To begin new production line

Aug 21, 2023

The author is an analyst for NH Investment & Securities. He can be reached at [email protected] -- Ed.

Having weathered a delay, Samyoung’s new production line for capacitor films is about to come online. Upon mass-production of capacitor films for EVs, sales mix improvement should lead to full-fledged earnings growth. Accordingly, we advise keeping tabs on Samyoung in 2H23.

New production line for capacitor films to come online

Samyoung is the only domestic manufacturer capable of mass-producing capacitor films. In a global capacitor film market dominated by only a handful of companies, Samyoung stands as the third-largest player, with a market share of around 10%. Its ASP for capacitor films has been on a steady rise, climbing from W4,056/kg in 2020 to W5,725/kg in 2022, and then to W5,842/kg in 1H23.

After having been delayed since June due to a change in machine operation method (mechanical → electronic), operation of Samyoung’s new production line for capacitor films is set to kick off in earnest. In line, its production capacity is set to expand from 530 tons/month to 930 tons/month. Full-fledged operation of the new line is to start after construction completion in mid-September, with related earnings to be reflected from 4Q23.

Testing of capacitor films for EVs well underway

Samyoung’s development and testing of EV capacitor films is progressing smoothly. Having completed development of an EV capacitor film with thickness lower than 2.3μm, the firm is currently testing it with auto makers. Supply of the product to North American and European finished carmakers is to begin from as early as end-2023, and supply to a domestic finished car company should begin in full force from 2024. Noting that EV capacitor films (mid-W20m/ton for 2.3μm film, mid-W10mn/ton for 3.5μm film) fetch much higher prices than those for general capacitor films (W5mn~6mn/ton), we expect Samyoung’s product mix to improve significantly once it starts mass production of EV capacitor films.