Good afternoon, everyone. Thank you for joining Samsung SDI 2025 first-quarter earnings call. After today's presentation, we'll move on to the Q&A session with the analyst. Please press star one button on your phone if you have any questions. Now we'll begin 2025 First-Quarter Earnings Results.
Good afternoon. Good afternoon. I am Yoon-tae Kim , Executive Vice President of the Business Management Office at Samsung SDI. First, thank you for joining today's earnings call. Joining me are CFO Jung-sun Park , EVP Jung-sun Park for Automotive and ESS Battery , EVP Hanjae Cho for Small Battery , and VP Ik-soo Kim for Electronic Materials . We will provide simultaneous interpretation for the earnings presentation and consecutive interpretation for the Q&A session.
Now we will begin Samsung SDI's 2025 first-quarter earnings call. First off, please note that starting with the 2024 3Q results, the profit or loss from discontinued operations is separately stated due to the decision to discontinue the polarizer film business. Today's presentation will also follow suit. I will start with our 2025 first-quarter financial results. The first-quarter revenue was KRW 3.2 trillion, down 15% QoQ and 34% YoY due to slowing market demand.
Operating profit recorded a loss of KRW 434 billion, including results from discontinued operations. 1Q first-quarter revenue was KRW 3.5 trillion, and operating profit posted a loss of KRW 426 billion. Pre-tax profit recorded a loss of KRW 357 billion, including non-operating profits. Net profit posted a loss of KRW 216 billion. Next is our financial status at the end of the first quarter. Assets increased to KRW 40.7 trillion, up by KRW 113 billion from the end of 2024 due to CapEx, mainly on EV batteries. Liabilities rose to KRW 19.2 trillion, up by KRW 143 billion year- over- year due to increased debts and accounts payables driven by raw material purchases. CapEx for the first quarter recorded KRW 774 billion. For detailed financial status, please refer to the appendix. Now I will present the first-quarter financial results of each business unit.
First off, the first-quarter revenue for the battery business was KRW 2.98 trillion, down 16% QQ and 35% YoY. Operating profit recorded a loss of KRW 452 billion. The first-quarter revenue decreased due to EV and parts for customers destocking and seasonality in ESS. Profitability declined due to lower fab utilization rate and higher fixed cost. For the Electronic Materials business, revenue slightly increased and profitability also improved thanks to enhanced demand centering on OLED materials. Next, the key business highlights of the first quarter. First, we began full-fledged operation at our U.S. fab for prismatic batteries. We initiated early operation of the ramp-up at the Stellantis Joint Venture First Line, and now we're operating at high yields. Additionally, we broke ground for GM Joint Venture targeting mass production in 2027. Through these developments, we plan to strengthen our prismatic battery supply capabilities in the U.S.
Furthermore, our high-performance prismatic EV battery was recognized for the world's number one energy density, fast charging, and battery safety among mass-produced batteries. We won the President's Prize from the IR52 Jang Young-shil Award , affirming our technological capabilities in the industry. For cylindrical batteries, we initiated mass production of 46-series cylindrical batteries and plan to expand our supply to EV projects. Through this endeavor, we'll be securing the market advantage by diversifying the product portfolio and strengthening the product competitiveness. In addition, we expanded applications for cylindrical batteries. We signed an MOU with Hyundai Motor Group for joint development of specialized robot batteries. While continuing to expand sales of BBU, we're pushing forward with HEV battery projects. We'll also enlarge the market and customer base for small batteries to overcome a slowdown in demand. Next is a market forecast and core strategies for the second quarter.
Market demand is expected to be gradually recovered, but uncertainty from recent tariff policies is increasing demand volatility. In response, we'll closely monitor internal and external developments, actively respond to customer demand changes, and increase sales by targeting new customers and applications to improve our performance. For the EV market, demand is recovering centered around Europe as major OEMs reduce inventory levels and as CO2 regulation and EV-friendly policies take effect. However, risk of demand volatility is likely to persist due to uncertain political issues such as tariffs. We'll actively respond to shifting demand from key European customers while finalizing and securing new high-nickel, LFP high-nickel, LFP and 46-series projects with EU and the U.S. customers as part of our mid-to-long-term growth strategy. Additionally, we'll enter the HEV market with cylindrical batteries and prepare and upgrade all solid-state battery samples to support future growth.
