Good morning, and thank you for joining us today. I'm Yoon Tae Kim, Vice President, Business Management Office at Samsung SDI. Let me introduce our team attending today's conference call. Our CFO, Jong Sung Kim, Head of the Automotive and ESS Battery Strategy Marketing team, Michael Son, Head of the Small Battery Strategy Marketing team, Jae Young Lee, and Head of Electronic Materials Strategy Marketing team, Sang Kyun Kim.
We will now begin the earnings call of the first quarter. Let us with start with the Q1 results and financial highlights. This quarter, both the revenue and the operating profit declined compared to the last quarter due to the slowed global economy and seasonality. However, it was a leap from the year- ago quarter.
The first quarter revenue was KRW 5 trillion 354.8 billion, operating profit was KRW 375.4 billion, a decline from the past quarter, but a 32% and 16% increase year-over-year. The Energy business generated KRW 4 trillion 797.8 billion in revenue, down 10% from the prior- quarter, but 45% from the same period last year. The posted operating profit was KRW 316.3 billion, a 12% quarterly decrease, yet 92% year-over-year increase. The Electronic Materials business posted KRW 557 billion in revenue, which is down 11% from the previous quarter and down 24% from the same quarter a year ago.
The operating profit was KRW 59.1 billion, went down 55% quarter-over-quarter and 62% year-over-year. The pre-tax profit stood at KRW 551.3 billion, including KRW 185 billion of the non-operating profits, such as the equity method applied gains or losses, and the net profit was KRW 464.5 billion. The quarter and the total assets recorded KRW 32,470.2 billion, up to KRW 1 trillion 149.9 billion from the last quarter, owing to the increase in the tangible assets from the facility investments.
Liabilities recorded KRW 14 trillion 408.2 billion, up KRW 1 trillion 368.2 billion from the first prior- quarter, and the shareholders' equity pushed to KRW 17 trillion 999.2 billion, a KRW 781.7 billion increase. Next, I'd like to walk you through our ESG management performance during the quarter. Samsung SDI's push for ESG management continues to build upon RE100 commitments made last year. In the first quarter, we joined Global Battery Alliance for a sustainable value chain and became a number of Carbon Disclosure Project, supply chain program for better ESG engagement with our partners home and abroad. In order to put ESG into active and preemptive practice, we are assessing the Scope 3 emissions that encompass indirect emissions throughout the value chain.
In the second quarter, we plan to disclose the results through the sustainability report and devise the pursuant objectives and tasks for further reducing the emissions. Before we move on to enumerating the quarter results of business units, our CFO, Jong Sung Kim, will briefly talk about the recent media reports on prospective joint venture with General Motors, as well as Samsung SDI's future business strategy in the U.S.
Hello, I'm Jong Sung Kim, the CFO in Samsung SDI. We recently had a press release regarding the planned joint venture with GM. Samsung SDI and GM both agreed to invest more than $3 billion to establish a battery manufacturing joint venture in the U.S. with an aim to secure the next generation prismatic and cylindrical battery production from 2026, with more than 30 GWh capacity.
We will finalize the contract at the earliest possible future to set up smooth pathways for our manufacturing plant in the U.S. This new collaboration and talks marks the very first step to create a long-term industry-leading partnership with GM, and yet again, signals the market's appreciation of Samsung SDI's unrivaled battery technologies and quality, featuring the highest level of safety and energy density, as already attested by the partnership with Stellantis underway since last year. We see this as an impetus to expand our market presence from the Europe market to the fast-growing U.S. market, thereby ensuring our long-term growth momentum in the EV battery business. Under key management strategy of profitable and qualitative growth, Samsung SDI will continue to drive new order acquisitions and investments in order to materialize successful business growth in the U.S. market.
We would like to ask for the shareholders and investors continue to support in our resolve for a solid future. Thank you. Each business division will present the details of the first quarter results and the outlook for the second quarter.
Hello, I am Michael Son, Head of the Automotive and ESS Battery Strategic Marketing team. While this quarter's revenue declined slightly, affected by the seasonal lull and unfavorable exchange rate, the profitability went up thanks to the expanded sales of high-value automotive batteries. In terms of EV battery business, although plug and hybrid battery cells decreased because of the major European countries' subsidy cut, EV batteries saw an increase in sales thanks to new vehicle model release by our major customer with P5 application, which propelled the revenue and profitability higher than the previous quarter.
