04 SAMSUNG SDI SUSTAINABILITY REPORT 2023
SUSTAINABILITY MANAGEMENT
SUSTAINABILITY MAIN THEMES
APPENDIX
OVERVIEW
CEO's Message
Company Overview
2030 Company Vision
Business Overview
OVERVIEW
CEO's Message Company Overview 2030 Company Vision Business Overview
05 06 07 08
06 SAMSUNG SDI SUSTAINABILITY REPORT 2023
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SUSTAINABILITY MAIN THEMES
APPENDIX
OVERVIEW
CEO's Message
2030 Company Vision
Business Overview
Company Overview
CO ov me r pv ai enwy Samsung SDI at a Glance Since its foundation back in 1970, Samsung SDI produces and sells re- chargeable batteries used for electric vehicle, IT device, and Energy Storage System (ESS) applications as well as materials for semiconductors and displays. We commit to securing su- per-gap technology through trans- formation and innovation to shape a sustainable, eco-friendly future society. Cnaommepany Samsung SDI Co., Ltd CEO Yoonho Choi Establishment January 1970 Headquarters 150-20, Gongse-ro,
Global Network Samsung SDI’s global network consists of 31 locations in total, including the Headquarters, the R&D Center, production facili- ties and sales bases. Headquarters 1 Production Subsidiaries 12 Sales Subsidiaries/Offices 13 R&D center 5 As of April 2023 31 locations in total
Germany
Munich Dresden Braunschweig
Korea
China
Giheung Cheongju Gumi
Cheonan Ulsan Suwon
Tianjin Xi’an Wuxi
Shanghai Beijing Shenzhen Hongkong
USA
United Kingdom Manchester
Auburn Hills, MI Kokomo, IN San Jose, CA Boston, MA
Japan
Tokyo
Hungary Goed Austria
Taiwan Taipei
Premstaetten
India
Vietnam Hanoi Malaysia
Noida
Seremban
(Based on 2022 consolidated financial statements, unit: KRW 100 million) Financial Performance
External Assessments Made on Samsung SDI
1)
2)
3)
■ Europe ■ North America ■ Southeast Asia ■ China ■ Korea
■ Sales ■ Operating income ■ Net income
Giheung-gu, Yongin City, Gyeonggi Province, Korea
Toof st ahlaNr eos. o( cuotms t amnodni n g shares)
Listed on the DJSI World for the 18 th time in 2022
Received A in ESG rating in 2023 for 4 consecutive years
2022 Climate Change Score: A-
201,241
지역별 매출 비율 15 % 6 % 24 % 13 % Sales Breakdown by Region
68,764,530 shares
42 %
1) Supervised by MSCI (Morgan Stanley Capital International) 2) Supervised by S&P Dow Jones and RobecoSAM 3) Supervised by the CDP (Carbon Disclosure Project) 4), 5) Supervised by Corporate Knights
Total workers 30,716 Swhi tahr e5h%o lodre r s
4)
5)
Ranked 63 rd in 2023, listed for 6 consecutive years Ranked 38 th in 2023, listed for 5 consecutive years GLOBAL100 CLEAN200
Samsung Electronics: 13,462,673 shares (19.58%) National Pension Service: 5,449,458 shares (7.92%) BlacKRock Fund Advisors: 3,444,030 shares (5.01%)
mowonreership ( 3 a 1 s , o 20 f D22 e , c. cs ho amr ems )o n
20,394 18,080
07 SAMSUNG SDI SUSTAINABILITY REPORT 2023
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SUSTAINABILITY MAIN THEMES
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OVERVIEW
CEO's Message
Company Overview
Business Overview
2030 Company Vision
2C0o3m0pany Vision
Samsung SDI established a new 2030 vision to evolve into a global top-tier company by 2030. Everyone at Samsung SDI move towards the vision of ‘To make the world greener and sustainable through our innovative technology’
TO MAKE THE WORLD GREENER AND SUSTAINABLE THROUGH OUR INNOVATIVE TECHNOLOGY
Vision Statement
EMl eact terroi anlisc
Battery
Business Goal
2030 Global Top Tier Battery Company
Global Top Materials Specialist
SUSTAINABILITY LEADERSHIP Bolster ESG management and seek win-win partnerships
OPERATIONAL COMPETENCY Strengthen global operational competency and create a premier corporate culture
TECHNOLOGY INNOVATION Secure super-gap technology and differentiated products
PROFITABLE GROWTH Pursue profitable qualitative growth
Mission & Strategy
