Emerging Mini-Note PC Market to be Impacted More Severely Than the Traditional Notebook PC Market by Recent Fires at Two Top 5 Battery Manufacturers
May 1st, 2008By DisplaySearch Desktop Monitor and Notebook PCs Teams
On September 30, 2007, the third floor of Matsushita’s Moriguchi Plant, where the “Charge/Discharge” process takes place (the final process before packaging) was shut down due to major fire damage. The fire department did not allow access to the floor for one month after the fire due to safety and other concerns. Our information is that Matsushita lost more than 50% of their capacity.
On March 3, 2008, a fire broke out at LG Chemical’s battery factory in Ochang, South Korea. Preliminary indications are that LG Chemical lost 50% of their production capacity and will simply close the building and build a brand new facility.
Figure 1 Li-ion Cell Shipment Share for Notebook PCs
|
Rank |
OEM/ODM |
Estimated Share |
|
1 |
Sanyo |
21% |
|
2 |
Sony |
14% |
|
3 |
Samsung SDI |
13% |
|
4 |
Matsushita |
9% |
|
5 |
LG Chemical |
8% |
|
6 |
Others |
35% |
Recovery
- Matsushita is expected to be almost fully recovered at this time.
- LG Chemical has stated that it will take about three months from March 3, 2008 for them to fully recover.
Response
- Sanyo, Samsung SDI and Sony are all reported to be increasing capacity both in response to the fires and as a part of the natural course of business as demand for LiOn batteries (which are used in almost all portable electronic devices from cell phones to media players to notebook PCs) continues to grow at a substantial pace.
Impacts
- Notebook PC market—According to our information, most notebook PCs use 2400mAh to 2600mAh cells. The Matsushita factory manufactured 2700mAh to 2900mAh cells, and the LG Chem plant manufactured 2200mAh cells. Therefore, we do not see a sizable impact to the notebook PC market.
- Mini-Note PC (e.g., Asus EeePC, Everex Cloudbook and HP Mini-Note PC-type market)—Our analysis indicates that Mini-Note PC products, those that use displays from 7.0” to 8.9” use 2200mAh cells and these products could face significant shortages in the near term just as sales of these products are beginning to grow at a substantial pace. There are some industry rumors that some of the brands selling these products are looking to battery manufacturers in China for support.
Outlook for 2008
- At this time, DisplaySearch is not reducing our Notebook PC (as defined by products with 10” and larger displays) forecast. It is our analysis that although supply may be tight, the battery industry will be able to meet demand this year. All the major battery cell makers had plans in place to increase capacity to meet a growing market. Matsushita is almost fully recovered. LG Chemical’s loss represents ~4% of total battery supply (based on 2007 data).
- Due to the types of cells that were being made at LG Chem, we think there is the potential for shortages of cells for the Mini-Note PC market. However, none of the brands making these products have indicated that they are experiencing and shortages of batteries at this time.
We will be closely watching both the Notebook PC and Mini-Note PC markets for any signs indicating battery supply constraints.