The ESS battery sales went down quarter on quarter due to the seasonality, but still witnessed a big jump year on year. In the second quarter, revenue increase and profitability enhancement is expected to be continued. Our major customer's new vehicle model launch is forecast to lead the P5 sales for EV, while the expansion of utility and UPS projects is expected to lead a great sales growth after the passing the yearly low season. Additionally, we have been making utmost efforts to secure long-term growth by promoting a joint venture with GM within this quarter in succession to StarPlus Energy, our joint venture with Stellantis. Samsung SDI will also actively prepare for our lead in next gen technology with the commencement of 46-phi and solid state batteries in this quarter. This is the end of Automotive and ESS Battery business divisions presentation. Thank you.
Good morning. I am Jae Young Lee, Head of Small Batteries Strategic Marketing. We exited the first quarter with a lower revenue than the past quarter, as it was a low season for key applications. The year-over-year figure indicated a growth. Despite slow power tool demand triggered by the weak housing demand, we managed to minimize the cylindrical battery sales drop by maintaining sales towards our strategy partners. For pouch batteries, the sales grew thanks to the customer's release of new smartphone models. In the second quarter, we expect revenue increase and profitability enhancement with gradual recovery of the demand. We plan on expanding the cylindrical battery sales through existing partnerships with key power tool customers, along with sales expansion of new applications such as outdoor power equipment.
The sales of pouch batteries is expected to continue to expand in line with the application to new model releases scheduled in the second half. This is the end of some small size battery division presentation. Thank you.
Hello, everyone. I'm Sang Kyun Kim, Head of Electronic Materials Strategy Marketing Team. The first quarter's revenue and profits were both down due to slowdown in IT demand and the seasonal demand, a seasonal lull. Though OLED and semiconductors process materials saw the sales drop due to the low market demand, the polarizer film sales posted a similar number to the past quarter, despite being the low season as a result of easement in customers' inventory adjustment and customer portfolio diversification. Amid the prospects of continued sluggish demand going into the second quarter, we are resolved to expand the sales focusing on the polarizer films.
After hitting the yearly low in the first quarter, the polarizer film sales expected to gradually recover in the second quarter and beyond. As for the materials for OLED and semiconductor processing, concerns linger due to the IT demand weak and inventory adjustments. We expect to see a turnaround in the second half due to high season and new product release effect, and we will duly prepare for the new product applications and mass production thereof to materialize the sales expansion in the second half. This is the end of Electronic Materials Division's presentation. Thank you.
Now we will close the presentation and move on to the Q&A session. Questions and answers will be provided in Korean, and consecutive interpreting will be provided in English. If you have any questions, please follow the operator's guidance.
Now Q&A session will begin. Please press star one, star and one if you have any questions. Please press star two, star and two if you want to cancel questions. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per each participant.
The first question will be provided by Woo-Hyung Cho from HSBC. Please go ahead with your question.
Yes, this is Woo-Hyung Cho from HSBC. Thank you for the opportunity to ask two questions regarding EV batteries. At the end of last month, the detailed guidelines to the IRA have been announced. As a battery maker, what kind of impact do you expect this to have on your North American investment strategy in terms of SCM requirements and also cost competitiveness? The second question is following on last year, I think this year you have seen increased sales from P5, your Gen 5 product line, which is having a positive contribution to sales and earnings. Now going forward, in terms of your next generation P6 product, which I expect once operational will further accelerate your performance improvement, what kind of technological spec or mass production plans do you have in mind?
This is the CFO. Let me take your first question. According to the newly released IRA guidelines, cathode and anode electrodes, which are a core material in battery production, were classified under constituent materials subject to the same classification criteria as critical minerals. This means that they can be sourced from countries that have a free trade agreement with the U.S., including Korea. As a result, this means less pressure on our cathode anode partners to move into the U.S. market. It's also expected to be a big help to us in terms of stable sourcing materials as well as cost competitiveness. That being said, however, because the formula for calculating value added content, which are used to determine country of origin may change at some later point.
We are continuing to review possible establishment of a local supply chain as an option for the longer term. There are some uncertainties that still remain as the guidelines do not provide a concrete definition of what they mean by foreign entity of concern, for example, or detailed provisions on the proposed AMPC tax credit program. We do expect that there will be no change to the overall policy direction, which is intended to promote local battery production. Recently, the U.S. EPA also announced new emission standards so that 67% of new car sales will be from EVs by 2032. We believe that these eco-friendly policies will continue to accelerate growth in EV demand.
