[Decision of the Head] Jeong Eui-seon Also Shows 'Interest'... Lee Jae-yong's Battery 'Big Picture'

[Asia Economy Reporter Park So-yeon] Since the meeting between Chung Eui-sun, Vice Chairman of Hyundai Motor Group, and Lee Jae-yong, Vice Chairman of Samsung Electronics, held last May at the Samsung SDI plant in Cheonan, Chungnam, interest has been growing regarding the progress of Samsung Group's next-generation battery business and the potential collaboration between the two major groups.

Vice Chairman Chung Eui-sun's Interest in Samsung's 'All-Solid-State Battery' Technology

This year, the meeting between Vice Chairmen Lee Jae-yong and Chung Eui-sun was called a 'historic event' in the business world. Samsung and Hyundai Motor, which have led South Korea's industrial development, have been considered 'eternal rivals.' Although their business areas did not completely overlap, they were always seen as competitors since the days of Samsung founder Lee Byung-chul and Hyundai Motor founder Chung Ju-yung. When Samsung Motor was launched in 1995, marking Samsung's entry into the automobile business, conflicts between Samsung and Hyundai Motor escalated to the extreme. Even after Samsung sold its automobile division, the tense relationship was not easily resolved. In 2014, Samsung and Hyundai Motor competed again in the bidding for the Korea Electric Power Corporation site in Samseong-dong, and Hyundai Motor only managed to win the bid by offering more than double the appraised value, conscious of Samsung.

However, the atmosphere changed significantly with the leadership of Vice Chairmen Lee Jae-yong and Chung Eui-sun. Not only is the relationship between the two leaders good, but in the era of global unlimited competition beyond borders and industries, domestic group rivalry has become meaningless. The leaders are focusing solely on future growth engines. Both leaders realize that in order to take the lead in next-generation business areas such as electric vehicles and autonomous driving, vertical integration alone, as in the past, cannot win in global competition. They frequently meet in official and private settings to share their future strategies and pursue 'open innovation' (a concept where companies procure necessary technologies and ideas externally while sharing internal resources externally to create new products or services).

Future car technologies such as batteries and autonomous driving are complex technologies that are difficult for any single company to develop independently, making collaboration essential. Since South Korea hosts various global companies, there has been ongoing discussion about the need to join hands for future growth engines. Especially after the meeting of the two leaders, it was confirmed that all-solid-state batteries are an important business that will secure Samsung's future growth. The all-solid-state battery is a next-generation battery called the 'dream battery.' This battery replaces the liquid electrolyte inside lithium-ion batteries with a solid one. Conventional batteries can explode if exposed to excessive heat or impact because the liquid electrolyte leaks, but all-solid-state batteries do not explode as they contain no flammable liquid inside. Additionally, all-solid-state batteries have no internal separator, allowing their size to be reduced to about half that of conventional batteries. They can be made thin and flexible.

Theoretically, electric vehicles equipped with all-solid-state batteries can travel over 700 km on a single charge. For this reason, not only battery manufacturers but also automakers such as Japan's Toyota and South Korea's Hyundai Motor are focusing on development in this field. Japan's Fuji Keizai Research Institute forecasts that the global all-solid-state battery market will reach approximately 28 trillion won by 2035.

Samsung SDI has set the commercialization target for all-solid-state batteries at 2027. Samsung SDI is concentrating on all-solid-state battery development together with Samsung Electronics' Advanced Institute of Technology. Since 2013, it has showcased all-solid-state battery technology at overseas motor shows and battery-related exhibitions. Vice Chairman Lee has shown great interest by visiting Samsung SDI's Cheonan plant to check on the technology development status. Industry insiders predict that if Samsung SDI succeeds in developing all-solid-state battery technology and commercializes it as planned, Samsung could instantly become the dominant player in the battery market. It is also analyzed that the possibility of collaboration with Hyundai Motor Group will increase further. Meanwhile, Samsung SDI is expected to explore various options such as mergers or investments from global automakers in the mid to long term to expand investment in the battery sector.

A battery industry official said, "Battery companies' financial structures are weakening due to large-scale investments, but facility investments cannot be stopped, so drastic measures are all necessary," adding, "These factors will bring significant changes to the governance structures of each group."