08 SAMSUNG SDI SUSTAINABILITY REPORT 2023 BOuv seirnvei es ws
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SUSTAINABILITY MAIN THEMES
APPENDIX
OVERVIEW
CEO's Message
Company Overview
2030 Company Vision
Business Overview
Automotive Battery Business Summary
Market Outlook In 2022, the sustained pandemic, supply chain disruptions caused by the Russo-Ukraine war, and inflationary pressure stalled the growth of the overall automotive market. Still yet, xEV sales continued to increase to surpass 10% of total automotive sales. In Europe, tightening carbon emissions regulations drive the continuous growth of the xEV market while the IRA (Inflation Reduction Act) of the US is expected to spur the nation’s xEV mar- ket. In China, it is forecast that new energy vehicles will make up 30% of new vehicles in 2023. Global EV makers plan to launch a range of new EV models in line with the initiatives undertaken by key countries to phase out internal combustion engines. Naturally, the xEV market will maintain its growth momentum, with annual xEV sales exceeding 46 million by 2028 to account for nearly 46% of the total automobile market.
As the sales of xEVs continued to grow rapidly to account for over 10% of global automo- tive sales in 2022, Samsung SDI is leading the charge in the transition to xEVs by develop- ing innovative battery technology. We secure super-gap technology competitiveness and differentiate products to position ourselves as an xEV battery leader, and supply high-ef- ficiency, high-capacity Li-ion batteries to global automotive OEMs to help minimize the environmental impact of internal combustion engine vehicles. Application
Electric Vehicle (EV) We deploy materials that deliver optimal service life and high-capacity fea- tures and design optimized battery components to pursue innovation in extending the driving range of EVs. Plug-in Hybrid Electric Vehicle (PHEV) As it is essential to strike the right balance between energy density required for electric-mode driving and power density that supports the engine oper- ation, we are in constant search for the optimal point of balance by staying ahead of the competition in developing battery technology.
EV
Global xEV Battery Demand Outlook 1) xEV battery demand outlook (GWh)
PHEV
3,664
3,158
2,633
2,097
1,520
1,004
2023E
2024E
2025E
2026E
2027E
2028E
1) EV and PHEV combined * Source: Samsung SDI forecast (as of May 2023)
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OVERVIEW
CEO's Message
Company Overview
2030 Company Vision
Business Overview
ESS Energy Storage System Business Summary
Market Outlook Countries around the world are increasing investments in green infrastructure to stimu- late the economy slowing down amid the continued pandemic, and the Russo-Ukraine war heightened interest in energy security to accelerate the global transition to renewable energy. This resulted in sustained demand growth in ESS installations that are essential for energy supply/demand management, and the global LiB ESS market is expected to achieve a CAGR of 15%, expanding from 103 GWh in 2023 to 210 GWh in 2028. Notably, sizable market growth is expected in the US, China and Europe where large-scale, govern- ment-led green policy initiatives are being undertaken. The US signed the IRA into law to significantly increase investment support for ESS projects, and China set a national goal for ESS installation and is raising the proportion of renewable energy generation. Europe is also formulating its own plan to support renewable energy through the Green Deal Industrial Plan. Meanwhile, Korea and Taiwan are planning for government-driven initia- tives to distribute utility ESSs, and these emerging markets are also expected to boost in line with expanding datacenter construction and the resulting growth in UPS demand.
