Business | September 10, 2012
Battery market remains oversupplied
It is most certain that 3Q12 will be a slow season for cylindrical battery, according to market researcher TrendForce. Propelled by notebook sales for 2Q12, demand for related components including battery saw a surge.
However, sales for 3Q12 fell short of expectations, and growth momentum for cylindrical battery have come to a halt. The capacity reduction took place in late 2011 was unable to deal with the weakened demand. As a result, cylindrical battery market is likely to remain oversupplied in 2012. Duff Lu, Research Manager of TrendForce, notes that September and October were usually the peak shipping period to stock up for the coming Christmas holiday in the U.S. and Europe. However, considering the fact that most new products to be released in 4Q12 are equipped with polymer batteries, the stagnant notebook demand for 3Q12 put cylindrical battery market in a slump during July and August, and the situation is not getting any better in September. As for polymer battery, according to EnergyTrend’s research, following the climbing tablet PC demand in June and July, polymer battery shipments saw a growth, but the growth momentum did not persist into August. Although some new products with high electricity consumption hit the market, their weak sales did not contribute to polymer battery shipment. Polymer battery price dipped in August as shipments decreased.Polymer battery market has been headed toward undersupply as notebook system battery capacity increases and end users’ preference for lighter products. For this reason, several battery makers have expanded their production in 2012. On the other hand, since tablet PC’s demand for polymer battery is lower than that of notebook, the sufficient inventory left from earlier procurement weakened polymer battery demand in August. Polymer battery is usually custom-made – the more the orders, the lower the price. Therefore, even thought polymer battery has seen a modest price drop, the price may become less friendly if the demand keeps dropping, which will affect the manufacturers’ inclination to use it. TrendForce believes before low-priced square battery hit wide adoption, polymer battery needs to strike a balance between custom-made orders and standard orders in order to cater to end users’ preferences for lighter and cheaper products. As long as the system design concept remains unchanged, polymer battery will remain more of a niche market product with limited market share.
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