Samsung SDI has strengthened its earnings resilience amid the ongoing “battery chasm” driven by slowing electric vehicle (EV) demand, significantly reducing losses and returning to net profit.
The company reported a consolidated operating loss of 155.6 billion won ($115 million) for the first quarter, a sharp improvement from a loss of 434.1 billion won a year earlier. Revenue rose 12.6% year-on-year to 3.576 trillion won, while net profit reached 56.1 billion won, marking a turnaround into the black.
By business segment, the battery division remained in the red but showed clear signs of improvement. It posted revenue of 3.354 trillion won and an operating loss of 176.6 billion won, narrowing its deficit compared to the previous year. Meanwhile, the electronic materials division maintained stable profitability, recording revenue of 222 billion won and operating profit of 21 billion won.
The recovery in the battery segment was largely driven by non-EV applications. Demand increased for energy storage systems (ESS), uninterruptible power supply (UPS) systems, battery backup units (BBU), and power tools, contributing to overall revenue growth. In particular, ESS batteries benefited from expanding production and sales in the U.S. market, supporting margin improvement.
Additional support came from U.S. government incentives under the Advanced Manufacturing Production Credit (AMPC), which helped offset cost pressures. Increased sales of high-value cylindrical batteries also contributed to improved profitability.
The electronic materials business also showed a positive trend. Solid demand for semiconductor materials continued, while shipments of display materials increased, supported by strong sales of flagship smartphones from major manufacturers.
Samsung SDI emphasized that the latest performance reflects structural improvements rather than short-term cost-cutting. The company noted that its proactive efforts to build a resilient supply chain in response to U.S. “Prohibited Foreign Entity (PFE)” regulations have strengthened its long-term competitiveness.
The company also highlighted its multi-year supply agreement with Mercedes-Benz as a key step in expanding its customer portfolio.
Looking ahead, the outlook remains cautiously optimistic. Demand for EV batteries is expected to recover, supported by expanded subsidy policies in major European markets. The ESS sector is also projected to grow, driven by rising investments in AI data centers in the United States.
The electronic materials division is expected to maintain stable growth, backed by improving semiconductor market conditions and increasing demand for OLED materials.
Industry analysts say Samsung SDI is responding flexibly to market changes by shifting part of its focus from EV batteries to power and industrial applications. While short-term challenges remain due to the EV slowdown, improvements in product mix and customer diversification are helping the company restore its profitability.
If this trend continues, Samsung SDI’s target of returning to full profitability in the second half of the year appears increasingly achievable.
