Samsung battery affiliate struggles to reassure new clients of product safety

Samsung SDI lost nearly a fifth of its market value due to Galaxy Note 7 battery disaster
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Samsung Electronics affiliate, Samsung SDI has been attempting to reassure anxious clients in the wake of the Galaxy Note 7 battery disaster, but potential new customers may prove harder to convince, according to a report from Reuters.

Samsung SDI was the sole supplier of Galaxy Note 7 batteries and has since stated that this was an isolated incident. The episode cost the company almost a fifth of its market value, and an operating loss during its third quarter that was more than double that of a year earlier. 

Kim Hong-gyeong, chief financial officer at SDI said: “We put the utmost priority on battery reliability, and will use this opportunity to further enhance customers’ trust.” 

Samsung Electronics was quick to blame the battery, but after replacement phones using batteries from China’s Amperex Technology also caught fire it would seem that the battery was not the problem. An investigation is currently ongoing, but analysts say that even though the battery maker was likely not at fault, the damage has already been done.

S.R. Kwon, of Dongbu Securities, said: “This will have more of an impact on new customers than on existing customers.

“SDI can assure existing customers, but this could be a minus factor for SDI when it tries to attract new customers.”

An anonymous SDI employee who was a part of the development of the Galaxy Note 7 batteries said: “Since the first recall, we've had many inquiries from our clients, including Apple, asking whether batteries used in their products are safe.

“We are also asking ourselves whether we should have done this another way.”

A second employee described the issue as “very embarrassing” for SDI. “We thought we had control, but it turned out there were some aspects we weren’t able to govern.”

According to the SDI insiders, the company had to incorporate new materials and technology to meet Samsung’s requirement of a bigger battery capacity in the note 7. "We focused on boosting battery capacity, but this could have been disadvantageous to reliability," said the engineer who worked on the Note 7 battery.

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