Samsung SDI applies our technology and manufacturing process tested and proven in our EV battery business to ESS battery to secure high market shares and deliver reliable product quality. This ensures that we leverage our best-in-industry battery design compe- tency and standardized modules to create a diverse product portfolio across the utility, commercial & industrial, residential, UPS and telecom sectors and deliver end-to-end ESS solutions that cater to varying customer needs. Application Utility We contribute to ensuring the stability of power grids in the power supply system spanning from power generation to transmission and distribution, and to standardizing renewable energy power generation. Commercial & Industrial (C&I) We improve the stability of power operation and the availability of self-con- sumption by lowering day-time maximum loads in commercial buildings including office spaces, public institutions, schools and hospitals. Residential We ensure 24/7 supply of eco-friendly energy through alignment with photovoltaic(PV) power systems. This in turn increases residential energy self-consumption rates while reducing electric bills. UPS We help protect data centers from unexpected operational disruptions by ensuring reliable power quality and continuity while minimizing total power consumption and reducing facility investments. Telecom We deliver lifetime performance as well as reduced weight, smaller volume and higher energy density, and bring a dramatic reduction in maintenance expenses through the use of Li-ion batteries. Installation ㅣ Base stations, repeaters Installation ㅣ Solar/Wind generation plants, substations, etc. Installation ㅣ Buildings, factories, etc. Installation ㅣ Detached and row houses Installation ㅣ Factories, financial institutions, IT companies (servers), etc.
Global LiB-ESS Demand Outlook Total ESS demand outlook (GWh)
210
176
155
137
119
103
2023E
2024E
2025E
2026E
2027E
2028E
* Source: Samsung SDI forecast (as of May 2023)
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SUSTAINABILITY MANAGEMENT
SUSTAINABILITY MAIN THEMES
APPENDIX
OVERVIEW
CEO's Message
Company Overview
2030 Company Vision
Business Overview
Small-Sized Li-ion Battery Business Summary
Market Outlook As the lifting of COVID-19 lockdowns and the resulting global economic downturn add to uncertainties across the market, the small-sized Li-ion battery demand for 2023 is fore- cast to rise by 20% year-on-year to 16 billion cells 1) . While the 2022 growth was negative in the IT sector due to sluggish demand for the three primary devices of smartphones, laptops, and tablets, the total demand is set to grow continuously in line with 5G-enabled digital transformation progressing at full scale, the growth potential of IoT, metaverse, and other new market segments, and increases in demand for wireless earbuds and other wearables. In the power application market, we will witness lackluster demand for power tools that are driven by the US. Still, mobility electrification will accelerate with the policy support provided by governments worldwide. EV startups and car OEMs will boost their EV manufacturing, and demand for micro mobility including e-bikes and e-scooters will rise mainly in Europe, leading the growth of the cylindrical battery market.
Samsung SDI engages in the development and sales of small-sized Li-ion batteries that are categorized into cylindrical and pouch forms. These batteries are expanding their ap- plication into broader areas, powering such mobile devices as smartphones, laptops, and power tools in line with the growing market needs for portability, ranging from wearables and micro mobility. On the back of our quality-first management philosophy and stead- fast commitment to technology innovation, we maintain solid market dominance in the global small-sized Li-ion battery market. Application Small-sized Li-ion batteries are categorized into batteries that power the three major IT devices of mobile phones, laptops and tablets as well as wireless earbuds and to batteries that supply power to power tools, e-bikes, e-scooters, electric vehicle(EV)
Cylindrical Power tools, gardening tools, vacuum cleaners, e-bikes, e-scooters, electric vehicle(EV) Pouch Smartphones, tablets, wearables, wireless earbuds
Global Small-sized Li-ion Battery Demand Outlook
Small-sized Li-ion battery demand outlook (unit: million)
25,309
24,295
22,888
20,964
18,623
15,965
2023E
2024E
2025E
2026E
2027E
2028E
1) Based on demand in our 2023 business plan * Source: Samsung SDI forecast (as of May 2023)
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OVERVIEW
CEO's Message
Company Overview
2030 Company Vision
Business Overview
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2022 Business Highlight
All-Solid-State Battery
Automotive Battery
Energy Storage System
Small-Sized Li-ion Battery
Electronic Materials
Indiana, US
St. Joseph county(GM) Kokomo(STLA)
Completing an all-solid-state battery pilot line In March 2023, we completed a 6,500 ㎡-sized all-solid-state battery pilot line at the SDI R&D Center. This facili- ty dedicated to all-solid-state battery manufacturing will drive our efforts to secure manufacturing technology as well as producing industry-leading research outcomes for all-solid-state battery.
