TDK Corp. is receiving a lot of interest from people in Asia about a new range of smartphone batteries that it believes will revolutionize the industry’s efforts to fit more power into ever-smaller gadgets.
According to TDK Chief Executive Officer Noboru Saito, the supplier to Apple Inc. is the first to apply a technological breakthrough to smartphones that its competitors have been investigating primarily as a way to extend the range of electric vehicles.
The company started shipping small-size lithium-ion batteries made with silicon electrodes made by its subsidiary Amperex Technology Ltd. (ATL), based in Hong Kong, in the first half of 2023.
The competition to improve energy storage, the industry’s holy grail, has several well-known participants, including TDK, the biggest manufacturer of smartphone batteries worldwide.
Regarding consumer goods, its competitors are approaching things differently. LG Energy Solution and Samsung SDI Co. are stacking materials to create batteries that are more energy densely packed into smaller spaces.
Additional choices range from solid-state batteries and graphene-based cells to sodium-ion batteries and hydrogen fuel cells.
According to Saito, the company will need to continue pursuing know-how if it wants to maintain its lead in the competitive smartphone market, where TDK holds a majority stake in the battery market.
In an interview, the 57-year-old stated, “We need to develop the next, followed by the next, technology to differentiate ourselves and keep our lead from shrinking.” We also need to assume that other companies will enter this space. “There’s still room for technological advancement.”
Nowadays, TDK is the only company that mass produces silicon-carbon batteries for use in smartphones.
Because the high-capacity batteries enable ultra-thin devices and unique designs, handset makers are particularly interested in gaining a competitive advantage in a crowded market.
According to analysts, the Magic V2, the newest foldable smartphone from Shenzhen-based Honor Device Co., is one example. It is less than 10mm thick.
TDK said that it does not reveal the names of any of its clients when asked to comment.
Honor competes with Huawei Technologies Co., Oppo Co., and Xiaomi Corp. in China and throughout Asia. According to Honor’s website, their phone has a silicon-carbon dual battery.
On its suppliers, it opted not to comment.
Although industry studies suggest the technology has the potential to increase capacity by 40% or more, TDK claims that its new battery has 10% more capacity than traditional graphite anode batteries.
According to Toyo Securities analyst Hideki Yasuda, the product should be able to reduce the size of devices while increasing battery life in a wider range of devices, such as wearables, mobile gaming gadgets, and edge tools related to artificial intelligence.
High-end batteries provide TDK with one way to attain sustainable growth in a commoditized product.
More than half of TDK’s yearly revenue comes from the battery business, and the majority of its largest clients are smartphone manufacturers.
TDK stated in recent earnings calls that the growth in smartphone batteries has been flat, raising concerns about the possibility that the clients’ paper-thin margins are slowing growth.
According to Saito, in the coming years, the new products should account for a double-digit portion of the company’s total volume of smartphone battery sales, up from the current less than 5%.
The Robin Zeng-founded ATL was purchased by TDK in 2005, and after that, it increased its production into the smartphone market, winning over major customers like Apple and Samsung Electronics Co.
ATL’s fledgling EV battery business was spun out in 2011 into Contemporary Amperex Technology Co., based in Hong Kong. ATL currently has two joint ventures with this company to produce rechargeable batteries and battery cells for motorcycles, industrial machinery, and home energy storage.
“I disagree that our battery sales are going to gradually decline, despite what some may say. Even in the long run, I can assure you that batteries will remain a significant and sustainable component of the group’s product line,” Saito stated.
“The demands on batteries will only increase as we move into the AI era, when the world becomes more interconnected. It is our goal to meet those needs through new and evolving technology.”