As you can see from our JV with GM, strategic partnerships are very important for both OEMs and battery makers alike, and we're committed to strengthening cooperation with our customers to expand our business further in the U.S. market.
P5는 당사 고유의 기술인 하이니켈 NCA 양극재와 SCN 음극재, 그리고 스택 공법을 적용해서 에너지 밀도는 극대화하고 원가는 절감했습니다. 그리고 또한 어 적기 양산을 통해서 고객의 수요에 차질 없이 대응하면서 자동차 전지 사업 실적에 크게 기여하고 있습니다. 차세대 플랫폼인 P6 역시 신규 소재와 신공법을 도입해서 개발 중이며, 특히 양극재 니켈 비중을 구십 퍼센트 이상으로 높여서 에너지 밀도를 어 십 퍼센트 이상 향상시키고 재료비 역시 큰 폭으로 절감할 계획입니다. 이런 P6 플랫폼은 어 이십사년 어 양산 적용을 목표로 준비하고 있으며, 향후 P5, P6 등 고부가 제품 비중이 어 지속적으로 높아짐에 따라서 사업의 수익성도 향상될 것으로 어 전망합니다. 감사합니다.
Yes, this is Michael Son from the Automotive and ESS Battery Division. Let me take your question where you asked about technology differentiation and our mass production ramp-up plans. Our P5 battery cells, which are comprised of innovative high- nickel NCA cathodes and our proprietary SCN anodes, are manufactured using a new stacking method, which enables maximum energy density at lower cost. With timely ramp-up of mass production, we have been providing seamless supply to our customers with the P5 making a large contribution to our automotive battery performance. Our next- gen P6 platform, which is currently under development, will also apply the latest in material and manufacturing technology. We'll be applying cathodes with more than 90% nickel content, which will enhance energy density by more than 10% versus the previous lineup while lowering material cost significantly.
We are working on the P6 platform with the goal of starting mass production in 2024. As high value-added products like P5 and P6 make a big, a bigger share of our product portfolio, we expect profitability to improve going forward.
네, 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 Credit Suisse의 김상욱 님입니다. The following question will be presented by Sang Uk Kim from Credit Suisse. Please go ahead with your question.
네, 질문 기회 감사합니다. 첫 번째 질문은 최근 리튬을 포함해서 메탈 가격이 크게 하락하고 있는데요. 당사 자동차 전지 판매 가격에 메탈 가격이 연동되어 있는 것으로 알고 있기 때문에 저희도 판가 부담이 있을 것으로 예상이 됩니다. 판가에 대한 영향과 그리고 수익성에 미치는 영향에 대해서 말씀 부탁드리겠습니다. 두 번째 질문으로는 최근 인플레이션 영향으로 인해서 저희 미주 배터리 증설 투자 비용이 당초 예상보다 많이 상승했을 것으로 보이는데요. 투자 비용이 증가함에 따라 당사의 배터리 원가 상승의 부담 요인으로 작용하는 것이 아닌지 궁금하고, 이에 따라 또 수익성에 미치는 영향도 함께 말씀 부탁드리겠습니다. 감사합니다.
Yes, this is Sang Uk Kim from Credit Suisse. Thank you for the opportunity to ask questions. First of all, recently there's been a significant fall in metal prices, including for lithium as well. I understand that your automotive battery prices are also indexed to metal pricing, so this trend may have weighed on your ASP. What is the impact in terms of your sales price also impact to your earnings? Second question is, with recent inflationary pressure, I understand, or I would imagine that CapEx for your capacity expansion project in the U.S. may have increased, and so increased investments may push up your cost burden. How will this potentially impact your profitability?
