Semcorp, a leading Chinese battery separator manufacturer, has its eyes set on global expansion, overcoming hurdles to secure its foothold in the American and European market.
Hailing from China, Semcorp is a prominent battery supplier with grand ambitions. The company aims to boost its overseas client base, intending for it to represent half of their total clientele by 2025. To realize this goal, Semcorp has invested a significant US$365 million to construct a new factory in Hungary, Europe. The company anticipates this facility will be operational by the end of the year.
“We have dispatched about 100 employees from China to the Hungary factory,” stated a Semcorp spokesperson. The reassignment of a group of Chinese workers to Hungary lays a solid foundation as the company begins recruiting local workforce. This fresh team is anticipated to boost production capabilities.
In an era where EVs are seen as the future of transportation and lithium batteries are emerging as the new “oil”, countries are vying for dominance in the EV sector. China currently leads the charge, being the largest EV market and battery supplier. However, ift is working diligently to capitalize on opportunities to export its battery raw materials globally amid the emerging trend of EV localization.
▲A lithium battery separator is required to prevent the cathode and anode from short-circuiting and overheating.
Semcorp’s expertise lies in providing lithium battery separators—a high-functioning polymer featuring nanoscale micropores. These separators, situated between the anode and cathode, prevent short circuits in the electrolyte, which can cause overheating. Since 2018, Semcorp has surpassed Japan’s Asahi Kasei Corporation, securing its position as the world’s leading battery separator supplier. In 2022, Semcorp captured 37% of the global market share and saw a 58% growth in revenue, achieving a total of US$1.78 billion. Furthermore, the company experienced a substantial profit increase of 47%, totaling 4 billion yuan (~US$560 million).
Last year, Semcorp’s production volume of separators reached 70 billion m2. The company’s recently inaugurated factory in Suzhou and the forthcoming Hungarian plant sets the stage for an ambitious goal—increasing their production capacity to a whopping 175 billion m2 by the end of 2025. This ambition is fueled by ongoing orders from prestigious clients such as CATL and BYD, who together account for 60% of the world’s automotive battery production.
However, Semcorp continues to face a number of challenges despite offering products at half the price of their Japanese and Korean competitors. Outside of China, only a handful of battery manufacturers have opted to use their products, largely due to concerns about product quality and stability. A separator’s primary role is not just to isolate, but also demonstrate sufficient permeability. Lighter and thinner separators can drastically reduce the weight of the battery core. Although the industry standard thickness is 25 μm, some innovative manufacturers have produced separators as thin as 20 μm. Non-uniform thickness can cause uneven battery conduction, triggering to a temperature surge. European battery manufacturers, known for their high specification standards, naturally demand superior stability and uniformity in separators.
Semcorp has recently secured a partnership with Morrow, signing a supply contract for their first entry into the European market. The company will start supplying Morrow with lithium battery coated film in the latter half of 2023, further expanding Semcorp’s global influence.
Meanwhile, Semcorp faces a different set of challenges in the US. Despite announcing their intention to establish a factory in the US over a year ago, tangible progress has yet to be made. This delay can be attributed to President Biden’s Inflation Reduction Act, which disallows batteries and battery raw materials originating from “foreign entities of concern” from being eligible for tax relief subsidies. Even if a Chinese company establishes a factory on American soil, its eligibility for the scheme could be contentious, explaining the absence of any detailed announcements.
Meanwhile, Asahi Kasei, which slipped to third place globally after being overtaken by Semcorp, is preparing to construct a new factory in the US by 2026. Amid these developments, the global competition over raw materials for automotive lithium batteries is intensifying and becoming increasingly influenced by government policies.
(Image Source: Semcorp)