Sep 082011

Once an under-developed backwater filled mostly with peasants and farmers, South Korea has accelerated like a top-fuel dragster in the last few decades to become one of the world’s most powerful economies and a huge player in industries ranging from high-technology and telecommunications to ship-building and heavy construction. South Korea’s battery makers have just added yet another scalp to the list of sectors once dominated by Japan, overtaking Japanese producers of lithium-ion batteries.

According to a report just published in the Nikkei, a Japanese news title, the second quarter of this year saw Japan’s hold of global production of li-ion batteries drop to just 33.7 per cent between April and June. Over the same period, South Korea’s battery makers expanded their combined share of the global li-ion business by 4.9 points, taking the share to a whopping 42.6 per cent.

If the trends seen by South Korean domination of computers, mobile telephones and other technologies are anything to go by, this is great news for anybody driving an EV or hybrid vehicle and perhaps even better news for the planet. South Korean companies have wrought great revolutions in other industries, as they bring ingenuity, a great hunger for success and perhaps most importantly, low costs, to bear on each new product group or technology.

Electric vehicles (EVs) and hybrid cars typically depend on high-tech battery packs, almost always made from lithium-ion battery cell technology, to provide all or some of their power. Any great strides made in overall costs and technological innovation by South Korea’s battery producers will inevitably benefit people driving environmentally-friendly vehicles.

Of course, part of the reason for Japan falling behind other nations in this year’s second quarter is the horrific combination of a massive earthquake, a gigantic tsunami and a nuclear emergency that all but destroyed the country’s activity for several months earlier this year. However, analysts say that despite Japan’s li-ion battery makers bringing their production back up to speed, the cost of production will continue to impede Japan’s ability to compete with other nations, most notably South Korea.

The data on li-ion battery production was released by Japanese market research firm Techno Systems Research Company. In its report published Thursday, the company said that strong sales of batteries used in mobile phones drove the huge expansion in production by South Korean firms.

South Korea’s Samsung SDI was the top manufacturer of li-ion batteries, its share of the market rising by 4.3 points to hit 25.3 per cent. LG Chem Ltd., which was the third-biggest producer in the second quarter, saw its share rise to 17.3 per cent, an increase of 0.7 points.

Japanese battery maker Sony Corporation, which sits in fourth place, saw its share sag 2.5 points, to 7.9 per cent. Sony’s output of batteries was hit hard when the earthquake on 11 March hit both a production subsidiary and its parts suppliers.

Sanyo Electric, the second-biggest producer of li-ion batteries in the world, lost 1.4 points on its market share, falling to 18.4 per cent. Panasonic, which owns Sanyo, held 4.6 per cent of the market.

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