[Featured Stock] Secondary Battery Component Stocks, the Only Domestic Can Manufacturer Alternative... Northvolt's 'Parts Shortage' Amid Continuous Expansion

[Asia Economy Reporter Park Hyungsoo] The stock price of Sangshin EDP is trending upward. The expectation that domestic CAN (a container that safely holds the contents of secondary batteries) parts will be used in secondary batteries produced by Northvolt, the only battery manufacturer in Europe, appears to have influenced the stock price.

As of 9:49 a.m. on the 1st, Sangshin EDP is trading at 15,800 KRW, up 3.27% from the previous day.

According to related industries, Northvolt initially intended to source prismatic battery metal cans from a Chinese company but was reportedly dissatisfied with the quality of the Chinese products. Considering switching to Korean battery parts as an alternative, Sangshin EDP's technological capabilities are gaining attention. Northvolt is continuing aggressive investment and expansion with full support from the European Union (EU). Its main products are prismatic and cylindrical batteries, that is, can case-type lithium-ion secondary batteries.

Sangshin EDP is a secondary battery parts manufacturer. It succeeded in domestic production of prismatic and cylindrical cans and ASS'Y (case caps) for mobile use, which were previously entirely imported from Japan, and has developed medium and large cans (for automobiles and ESS (Energy Storage Systems)) for mass production for electric vehicles. Its major client is Samsung SDI. Sangshin EDP holds over 90% of Samsung SDI's secondary battery can market share. In the first quarter of this year, it recorded sales of 42.1 billion KRW and operating profit of 4.9 billion KRW. Compared to the same period last year, sales increased by 53.8% and operating profit by 493.9%.

Northvolt initially planned to source battery cans from a Chinese company but, dissatisfied with the quality, is pushing to replace them with Korean parts. It is known that among the suppliers Northvolt is considering for can parts, domestic companies are included, raising expectations for parts manufacturers. Since the three domestic companies?Samsung SDI, LG Energy Solution, and SK Innovation?are leading the secondary battery market, the technology and reliability of parts manufacturers have been verified.

An industry insider familiar with the matter hinted, "Regarding can products, other companies are struggling to supply existing orders," adding, "Realistically, only a few companies are capable."

Northvolt aims to secure an annual production capacity of 150 gigawatt-hours by 2030, targeting a 25% share of the European battery market. Northvolt plans to raise $2.75 billion (about 3 trillion KRW) from a fund invested by Volkswagen, Goldman Sachs, and others, and invest this along with a total of $6.5 billion (about 7 trillion KRW) to expand the factory under construction in Skellefte?, Sweden. Production capacity will increase from the original target of 40 GWh to 60 GWh, enough for about 1 million electric vehicles. Batteries produced at this plant will be installed in ESS from the end of this year and in automobiles starting in 2023. Northvolt plans to build at least two more factories in Europe over the next 10 years.

Northvolt is collaborating with Volvo Cars to increase the energy density of battery cells supplied to the market by more than 50%. They aim to reach an energy density milestone of 1000 Wh/L and provide an actual driving range of 1000 km within the next 10 years.