The ESS market is expected to grow fast due to expansion of renewable energy and AI data centers, particularly in the utilities and UPS market. The Ministry of Trade, Industry, and Energy's recent confirmation of the 11th Basic Plan for Power Supply and Demand is expected to expand opportunities. We'll expand sales of high-safety, high-energy density Samsung Battery Box and strengthen UPS solution offerings in North America and Europe. Also, we'll actively participate in domestic electricity grid stabilization projects for higher growth. In the small battery market, power tool demand recovery is likely to be delayed due to the sluggish housing market caused by high interest rates and high inflation. On the other hand, BBU demand is projected to grow with the expansion of AI data centers.
We'll focus on expanding sales of high-power batteries produced in non-Chinese fabs to mitigate the tariff impacts targeting power tool and BBU. For IT applications, we aim to maximize sales and profitability through first-in-strategy for our major customers' flagship smartphones scheduled to be launched in the second half. In the Electronic Materials market, way for input of major customers will increase thanks to heightened demand for high-value AI chips. For OLED, material demand will remain strong, supported by increased panel production in preparation for new smartphone launches in the second half. In response, we will expand sales of high-value products such as semiconductor patterning materials, SOH, SOD slurry, and foldable OLED materials. For sustainable growth, we will also enter into new semiconductor material markets and pursue product approvals for next-generation OLED platforms.
Although uncertainties in the business environment still remain high in the second quarter, with the first quarter expected to mark the bottom, we see signs of improvement as inventory slowing, utilization rate is recovering, and cost-saving effects are materializing. Even in challenging conditions, we'll continue pursuing opportunities to expand sales while steadily preparing for future markets. Now we'll move on to the Q&A session, which will be provided in Korean, followed by consecutive interpreting in English. If you have any questions, please follow the operator's guidance.
[Foreign language] 지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다. 원활한 회의 진행을 위하여 질문은 한 분당 두 가지 이내로 부탁드립니다.
Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per each participant.
[Foreign language]처음으로 질문해 주실 분은 하나증권의 Hyun-soo Kim 님입니다.
The first question will be provided by Hyun-soo Kim from Hana Securities. Please go ahead with your question.
[Foreign language] 예, 안녕하십니까. 하나증권의 김현수입니다. 질문 기회 주셔서 감사합니다. 저는 2분기 실적에 대해서만 좀 여쭙고 싶은데요. 앞서 말씀 주신 대로 전반적인 시장 상황과 전략들에 대해서 말씀을 주셨는데, 화구별로 실적에 대한 전망은 어떤지 말씀을 부탁드리겠습니다. 네, 감사합니다.
Thank you for this opportunity to ask my question. In your presentation, you outlined the market conditions and key strategies for the second quarter. Could you provide a more detailed performance outlook for each business segment? Thank you.
[Foreign language] The impact of tariffs, but in Europe, demand is expected to gradually improve due to electric vehicle support policies, leading to increased sales. ESS may also be affected by tariffs, but with the expansion of renewable energy and increased power demand driven by AI industry growth, strong sales of Samsung Battery Box, SBB, and UPS are expected to continue, driving overall performance in the mid-to-large segment. For mid-to-large batteries overall, we expect sales to increase compared to the previous quarter and to see meaningful improvement in profitability. For small batteries, while a full recovery in demand for power tools and micro-mobility batteries is expected in the second half, in the second quarter, with customers' inventory levels decreasing, strengthened promotions, and expanded sales for new applications such as BBU, we expect the loss margin to be significantly reduced compared to the previous quarter.
[Foreign language] 전자재대도 1분기 계절적 비수기 이후 반도체 소재 판매 증가와 하반기 출시되는 신규 스마트폰용 OLED 소재 판매 증가로 2분기 매출 성장 및 이익률 개선을 전망하고 있습니다. 전사적으로 전망을 종합해 보면, 지난 1분기를 저점으로 점차 실적을 개선시켜 나가도록 하겠으며, 앞서 말씀드린 매크로 불확실성이 높은 상황이므로 시장을 면밀하게 센싱하고 고객과 긴밀하게 협의하여 잘 대응해 나가도록 하겠습니다. 이상입니다.
Thank you for your question. This is Jong-chun Kim, the CFO of the company. As previously discussed, due to the increased volatility associated with tariffs, the Q2 performance may not meet initial expectations. However, we anticipate a substantial improvement compared to the first quarter. By business unit for EV batteries, while demand volatility in North America may be high due to the impact of tariffs, we expect a gradual recovery in demand in Europe driven by EV-friendly policies, which should lead to an increase in our sales. ESS may also be affected by tariffs, but with the expansion of renewable energy and increasing power demand driven by AI growth, cross-sales of SBB and UPS are expected to continue. As a result, we anticipate overall revenue growth for mid-to-large-sized batteries compared to the previous quarter, along with a meaningful improvement in profitability.