네, 그 첫 번째 질문, 메탈 가격에 대한 부분은 제가 답변할 수 있겠습니다. 저는 경영지원실의 김윤태 상무입니다. 어, 그 배터리 재료 비중에서 큰 비중을 차지하는 리튬 가격이 말씀하신 대로 작년 사 분기를 정점으로 해서 하락 안정세를 보이고 있습니다. 그리고 말씀해 주신 것과 같이 당사는 대부분의 그 자동차 전지 프로젝트에 대해서 메탈 가격을 판가와 연동하고 있고, 당사의 소재 구매 계약에 대해서도 연동을 하고 있기 때문에 그 메탈 가격의 변동성은 대부분 상쇄된다라고 보시면 될 것 같습니다. 이제 판가와 구매가 연동 시점 차이가 있기 때문에 일시적인 손익 영향이 있을 수는 있겠지만은 뭐 분기나 연간 단위로 볼 때 수익성에 미치는 영향은 매우 제한적이라고 볼 수 있고요. 그 그리고 이제 수요 측면에서 보면은 메탈 가격 하락에 따라서 배터리 판가가 하락하는 건 맞습니다. 근데 이 배터리 가격 판가 하락이 결국 전기차의 가격 인하 요인이 될 수 있고, 이는 궁극적으로 전기차 수요 확대 및 전기차 시장 성장에 도움이 되는 긍정적인 요소로 작용할 거라고 저희는 생각을 하고 있습니다.
이상입니다.
Yes, this is VP Yoon Tae Kim. Let me take your first question. Well, as you know, lithium accounts for a significant portion of battery material costs, with lithium prices now showing more stable trends after peaking in Q4 of last year. For most of our automotive battery projects, ASP is indexed to metal prices. Because we also apply indexation clauses in our material procurement contracts, we can offset most of the volatility in metal pricing. Of course, there may be a temporary impact to our P&L from a time lag between ASP and procurement price indexation. Overall, on a quarterly or annual basis, there is very minimal impact to our profitability.
On the demand side, while it is true that falling metal prices can result in a drop in our battery ASP, This may ultimately have a positive impact on EV market growth by expanding EV demand as EV prices decline as well.
Yes, this is Michael Son. Let me take your next question regarding the impact of inflation on our U.S. project, how potentially an increase in CapEx requirements may affect our cost structure and profitability. Well, while it is true that recent inflation and the rise in FX rates have resulted in an increase in investment costs for our U.S. operations while weighing on our operating costs, still, we have been working together with our JV partner for further cost savings. We also believe the IRA tax credit scheme will also benefit us when the U.S. line becomes operational in the near future. Moreover, because the product that will be produced from our U.S. site will have bigger per cell capacity, this will also help us reduce investment per gigawatt-hour, and we'll continue to drive further productivity gains to mitigate pressure from rising costs.
The following question will be presented by Hyun-Soo Kim from Hana Securities. Please go ahead with your question.
Yes, this is Hyun-Soo Kim from Hana Securities. Thank you for letting me ask some questions. First of all, I'd like to know more about LFP batteries. As global OEMs engage in further cost saving initiatives, there's now growing interest toward LFP batteries. It's not just China, but other set makers in other countries are also starting up their own LFP development projects as well. I'm wondering if Samsung SDI also has any plans regarding LFPs, if you could take us through the development status and also your mass production plans, if any. The second question has to do with power tool batteries. Last year, the global residential property market actually was very weak, lessening demand for power tool and power tool applications.
When do you think a recovery in the power tool end market is likely?
Yes, this is Michael Son. Let me answer your question regarding possible LFP development plans, also mass production plans. As OEM strategically expand their electrification line up, we expect that the volume and entry level segments of the EV market will also grow very quickly. The ESS market is also expected to grow, driven mostly by utility applications, which tend to have less spatial restrictions but higher price sensitivity, which means that cost competitiveness is particularly key. Consequently, our strategy is to maintain competitiveness in our existing premium platforms such as P5 and P6, while also expanding our product portfolio to also include the volume segment to drive mid to longer term growth.
We will be leveraging a cobalt-free concept, including NMX and LFP chemistry to target the EV volume market as well as the utility ESS market. The volume segment platform is currently under development with commercial mass production in mind. We are working to maintain cost competitiveness while applying our proprietary technologies, including stacking prismatic form factor with strength and safety profile to continue to differentiate ourselves from other players.
Yes, this is Jae Young Lee , Head of Small Batteries Strategic Marketing. Let me take your question regarding power tools. Well, if you look at the U.S. housing market and certain metrics, which are a leading indicator for power tool demand, first of all, there's the U.S. mortgage rate, which has continued to fall from the 7% range last October to 6.4% as of last month.
While the broad Housing Market Index has been showing recovery back up from a low of 31 points last year to 45 points as of April this year. The retail channel inventory of key power tool customers also appears to have moved past the peak recorded last year, and overall, we expect a gradual recovery in battery demand. Consequently, we will be focusing on maintaining stable supply volumes based on long term supply contracts with our key accounts, while continuing to expand sales in new application areas such as outdoor power equipment. We'll also be running our production lines on a flexible basis in line with changing market demand across diverse application and markets, including air mobility, EV, et cetera, to respond to changing demand dynamics in the cylindrical battery market.
