[Agile Electronics Story] 'Dongbak' Material Gaining Attention Amid Doosan Solus Sale Rumors

[Asia Economy Reporter Ki-min Lee] ‘Agile Electronics Story’ is a column that keenly examines small pieces of information about electronic and mechanical products and devices. We kindly cover hot new products frequently appearing in advertisements and news, nostalgic products, and puzzling product and industry terms and news with the heart of a beginner.

Recently, as reports about Doosan Group selling its stake in Doosan Solus due to Doosan Heavy Industries' management difficulties have frequently surfaced, interest has been rising. While the OLED materials, a major business sector of Doosan Solus, are well known, many are still unfamiliar with the role of 'dongbak' (copper foil). In this 'Agile Electronics Story,' we will look into what dongbak is as a material and the prospects of the business.

In fact, even before the talks of selling Doosan Solus emerged, dongbak was regarded in the industry as a 'rising material.' Dongbak, which was widely used in circuit boards (PCB) for smartphones and 5G, IC chips, and USIMs, has recently seen increased demand as a copper foil for secondary batteries (battery foil) due to the rising demand for secondary batteries.

Secondary batteries refer to batteries that can be used semi-permanently through charging rather than being discarded after one use. The inside of a secondary battery mainly consists of cathode materials, active materials, electrolyte, anode materials, and separators. Dongbak acts as a support included in the anode material of the secondary battery, serving as a pathway for current flow and also dissipating heat generated in the battery to the outside. Dongbak is made through a highly advanced process using thin copper foil about 1/15 the thickness of a human hair. The thinner the dongbak, the more active material can be filled in the anode, thereby increasing battery capacity.

Structure of Secondary Batteries and the Role of Copper Foil (Anode Foil)
[Image source=Doosan Solus]

To manufacture dongbak for electric vehicles, there are roughly four major process steps. First, high-purity raw materials are dissolved in an electrolyte solution to produce plating electrolyte. Copper ions in the produced electrolyte are plated onto a drum and adjusted to a specific thickness. The battery foil produced on the plated drum is then rolled up like toilet paper. Afterward, it is cut to the size requested by customers. Finally, it undergoes inspection to check if it functions properly and if the thickness is uniform.

As mentioned earlier, global demand for dongbak has surged sharply in recent years. Typically, about 4g of dongbak is used per smartphone, but as global automakers have fully entered the electric vehicle market, demand has exploded. Medium to large batteries for electric vehicles use 35kg to 40kg of dongbak. According to market research firm SNE Research, the electric vehicle battery market using dongbak is expected to grow at an average annual rate of 40% until 2025. The global market size projected by the industry for 2025 is 14.3 trillion KRW. Currently, Chinese companies such as Changchun (CCP) and Wason lead the secondary battery dongbak market share, with Korean companies SK Nexilis (formerly KCFT) and Iljin Materials closely following.

[Image source=Yonhap News]

Domestic conglomerates have also identified dongbak as a new growth business and entered the market. KCFT originated from LS Mtron's dongbak business. LS Mtron sold its dongbak business to the US private equity firm KKR for 300 billion KRW due to poor performance. SKC officially announced the acquisition of KCFT in June last year and completed the payment of 1.2 trillion KRW in January this year, finalizing the acquisition process. Recently, the company changed its name to SK Nexilis. In October last year, it demonstrated technological capability by mass-producing the world's thinnest ultra-thin dongbak with a thickness of 4μm, 1.4m wide, and the world's longest length of 30km.

Doosan Solus, which had been engaged in dongbak business for smartphones and 5G, has also entered the electric vehicle battery dongbak business. Doosan Solus's origin, Doosan Electronics BG, started the dongbak business in 2014 by acquiring Circuit Foil in Luxembourg. Initially producing dongbak mainly for circuit boards, it began construction of a dongbak factory in Hungary in 2018. Doosan Solus, which became an independent company last year, plans to start mass production of dongbak with an annual capacity target of 10,000 tons once the Hungary plant is completed in the second half of this year. Dongbak produced in Hungary is known to be supplied to European secondary battery companies including LG Chem and SK Innovation.

Doosan Group has set a plan to sell its stake in Doosan Solus at a high valuation due to the future value and business potential of the dongbak industry. As of the 4th, Doosan Solus's market capitalization is 975.8 billion KRW. Doosan values the company at about 1.5 trillion KRW, including future potential. Accordingly, Doosan Group and Chairman Park Jung-won are considering selling 61% of shares and management rights for about 800 billion KRW. However, due to the economic difficulties caused by the COVID-19 pandemic, there are cautious views that finding a buyer may not be easy.