Although the demand for power tools and micromobility batteries is expected to make a further recovery in the second half of the year, we expect significant loss reduction in Q2 compared to the previous quarter thanks to the reduced customer inventory levels and strengthened promotions, along with increased sales from a new application, namely BBU. Following the seasonal slowdown in Q1, sales of semiconductor materials are expected to increase, along with rising sales of OLED materials for new smartphones launching in the second half of the year. As a result, we anticipate revenue growth and improved profit margin in Q2. From a company-wide perspective, we will focus on steadily improving our performance from what we recognize as the bottom point in Q1. Given the ongoing macroeconomic uncertainties, we will closely monitor market development and maintain strong collaboration with our customers to respond effectively. Thank you.
[Foreign language] 네, 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 UBS 증권의 김상욱 님입니다.
The following question will be presented by Sang-uk Kim from UBS Securities. Please go ahead with your question.
[Foreign language] 안녕하세요. 질문 기회 주셔서 감사합니다. 현재 미국 트럼프 행정부의 관세 정책 불확실성이 지속되는 상황인데요. 현재 미국의 관세 정책이 Samsung SDI 사업에 미치게 될 영향과 그리고 향후 회사의 대응 방안이 궁금합니다. 두 번째로 유럽 또한 3월 초에 전기차 CO2 배출량 규제 수정안 및 전기차 보조금 정책을 포함한 액션 플랜을 발표했었는데요. 위와 같은 유럽의 정책 변화가 SDI 사업에 또 어떤 영향을 미칠지 어떻게 보시는지 말씀 부탁드리겠습니다. 감사합니다.
Thank you for the opportunity to ask questions. I have two questions. First question is that the uncertainty surrounding the tariff policies of the Trump administration continues. What is the impact on the company, and how do you view the outlook moving forward? The second question is, at the beginning of March, Europe announced an action plan that includes a revision of the CO2 emission regulations for EV and a policy for supporting EVs. How will this action plan affect SDI's business?
[Foreign langauge] a burden on the company's performance both directly and indirectly. To explain in more detail by product, first, for EV batteries, since we are producing locally in the U.S., there is no direct impact from tariff imposition, but since many battery materials and components are being imported here, cost burden is expected to increase. Also, since our customers' EVs produced in Mexico and Canada could also be subject to tariffs, this could lead to higher vehicle prices and act as a factor for demand decrease. For ESS batteries, as the proportion of sales in the U.S. is high and we are currently producing outside the U.S. and exporting to the U.S., we cannot avoid the impact of tariffs. We will work closely with our customers to respond to this issue.
is also a possibility that it could lead to an increase in the prices of all products and bring about an overall slowdown in demand. As I mentioned earlier, because the uncertainty is so high, for the time being, we will closely monitor trends related to tariff policies and consult with our customers to come up with appropriate countermeasures so that the impact on the company can be minimized. That is all.
I will answer the first question. My name is Yoontae Kim. I'm the EVP of the Business Management Office. The unpredictability of U.S. tariff policies makes it challenging to accurately assess their full impact. However, they are expected to place both direct and indirect pressure on the company's performance. Let me delve into details for each product. First, for EV batteries, since production is done locally in the U.S., the direct impact of tariffs is limited. However, since many battery materials and components are imported from overseas, cost burdens are expected to increase. EVs produced in Mexico and Canada by our customers may also be subject to tariffs, which could lead to higher vehicle prices and a potential decrease in demand. Since a large portion of our ESS batteries are sold in the U.S. but manufactured abroad and exported to the market, they are inevitably subject to tariffs.
We will work closely with our customers to respond appropriately to this situation. For small-sized batteries, since a large proportion of our major customers' production is outside the U.S., a negative impact is anticipated. Furthermore, if the tariff issue becomes prolonged, it could lead to an overall increase in product prices, which may potentially dampen demand across the board. As uncertainty surrounding tariff policies is expected to persist for the time being, we will closely monitor developments and work with our customers to devise appropriate countermeasures aiming to minimize the impact of tariffs. Thank you.