The following question will be presented by Jay Hyun Kwon from JP Morgan. Please go ahead with your question.
Yes, this is Jay Hyun Kwon from JP Morgan. I have two questions. First of all, it seems that due to the sluggish IT downstream market, both sales and earnings for your electronics material business actually has fallen year-over-year. What is your outlook for the second half of the year? If you could provide that guidance? Do you expect a recovery sometime in the second half? Second question is, certain OEM companies actually have been starting up a bit of a price competition while marking down prices. There are broad market expectations that mid to low end EV models will increase significantly going forward. How do these OEM developments impact your business, your battery business and what are your plans in response?
전자재료 사업의 하방기 전망에 대한 첫 번째 질문에 대해서는 제가 말씀드리겠습니다. 저는 전자재료 전략마케팅팀장 김상균입니다. 상반기에는 경기 침체로 인해 LCD TV, OLED 디스플레이, 반도체 등의 IT 수요 둔화가 이어지며 전자재료 사업도 어려움을 겪고 있으나 하반기부터는 고객사의 재고 소진과 금리 인상 속도 완화 및 중국 수요 개선 등으로 IT 수요가 회복되어 전자재료 실적도 개선될 것으로 전망하고 있습니다. 주요 소재별로 본다면 편광필름은 이 분기부터 주요 고객의 재고 조정 완화와 노동절 연휴 및 618 쇼핑 축제를 앞둔 중국 세트사의 프로모션용 패널 구매로 편광필름 수요 반등을 예상하고 있으며, 하반기부터는 대면적 및 고기능 TV 등 고부가 제품 위주의 판매 확대로 본격적인 매출 증가와 수익성 개선이 예상됩니다. OLED 공정 소재는 하반기 신규 모델의 판매를 확대하고, 반도체 공정 소재도 신제품 진입을 통해 매출 확대를 추진하도록 하겠습니다.
Yes, this is Kim Sang Kyun, Head of the Electronic Materials marketing team. Let me take your question regarding our outlook for the business in the second half of the year. Well, first, in the first half, the economic slowdown did lead to weak IT demand across many verticals, including LCD TVs, OLED displays and semiconductor chips, which has been challenging for Electronic Materials business. However, we expect IT demand to start recovery in the second half, driven by inventory drawdowns by customers, slowdown in the rate hike cycle by central banks, and also improved demand from China, which will likely result in improved performance, from our Electronic Materials business.
By product, for polarizer film, we expect to pick up in demand as inventory adjustments by key accounts start easing from the second quarter and also from increased buying from Chinese set makers ahead of the Chinese Labor Day holidays, also the 618 Shopping Festival for promotional applications. Starting in the second half, we expect high value added products such as large screen, high spec TVs to start driving up sales, which will result in improved sales and earnings performance for our business. We'll look to boost sales of OLED process materials for application and new panel models, while also introducing new semiconductor process materials to further expand sales for our business.
예, 두 번째 질문. OEM들의 가격 중심의 움직임이 배터리 사업에 어떤 영향을 주고 이에 따른 저희 대응 방안에 대한 질문이 있었습니다. 이 부분은 제가 답변드리겠습니다. 손미카엘 부사장입니다. 최근 일부 OEM들이 판매량을 늘리고자 가격을 인하했는데, 이는 최근 메탈 가격의 하락을 좀 반영하고 OEM들의 전동화 플랫폼을 개발하고 이후에 다수의 차량 모델에 적용하면서 발생하는 규모의 경제 효과가 기반이 되었다고 생각합니다. OEM들 간의 전기차 가격 경쟁이 심화될 경우 배터리 판가에도 영향을 줄 가능성이 있지만, 다른 한편으로는, 어, 전기차의 가격 하락이 시장 확대를 가속화할 수 있는 긍정적인 면도 있다고 봅니다. 전기차, 어, 보급 확대 과정에서 중저가 모델의 시장 규모가 크게 증가할 것으로 전망되므로, 어, 말씀드린 대로 당사는 프리미엄 제품은 물론 volume segment 플랫폼까지 포트폴리오를 확대하여 시장의 니즈에 적극적으로 대응해 나가겠습니다. 감사합니다.
