleration of EV strategy is being adopted by the global automotive OEMs. These are all driving rapid growth of the EV market. The EV battery market is expected to grow by more than 30% CAGR on a capacity basis and exceed 1 terawatt hour by 2025. Our focus will be on diversifying our customer base, which is currently more European focused and also launching next-generation batteries to follow the Gen5 to offer higher energy density and rapid charging performance with the goal of maintaining our leadership in the rapidly growing EV battery market. Unidentified Company Representative (foreign language) [Interpreted] Regarding an update on our new material businesses, some of the new items that are in our pipeline to be launched in the market in the next 1- to 2-year time frame would include the [QD Inc.] polarizer film for OLED as well as G-Hosts for new platforms. The photoresist for semiconductors that you mentioned is still in its initial development phase and would take longer until commercialization. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 27, 2021 / 4:30AM, 006400.KS - Q2 2021 Samsung SDI Co Ltd Earnings Call We also have many new items in the development that we're developing in collaboration with customers, including EUV materials for semiconductors as well as new materials for OLED. We plan to develop new materials to diversify our product portfolio and create the foundation for mid- to long-term growth of our electronic materials business.

Question: Daniel Kim - Macquarie Research - Analyst : (foreign language) [Interpreted] I'll ask 2 questions. The first question is about ESS market, which is expected to grow as strong as the EV battery market. In that context, can you share your -- the company's outlook for ESS market growth? What kind of competitive landscape the company is expecting? And how the company plans to gain a competitive edge within the ESS market? Second question is about the 4680 cell that Tesla seems to be at the end of its development. It seems to be completing its development of the 4680. Can you give us an update on where SDI stands in terms of 4680 development? Unidentified Company Representative (foreign language) [Interpreted] To answer your first question about ESS growth outlook and our strategy. The ESS market is expected to grow by more than 25% CAGR to over 100-gigawatt hours by year 2026 driven by main factors such as stronger environment policies being introduced by each country, the greater penetration of renewable energy generation that is becoming more economical than, for example, coal or gas-based generation. The utility or power or Genco market, which is the largest segment within ESS is expected to record rapid growth with increased renewable energy generation combined with infrastructure investments and tax benefits. The utility market is expected to grow by more than 30% CAGR from