[Foreign language]두 번째 질문에 대해서는 제가 답변을 드리겠습니다. 저는 중대형 전략 마케팅실장 부사장 박종-선입니다. 3월 초에 유럽의 전기차 보조금 정책 등 액션 플랜이 발표됐는데, 여기에 대해서 이 액션 플랜이 당사에 어떤 영향을 미칠 것인지 이걸 좀 답변을 드리겠습니다. EU 집행위원장은 자신의 임기 목표 중 하나로 자동차 산업 경쟁력 강화를 선정했고, 지난 2024년 3월 5일 이를 위한 액션 플랜을 발표하며 향후 정책 지원 방향성을 제시하였습니다. 해당 내용에 따르면 CO2 배출량 규제가 일부 완화가 되었고, 전기차 수요 촉진을 위한 다양한 정책 도입과 함께 미국 AMPC와 유사하게 역내 산업 보호를 위한 배터리 생산 인센티브 도입도 검토 중인 것으로 확인되었습니다. 또한 유럽 내 가장 큰 시장인 독일도 지난 2024년 4월 9일 전기차 구매 세제 혜택 확대와 인프라 확충 지원 정책을 발표하는 등 유럽 내에서 전기차 소비 촉진을 위한 정책이 확대될 것으로 예상됩니다.
유럽의 전기차 수요 성장세가 둔화되다가 최근 들어 다시 반등 조짐을 보이고 있고, 이러한 가운데 이러한 지원 정책들은 전기차 수요 회복을 앞당길 수 있을 것으로 기대가 되며, 특히 당사의 경우에는 유럽향 매출 비중이 상대적으로 높기 때문에 실적에 긍정적인 영향을 줄 것으로 기대되며, 라인 운영 효율화 등을 통해서 우호적 정책 효과를 충분히 살릴 수 있도록 하겠습니다. 감사합니다.
This is Jung-sun Park , the EVP for Automotive and ESS Battery Business, and I will be answering your second question related to Europe's action plan and its impact on Samsung SDI's business. The European Commission President has made strengthening the competitiveness of the automotive industry one of the key objectives of her mandate, and on 5th of March, an action plan was announced outlining the future direction of policy support. According to the plan, while CO2 emission regulations have been partially relaxed, various measures will be introduced to stimulate the demand for EVs. Similar to AMPC of the U.S., EU is also considering the introduction of battery production incentives to protect its domestic industries. In addition, Germany, the largest market in Europe, announced new policies on April 9th to expand tax incentives for EV purchases and to boost infrastructure development.
As a result, similar initiatives to encourage EV adoption are expected to spread across Europe. Although the growth of EV demand in Europe had previously slowed, recent signs point to a potential rebound. Supportive government policies are expected to accelerate the recovery in EV demand. Given our company's relatively high exposure to the European market, we anticipate a positive impact on our performance. We will actively seek to maximize the benefit of these favorable policies through enhancing the efficiency of production line operations and other measures. Thank you.
네, 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 미래에셋증권의 김철준 님입니다.
The following question will be presented by Chul-joong Kim from Mirae Asset Securities. Please go ahead with your question.
안녕하세요. 질문 기회 주셔서 감사합니다. 미래에셋 김철준입니다. 저도 두 가지 질문 드릴 텐데요.
먼저 첫 번째는 저희 Stellantis 북미 JB에 관련된 질문인데, 저희가 라인 가동은 잘 하고 계신 것으로 알고 있는데, 최근에 고객사의 판매량 자체가 기대치에 조금 미치지 못하는 모습을 보이고 있어서 저희가 원래 계획했던 JB의 생산이나 판매 전망에 혹은 변화가 없는지 조금 업데이트 부탁드리고요. 두 번째 질문은 저희가 최근에 자금 조달 이슈가 있었어서 투자 기조와 캐피탈 관련된 질문 드리겠습니다. 시장에서는 저희가 과거에 상대적으로 좀 보수적 투자 기조를 가지고 있었다라고 이해하고 있고, 이번 유상증자를 기점으로 해서 저희 내부적인 투자 기조나 시장 대응에 대한 전략들이 좀 변화하고 있는 건지, 그리고 추가적으로 올해나 향후의 캐피탈 전망이 어떠신지 답변 부탁드리겠습니다. 감사합니다.
Thank you for the opportunity to ask questions. I also have two questions that I would like to ask. The first question is that the sales of Stellantis new EVs in Q1 were weaker than expected. Has there been any change in the sales outlook for Stellantis joint ventures? The second question is this one: while competitors are scaling back CapEx in response to market demand changes, SDI appears to be taking a more aggressive approach by continuing to invest and even carrying out a capital increase. Given the historically conservative investment stance, has there been a shift in your investment approach? Thank you.