Yes. This is Michael Son. I will be answering your question regarding the pricing movements by the OEMs, how this may impact our battery business and how we intend to respond. It is true that recently some OEMs have been marking down their pricing to boost sales volume, but this is largely due to the recent drop in metal prices, and also because many OEMs are now benefiting from economy of scale as they're able to apply their electrification platforms to more multiple models. If price competition between the EV makers intensifies further, this could potentially impact battery ASP. On the other hand, there could be positive upside, since a drop in EV prices could actually accelerate expansion of the overall market.
As EV penetration increases, we expect the mid to low end market to see significant growth, which is why we intend to expand our portfolio to cover not only the premium segment, but also the volume segment as well to more actively capture growing market needs.
네, 마지막으로 한 분만 더 질문 받도록 하겠습니다.
We will accept one last question please.
마지막으로 질문해 주실 분은 하이투자증권의 정원석 님입니다. The last question will be presented by Won Suk Chung from HI Investment and Securities. Please go ahead with your question.
네, 안녕하세요. 하이투자증권 정원석입니다. 저도 두 가지 질문드리겠습니다. 최근에 이제 원형 전지 관련해서 전동공구 시장은 이제 부동산 경기 때문에 좀 둔화된 모습인데, 반면에 이제 전기차 쪽이나 모비-- 그, 마이크로 모빌리티 쪽으로는 계속 시장이 확대되고 있고, 어, 언론 보도에도 나오는 걸 보면 이제 GM 같은 경우에도 원형 배터리 쪽으로 이제 어, 증설을 계획하고 계신 걸로 알고 있는데, 중장기적으로 이 전기차 쪽이나 마이크로 모빌리티 쪽의 전망과 판매 계획에 대해서 좀 말씀 부탁드리고요. 두 번째로는 이제, 어, 삼성디스플레이가 최근에 8.6세대 IT용 OLED 투자를 발표를 했는데 향후에 이제 애플리케이션이 확대되면서 OLED 소재 수요도 증가할 걸로 보입니다. 여기 관련해서 이제 저희가 어떤 추이가 있을지, 또 뭐, 신제품 개발 현황 같은 부분들에 대해서 좀 말씀 부탁드리겠습니다.
Yes, this is Won Suk Chung from HI Investment and Securities. I will also ask two questions. First, for cylindrical batteries, with the slowdown in the real estate market overall, the demand for power tools cylindrical is weak. However, on the other hand, the demand is quite strong for EV or m-mobility type applications. We have heard through the press that apparently GM is also planning a capacity expansion for its cylindrical line as well. In the mid to longer term, what is your outlook for the EV and mobility end markets? What are your sales plans toward those downstream markets as well? My second question has to do with Samsung Display's new OLED investment that they have announced. This will likely push up demand for OLED materials.
What kind of opportunity do you think this presents to your business if you are developing certain new products? Could you introduce the current status of those developments, please?
Yes, this is Jae Young Lee, Head of the Small Battery Marketing Team. Let me take your first question regarding demand for cylindrical batteries, also our sales plans. According to findings from a market research organization, the cylindrical battery market for EV and micro-mobility applications is expected to grow by 21% and 10% year-over-year, respectively. We expect our sales to grow by a much higher margin versus the broad market growth. In order to tap this continuous upside in market demand, we have already launched a new m-mobility product in the 1st quarter with a better safety profile versus our existing product. We'll also be ramping up mass production of another new product for EV application in the 2nd quarter, with improved capacity and safety features as another driver of continuous growth.
Yes, this is the Head of the Electronic Materials Division. Let me answer your question regarding Samsung Display's investment into its next generation OLED line, how that can impact our OLED material business. Well, Samsung Display, as announced, will be investing it in its next generation mid-size OLED production line for Note PC applications as an upgrade to its existing Gen 6 OLED lines for mobile and tablet applications. And this is expected to be a major driver of growth in the mid-size OLED market for IT applications going forward. Once the next gen mid-size OLED line starts up, production volume per glass will increase by more than double that of the existing Gen 6 line, which will mean a significant increase in demand for core OLED material products that of course we provide.
This includes Green Host, p-dopants, TFEs, process films, et cetera.
Yes, thank you very much. With that, we'll conclude the earnings call for the first quarter for Samsung SDI. Further inquiries, please contact us at the IR team. Thank you very much.