Further tapping into markets in the Americas Samsung SDI partnered with GM (Gen- eral Motors) to establish an EV battery joint venture in the US. With a goal of initiating mass-production in 2026, we will invest more than USD 3 bil- lion to build a plant with over 30GWh in annual capacity. Following our first joint venture formed with Stellantis, this partnership will create our second battery production facility in the US to further drive our efforts to tap into the US market.
Securing DC box solutions with best-in-class safety performance for the SBB
Expanding our cylindrical battery line in Malaysia
Leading the market with FOCA and initiating the development of inorganic photoresists We launched competitive products on the strength of our exceptional FOCA (Foldable Optical Clear Adhesive) tech- nology, leading the display materials market in 2022. We also initiated the development of inorganic photoresists (PR) noted for its potential for sizable growth in the next-generation semiconductor market, and are currently engaging in sample evaluation.
To cater to the recent growth in cylin- drical battery demand, Samsung SDI invested KRW 1.7 trillion in expanding our cylindrical battery line in Malaysia. The 2nd plant where our PRiMX cylin- drical battery will be manufactured broke ground in July 2022 and is set for completion in 2025.
Samsung SDI secured battery DC box solutions that satisfy the most rigorous safety criteria set out in today’s global standards. In so doing, we increased the installed battery capacity within the SBB (Samsung Battery Box), and integrated all devices required for op- eration to improve our competitive- ness from the TCO perspective.
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CEO's Message
Company Overview
2030 Company Vision
Business Overview
Battery R&D Activities All-Solid-State Battery
Patent Management Samsung SDI leverages patents to safeguard our technology and develop market-leading products and services while managing patent-related risks that may occur in business conduct. We proactively file and register our pat- ent applications on our proprietary technology across major countries in con- sideration of our markets and production locations, and prevent technology associated with trade secrets from being leaked by registering such technolo- gy as trade secret and managing them accordingly. We have remained steady with our patent registration efforts since the early days of business to estab- lish a wide-ranging patent portfolio covering the full spectrum of rechargeable battery and electronic materials, and have put our patents to work in bringing market-leading innovative products to market. As to next-generation tech- nology, not only do we develop our internal technology capabilities, but also partner with leading universities and research institutes in Korea and over- seas to secure patents in promising future technology areas. For exceptional external patents, we increase our freedom to operate either through patent licensing or patent acquisition. Meanwhile, we minimize patent risk through rigorous verification of competitor patents in the product development pro- cess. Our patent competitiveness gained as such ensures that we continue and expand stable business relationships with our customers and suppliers. As of the end of 2022, Samsung SDI’s pool of patents included 5,782 patents in Korea and 13,415 patents overseas. Patents Registered on a Cumulative Basis Country Unit 2020 2021 2022 Korea cases 5,070 5,231 5,782 US cases 4,022 3,976 4,107 China cases 2,038 2,042 2,326 Japan cases 1,410 1,336 1,435 Europe cases 4,113 4,410 4,743 Others cases 983 740 804 Total cases 17,636 17,735 19,197
Samsung SDI is developing all-solid-state batteries which deploy solid electrolytes in place of liquid ones normally used for conventional batteries with an aim to improve battery safety and energy density. With our success in designing and synthesizing solid electrolytes, we have led the way in technology development by manufacturing all-solid-state battery prototypes. We also developed anode-less all- solid-state battery technology with improved cycle life through the adoption of independently-config- ured solid electrolyte materials and lithium anodes to demonstrate best-in-industry energy density and performance. Our 6,500㎡-sized S-Line initiated its construction at the SDI R&D Center in March 2022 as our all-solid- state battery pilot line and completed in March 2023. This pilot line will enable us to start the production of small-sized sample cells and conduct performance, materials, parts, and