첫 번째 질문에는 제가 답변을 드리겠습니다. 전문 실장 박종-선입니다. 최근 미국 관세 관련 불확실성 속에 고객이 멕시코, 캐나다 공장 가동을 일시 중단하고, 그래서 당분간 수요 변동성이 클 것으로 예상됩니다. 이런 상황에서 저희는 고객과 함께 올해 판매 전망을 좀 더 면밀히 재점검하고 대책을 검토하고 있습니다. 현재 공급하고 있는 기존 모델 외에도 추가 다른 모델 향으로의 판매 확대하고, 시나리오별로 효율적인 라인 운영 방안 등을 잘 고민하고 협의해서 가동률을 제고할 수 있도록 최선을 다하도록 하겠습니다.
Thank you. I will answer your first question. This is Jung-sun Park , the EVP of the Automotive and ESS Battery Business. Amid recent uncertainties related to US tariffs, our customers have temporarily suspended operations at their factories in Mexico and Canada. Consequently, we expect significant demand volatility in the near future. We are working closely with our customers to reassess this year's sales outlook and explore appropriate countermeasures. In addition to the current models we are supplying, we will work closely with our customers to expand sales to our other model lines and to develop efficient line operation strategies for various scenarios in order to improve utilization rates. Thank you.
네, 두 번째 캐피탈 기조, 투자 기조에 대해서는 제가 답변을 드리겠습니다. 저는 경영지원실의 김윤태 부사장입니다. 전기차 배터리 사업은 투자를 개시하면서부터 양산에 이르기까지 한 2, 3년 정도의 시간이 소요되는 특징이 있기 때문에 단기적인 시황 흐름보다는 중장기적인 시장 그리고 수요에 대한 전망을 기반으로 진행되어야 한다고 생각하고 있습니다.
그래서 당사는 중장기 지속 성장을 위해서 생산 거점 확대하고, 그리고 케미스트리, 폼 팩터의 다변화, 마지막으로 미래 기술 확보가 핵심 요인이라고 생각하고 있고, 이를 위해서 GM과의 JV, 그리고 LFP와 468, 그리고 전고체 배터리 투자 등을 진행하고 있습니다. 금번 유상증자는 이 같은 장기적인 관점에서 저희가 계획하고 있는 투자를 보다 안정적으로 진행하기 위해 선제적으로 자본 확충을 한 것이고, 계획대로 차질 없이 투자를 진행해서 향후 본격적인 시장 수요 회복 시점에 더 크게 저희가 반등할 수 있도록 그렇게 준비를 해나가기 위한 절차라고 그렇게 생각해 주시면 감사하겠습니다. 이상입니다.
This is EVP Yoontae Kim of the Business Management Office. I will be answering your second question related to capex and investment and stance. The EV battery business typically takes 2-3 years from the start of investment to mass production. Therefore, investment should be driven by mid to long-term market and demand forecasts rather than short-term market trends.
We believe that expanding production bases, diversifying chemistries and form factors, and securing future technologies are key factors for sustainable mid to long-term growth. To this end, we plan to pursue joint ventures with GM and invest in LFP batteries, 46-phi, and all solid-state battery technologies. This capital increase is being proactively undertaken to ensure the secure execution of our long-term investment plans. We will move forward without delays, positioning ourselves for a stronger rebound when market demand fully recovers. Thank you.
네, 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 NH 투자증권의 주민우 님입니다.
The following question will be presented by Min-woo Ju from NH Investment & Securities . Please go ahead with your question.
[Forign language]질문 감사합니다. 저도 두 가지 질문이 있는데요. 첫 번째는 이번 유상증자 자금 사용 목적을 보면 선발이 공장 증설에도 자금이 사용될 예정인 것 같은데, 현재 낮은 가동률을 감안했을 때 추가 증설을 하시는 배경이 궁금하고요. 두 번째는 아까 말씀하신 원형 배터리의 적용처 확대 추진에 대한 부분인데요. 구체적으로 진행되는 게 있다면 설명 부탁드립니다. 감사합니다.
Thank you. I also have two questions. The first question is that the capital increase plan includes investment for expansion in Hungary. What is the rationale for pursuing further expansion despite the current low utilization rate at the facility? The second question is that earlier you have mentioned plans to drive a recovery in the small battery segment through entry into new applications. Could you please elaborate on these plans in more detail? Thank you.
[ Foreign language]네, 첫 번째 질문, 헝가리 가동률이 낮은 상황에서 추가 증설하는 이유에 대해서 제가 설명을 드리겠습니다. 정경 전문 실장 박종-선입니다. 2023년 하반기부터 시작된 캐즘 영향이 계속되고 있는데요. 현재 저희 헝가리 가동률은 높지는 않은 상황인데, 앞서 말씀드린 것처럼 2차 전지 투자는 지금 당장의 수요가 아니고 최소 2, 3년 후에, 최소 2, 3년의 긴 호흡에서 이루어져야 합니다.
