ST. PAUL, MN (JULY 14, 2017)—The Power Systems Research Truck Production Index (PSR-TPI) increased from 100 to 114, or 14%, for the three-month period ended June 30, 2017, from Q1 2017. The year-over-year (Q2 2016 to Q2 2017) gain for the PSR-TPI was, 111 to 114, or 2.7%.
The economic relationship between China and the ROK has reached a turning point. According to statistics from the ROK, for the first time in 28 years, the ROK has a trade deficit with China. China has been the best customer of the export driven ROK economy, and this is causing concern in the ROK. At the same time, Chinese companies are intensifying their takeover of Korean companies, and in response to the escalation of the U.S.-China conflict, they have begun to pursue a strategy of using Korea as a foothold to capture the U.S. market.
A management official at South Korea’s Hyundai Motor’s joint venture plant in Chongqing, China, said that the passenger car assembly plant is idle and that negotiations are underway to sell it to a Chinese company. Hyundai Motor started operations in Chongqing in 2017, including an assembly plant with an annual production capacity of 300,000 units, but sales slumped due to the rise of Chinese automakers. At one point, the company occupied second place with a market share of nearly 10%, but recently it has fallen below 2% and slumped to 10th place.
SUMMARY: Gen-set sales climbed 5% over Q1 2018 levels in anticipation of the camping season and end of fiscal year for many government and industrial consumers. While fewer dealers commented on specific-storm related residential demand this quarter, the 5% growth this quarter does seem to indicate that last year’s hurricanes may have raised the gen-set market up to a new normal, especially when compared to the 1.8% growth reported in Q2 of 2017.
China and South Korea are increasing their investments in Indonesia. According to BKPM (Indonesia’s Investment Coordination Agency), China (including Hong Kong) accounted for $8.4 billion in foreign direct investment (FDI) in 2020, up 11% from the previous year, and South Korea accounted for $1.8 billion, up 64%.
Japan, which has been the driving force behind investment to date, has seen a clear decline of 40% to $2.6 billion. Singapore ranked first in FDI in 2020 with $9.8 billion, followed by China and Japan in second and third place, then the European Union in fourth place, and South Korea in fifth place.
LG Chem says it will build a cathode material plant for automotive battery materials in Gumi, central South Korea. LG Chem has the second largest automotive battery business in the world. They will continue to invest in increasing production in the materials field to meet the increasing demand and plans to start mass production by 2025 and will build a dedicated line for cathode materials with high nickel content, called NCMA, which can increase the output of batteries.
LG Chem’s new plant will be its fourth; it has two cathode material plants in operation in Korea and one in China. The current production capacity is 80,000 tons. LG Chemical produces its own cathode materials, separation membranes, and adhesives, and supplies them to LG Energy Solution, its battery subsidiary. LG Chem is working with Toray Industries, Inc. to secure the amount of separation membrane to be procured.
In the August edition of the Economic Trend Report (Green Book), the Korean Ministry of Planning and Finance defined the recent Korean economy this way: “production has increased moderately but exports and investments continue to be sluggish”.
Korean materials giants are rushing to increase production of battery materials for EVs. Lotte Chemical plans to invest 160 billion yen to build plants for electrolytes and other materials in Korea and the U.S. LG Chem and POSCO have also announced plans to increase production. The three major Korean battery manufacturers, including LG, have active investment plans, but they are lagging their Chinese counterparts in the upstream area of battery materials. Materials companies are also increasing their supply capacity to compete with the Chinese.
Lotte Chemical, a major petrochemical company, will build a new plant for organic solvents for electrolytes in its own plant. The company will build a new factory with a total investment of 602 billion won, aiming for production by the end of 2023. The company is also considering building a plant related to electrolyte and cathode materials in Louisiana, U.S. It has begun coordination with local governments and other related parties in anticipation of starting production in 2025. The investment is expected to be in the order of 100 billion yen.
The South Korean government announced a plan for a semiconductor industrial park in which Samsung Electronics and SK Hynix will invest a total of 622 trillion won (approx. $470 Billion). With Japan and Taiwan aggressively investing in the semiconductor industry, the government aims to compete with them by establishing the world’s largest base and stabilizing the supply of semiconductors to Korea.
According to the plan announced by the government, Samsung Electronics and SK Hynix plan to invest 500 trillion won and 122 trillion won, respectively, by 2047. In addition to the existing 21 factories, 13 new semiconductor factories and 3 research facilities will be built. The semiconductor industrial park, which stretches from Pyeongtaek to Yongming, is expected to become the world’s largest manufacturing base with a monthly production capacity of 7.7 million wafers by 2030.
Doosan Infracore says it has signed an MOU with Unity Technologies Korea for mutual cooperation in the development of a construction process simulator.
This is the first joint project with a game engine developer in the construction equipment industry, which is rare in the global construction equipment industry.
The game engine is regarded as very useful in various industries such as shipbuilding, logistics and construction. Doosan Infracore and Unity will work together to develop a simulator. It realizes various physical elements on a construction site where excavators and other equipment operate in a virtual environment. The simulator will be very useful in accurately predicting complex variables that may occur on a real construction site.
South Korean automotive battery giants are moving into the U.S. market, with SK Innovation teaming up with Ford and LG Chemical with GM to promote the construction of an automotive battery plant. SK plans to invest about 300 billion yen in the plant to produce 22 gigawatt-hours of automotive batteries, enough to power 220,000 EVs a year, and in a joint venture with Ford, the two companies will invest 600 billion yen to build a giant 60-gigawatt plant.
SK’s annual production capacity as of 2019 is only 5 gigabytes at its Korean plant. The capacity is expected to increase to 30 gigawatts in 2020 with the launch of plants in China and Hungary, to 85 gigawatts in 2023 with the addition of the US plant, and to exceed 185 gigawatts in 2025 with the addition of the joint venture with Ford. SK, a late entrant to the market, ranks sixth with a 5% share of the global market in 2020.
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