process tests. We will secure the technology to manufacture larger cells and scale up our manufacturing towards the commercializa- tion of all-solid-state battery. Cobalt-free Battery Cobalt, a key raw material for battery production, is instrumental in ensuring battery safety and perfor- mance. Its high prices and geographical concentration, however, also gives rise to supply/demand risk. To mitigate such risk, we are exploring cobalt-less cathodes with reduced cobalt content or cobalt-free cathodes for our high-capacity battery production. Samsung SDI is developing NMX material which does not contain cobalt and still retains the strengths and basic properties of existing cathode materials to the fullest possible extent. Applying NMX that is eco-friendly and price-competitive while mitigating the risk of raw material supply/demand for battery mass-production will surely assist Samsung SDI in securing competitiveness in the EV and ESS battery markets. Battery Recycling The burgeoning EV market will naturally lead to increases in the generation of end-of-life batteries, which draws our attention to minimizing the resulting environmental impact. To expand resource rec- lamation through battery recycling, we opened the Recycling Research Lab exclusively responsible for researching ways to recycle end-of-life batteries within our R&D Center in May 2022. Work is on-going to increase the recovery of battery materials and reclaim eco-friendly materials, and the Lab will also engage in technology cooperation with partners and in industry-academia collaborations to develop new recycling technology. This, in turn, will help us continuously raise the proportion of recycling such core battery raw materials as cobalt, nickel, and lithium.
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SUSTAINABILITY MAIN THEMES
APPENDIX
OVERVIEW
CEO's Message
Company Overview
2030 Company Vision
Business Overview
Advancing the smart factory initiative Samsung SDI has consistently advanced the smart factory initiative to leverage auto- mation systems in boosting our manufacturing competitiveness by improving our pro- duction efficiency and product quality. The Manufacturing Execution System (MES) brings dramatic improvements for large, high-speed data processing. We developed the next-generation MES optimized for EV battery production, and have rolled out this system across our entire global operations starting with new locations in 2022. We also expanded factory logistics throughout the entire process ranging from the raw material warehouse to shopfloor and the finished goods warehouse and are advanc- ing ATS (Automated Transfer System) functionality to improve transfer efficiency. We ultimately aim for unmanned plant operations. With this goal in mind, we equipped all our locations with a system to monitor production operations in real time to au- tomatically control equipment so that worker-induced variation in the manufacturing
process does not affect product quality. Work is also underway to render our system functionality more intelligent to detect the operational status of equipment to predict their failure and take preventive maintenance measures. Going forward, Samsung SDI is implementing our intelligent smart factory strategy to improve the accuracy and speed of equipment control and quality analyses through AI-enabled big data analytics and to leverage digital twin technology for factory logistics forecasting and production optimiza- tion simulation throughout the entire lifecycle from raw materials to finished products. In line with the addition of new overseas locations to our global network, we provide immer- sive job training enabled by the application of VR/AR and work to establish a real-time re- mote collaboration system to help our shopfloor staff with capacity building. In so doing, we aim to establish smart factories optimized for battery production and continuously boost our manufacturing competitiveness in the process.
Domestic and overseas production facilities
Battery manufacturing plant
Development/Design
Facility
Quality
Plant logistics
Partners
Customers
Parts(materials)’ quality information
Production simulation
Logistics simulation
Parts(battery)’ quality information
Product simulation
Operation Optimization
Digital Twin (Virtual factory)
Development/Design
Facility
Quality
Plant logistics
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Manufacturing/Quality Information
Cusitnofmoremrsa’tdioensign
부품/소재 정보 Design/spec Information Parts/materials information
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