[Foreign language] 그래서 헝가리 공장 투자는 현재 주력 제품인 저희 각형 하이니켈 배터리 캐파뿐만이 아니고 LFP, 4680과 같은 신규 제품 양산 라인의 확충에 중점을 두고 이루어질 예정이고요. 2027년과 2028년 이후의 시장을 대응하기 위한 선제적인 투자 증설로 이해해 주시면 고맙겠습니다. 이와 함께 기존 라인과 설비를 제조 및 전환해서 신규 라인 증설 비용을 감축하는 등 투자 효율 개선을 위한 노력도 함께 진행 중이라고 말씀드릴 수 있겠습니다. 이상입니다.
Thank you for your question. I will be answering your first question related to the investment in Hungary. This is EVP Jong-chun Kim from Automotive and ESS Batteries. The impact of Chasm that began in the second half of 2023 persists, and the current utilization rate in Hungary remains relatively low. However, as previously mentioned, investment in the battery business should be approached with a long-term perspective guided not by present demand, but by projections over a minimum horizon of 2- 3 years.
The investment in the Hungary factory will focus not only on increasing capacity for the current main product, prismatic high-nickel batteries, but also on adding production lines for new products, including LFP and 46-phi batteries. This expansion is designed to position the company to meet market demand starting in 2027-2028. In parallel, efforts are being made to enhance investment efficiency by renovating and converting existing lines and facilities, which helps to reduce the cost associated with expanding new lines. Thank you.
Foreign langauage] 네, 두 번째 질문인 원형 배터리 채용 응용처 관련된 질문은 제가 답변 드리겠습니다. 저는 소형사업부 전략 마케팅 팀장 조한재입니다. 앞서 프레젠테이션에 말씀드렸듯이 대표적인 신규 응용처로는 BBU, 하이브리드 전기차, 그리고 로봇이 있습니다. 먼저 AI용 데이터 센터 증가에 따른 수요가 빠르게 증가하고 있는 BBU의 경우에는 이미 저희가 원형 배터리 매출 내에서 10%에 가까운 비중을 차지하고 있으며, 고출력이 중요한 제품이므로 해당 특성이 강점인 당사의 원형 배터리에 대한 수요가 지속 확대될 것으로 전망됩니다.
[Foreign language] with multiple customers, and we plan to secure orders within the first half of this year to secure mid- to long-term demand. For robots, as you know, in February, we signed a memorandum of understanding with Hyundai Motor Group for the joint development of robot-dedicated batteries, and we are accelerating our efforts. We will secure a growth base through additional partnership expansion. While maintaining leadership in existing small applications, we will thoroughly prepare for the new applications mentioned earlier so that we can quickly recover growth in the near future.
This is Hanjae Cho from Small Battery Business. I will be answering your question related to cylindrical batteries. As mentioned earlier in the presentation, the new applications include BBU, hybrid EVs, and robots.
First, for BBU, which is experiencing rapid demand growth due to the increase in AI data centers, it already accounts for nearly 10% of our cylindrical battery sales. Given the importance of high power in this segment, we anticipate continued growth in demand for our cylindrical batteries with excellent high power capability. While pouch batteries have traditionally been used in hybrid EVs, growing interest is now shifting toward cylindrical batteries thanks to recent advancements in their high power, high capacity performance, and enhanced safety features. We are currently in discussion with multiple customers and aim to secure orders within the first half of this year to ensure mid to long-term demand. We are stepping up our efforts in relation to robots. In February, we signed an MoU with Hyundai Motor Group to jointly develop batteries designed specifically for robots.
Moving forward, we plan to build a strong growth foundation by forming additional partnerships. While maintaining our leadership in existing small battery applications, we are actively preparing to enter new ones with the goal of quickly restoring our growth potential in the near future.
[Foreign language] 네, 마지막으로 한 분만 더 질문 받도록 하겠습니다.
마지막으로 질문해 주실 분은 다올투자증권의 유지웅 님입니다.
The last question will be presented by Ji-woong Yoo from Daol Investment & Securities . Please go ahead with your question.
[Foreign language] 네, 안녕하세요. 저 다올투자증권의 유지웅입니다. 질문 기회 주셔서 감사합니다. 저희가 지난해 ESS 사업 부분 실적이 좀 크게 개선이 되셨습니다. 올해도 이런 실적 성장세가 지속이 될 수 있을지 연간 전망을 좀 부탁을 드리고요. 두 번째로 최근에 저희가 배터리 사업 실적이 부진한 상황에서 전자재료 사업부가 어쨌든 안정적인 성과를 내고 있어서 버팀목이 되어 주고 있는 것 같습니다.
[Foreign language] 앞으로도 외형 성장에 대한 기대를 할 수가 있을지 전자재료 사업 매출 확대를 위한 전략이 어떻게 되시는지 말씀 부탁드리겠습니다. 감사합니다.
Good afternoon. Thank you for giving me this opportunity to ask questions. First question is that ESS saw significant growth last year. Do you expect this growth trend to continue this year? What is the forecast for annual performance this year? My second question is that in contrast to the underperforming battery business, the Electronic Materials business has maintained stable performance. What strategies are being pursued to further drive sales growth in this segment? Thank you.
[Foreign language] 네, 질문 감사드립니다. 첫 번째 질문, 25년 ESS 판매 전망에 대해서 제가 답변 드리겠습니다. 정경 전문 실장 박종-선입니다. ESS 시장은 신재생 에너지 확대와 AI 관련 전력 수요 증가로 25년에도 미국 시장을 중심으로 고성장이 예상이 됩니다. 이러한 추세는 당분간 이어질 것으로 전망되고요.
[Foreign language] 이러한 전망 가운데 당사는 안전성과 고에너지 밀도가 강점인 Samsung Battery Box의 제품 경쟁력을 기반으로 올해 계획된 ESS용 배터리 생산 캐파의 90% 수준에 달하는 수주를 이미 확보했습니다. 그리고 늘어나는 수요 대응을 위해 추가로 생산 효율화 및 전기차용 라인의 전환을 통해서 작년 대비 20% 수준의 캐파 증량을 진행 중에 있습니다. 이를 통해서 매 분기 매출 성장을 지속하고 연간으로 작년 대비 20% 이상의 높은 매출 성장률을 달성할 수 있을 것으로 현재 전망하고 있습니다. 다만 미국의 관세 부과에 따른 제품의 가격 상승이 수요에 영향을 줄 수도 있으므로 고객과 잘 협의해서 대응토록 하겠습니다. 또 이와 함께 미국 내 ESS용 배터리 생산 거점 확보에 대해서도 다양한 방안을 검토 중에 있는데, 이를 통해 급격히 증가하는 미국 수요에 대해 더욱 효과적으로 대응할 수 있도록 하겠습니다. 이상입니다.
Thank you for your question. I will be answering your first question related to the sales forecast related to ESS. Once again, this is Jung-sun Park In line with these prospects and leveraging the competitive advantages of Samsung Battery Box, which excels in safety and high energy density, we have already secured orders for approximately 90% of our planned ESS battery production capacity for this year. To meet growing demand, we are optimizing production efficiency and converting EV lines, which will result in a 20% increase in capacity compared to last year. As a result, we anticipate continued quarterly revenue growth and annual revenue growth rate exceeding 20% compared to last year.
However, given that tariffs may create challenges by impacting demand and driving price increases, we are committed to collaborating closely with our customers to minimize any potential impact. In addition, we are exploring various options for securing our ESS battery production base in the U.S. This would enable us to respond more effectively to the rapidly increasing demand in the U.S. market. Thank you.
[Foreign language] 네, 두 번째 질문인 전자재료 매출 확대 전략에 대해서는 제가 답변 드리도록 하겠습니다. 전자재료 사업부 전략 마케팅 팀장 김익수입니다. 전자재료 사업은 형광필름 사업 양도 발표 이후 반도체와 OLED 소재 위주로 집중하며 매출 성장 동력을 확보해 나가고 있습니다. 특히 차별화 기술 및 품질 안정성을 바탕으로 기존 고객 내 점유율을 견고히 수성하고 지속 매출 확대를 위한 고객 다변화에 중점을 두고 있습니다. 주요 소재별로 조금 자세히 설명 드리도록 하겠습니다. 반도체 소재의 경우 AI 확대가 미세 공정이 증가하고 있습니다.
[Foreign language] 이에 소재 사용량이 크게 증가하는 패턴링 소재와 연마재 소재 중심으로 매출 확대를 추진하고 있습니다. 또한 주요 반도체 고객사의 차세대 노드 변화에 적기 대응하는 한편 국내외 고객 프로모션을 강화하고 있습니다. OLED 소재는 태블릿, 모니터 등 IT 디바이스의 채용 확대에 따라 국내외 주요 고객사의 8.6세대 OLED 라인 투자와 폴더블 디스플레이 시장이 성장할 것으로 예상하고 있습니다. 이러한 변화에 당사는 고객사의 신규 플랫폼 시장을 조기 선점하고 제품 경쟁력을 강화해 나갈 예정입니다. OLED 증착 재료의 제품 포트폴리오를 확대하고 차세대 OLED용 스펙 변환 소재 개발로 고부가 제품 위주의 성장을 공고히 해 나가도록 하겠습니다. 이상입니다.
This is Ik-soo Kim, VP responsible for strategy in the Electronic Materials business, and I will be answering your second question related to strategies to expand sales of Electronic Materials. Since the divestment of Polarizer Film Business, the Electronic Materials business division has been focusing on semiconductor and OLED materials to secure growth engines.
In particular, we are solidifying our market share within existing customers based on differentiated technology and product reliability while placing strong emphasis on customer diversification to drive continued sales growth. Let me elaborate on each key material. For semiconductor materials, as AI adoption expands, the increase in advanced fine patterning processes is driving up the usage of materials, particularly in patterning and polishing materials, where we are actively pursuing sales growth. To support this, we are responding in a timely manner to the next generation new transition at major semiconductor customers while also strengthening promotional activities for both domestic and international clients. As OLED technology sees increasing adoption in IT devices like tablets and monitors, and with major domestic and global customers investing in 8.6 generation OLED lines alongside the growing foldable display market, significant growth is anticipated.
In response, we are working to strengthen our product competitiveness by establishing an early presence in our customers' next generation platform market. To support this, we are broadening our OLED materials portfolio and developing next generation OLED color conversion materials with a focus on driving growth through high value-added products. Thank you.
[Foreign language] 네, 마지막으로 저희가 온라인을 통해 사전에 취합한 질문에 대해 답변 드리고 마치도록 하겠습니다. 질문은 전고체 배터리 관련하여 현재 개발 및 준비 상황에 대한 업데이트를 부탁드리며, 전기차 외 다른 용도로 확대가 가능한지에 대해 질문해 주셨습니다. 이에 대해서는 저희 중경 마케팅 실장 박종-선 부사장께서 답변을 드리도록 하겠습니다.
Lastly, we will answer a question that we collected from the online survey in prior and close to the call. The question is about if there is any update on the current development and preparation status of our all-solid-state batteries and if it would be possible to expand the technology to applications beyond EVs. EVP Jong-chun Kim from Automotive and ESS Battery will answer this question.
[Foreign language] 예, 제가 답변 드리겠습니다. 당사가 기존에 공유드렸던 바와 같이 2027년 전고체 배터리 양산 목표를 현재 차질 없이 달성하기 위해 현재 셀 용량 확대와 제조 공정 안정화, 소재 공급망 수립 등 양산에 필요한 핵심 과제들을 추진 중에 있으며, 국내 마다라인 역시 올해 일부 투자가 진행될 계획입니다. 특히 당사의 전고체 배터리는 전기차를 주요 타겟으로 개발하고 있으나, 최근에는 부피뿐만 아니라 무게 측면에서도 높은 에너지 밀도를 요구하는 로봇, UAM 등 신시장에서도 전고체 배터리를 적용할 수 있을 것으로 기대를 하고 있습니다. 현재 전체 고객들과 협의를 진행 중이며, 향후 운영처 다변화를 통해서 사업 기회를 더욱 넓혀가도록 하겠습니다. 이상입니다.
As previously shared, we are working on key tasks necessary for mass production, such as expanding cell capacity, stabilizing manufacturing processes, and establishing material supply chains in order to meet our target of mass- production for all-solid-state batteries by 2027. Additionally, some investments in the domestic mother line are planned to take place this year. While our all-solid-state batteries are primarily being developed for EVs, we also see potential for their application in emerging markets such as robots and UAM, which increasingly demand not only high volumetric energy density but also gravimetric volume. We are currently in discussions with potential customers and plan to further expand business opportunities by diversifying applications in the future.
네, 답변 감사드립니다. 투자자 여러분들의 소중한 의견 감사드리며, 주요 경영 의사 결정에 참고하도록 하겠습니다. 그럼 이것으로 2025년 1분기 실적 설명회를 마치겠습니다. 추가 문의 사항이 있으신 경우 저희 IR 팀으로 연락 주시면 감사하겠습니다.
Thank you for the answer. We want to thank all our investors for their questions and valued opinions. We will take them into consideration when making our future business decisions. This is the end of Q1 2025 Earnings Call. If you have any questions, please contact our IR team. Thank you.