Lotte Energy Materials shares were strong in early trading on the 6th. Buying appears to be gathering on expectations for future growth after a business overhaul centered on circuit foil (copper foil used to make circuit boards), according to securities analysts.
As of 10 a.m. that day on the Korea Exchange, Lotte Energy Materials was trading at 46,800 won, up 6,350 won (15.7%) from the previous session.
Securities houses said that Lotte Energy Materials has entered a new growth phase as it reorganized its business around circuit foil.
Kim Myeong-ju, a researcher at Shinhan Investment & Securities, estimated that this year Lotte Energy Materials' circuit-foil revenue will reach 147 billion won, with sales volume of 4,680 tons (t).
On this, Kim said, "Factory utilization is expected to improve due to increased power demand from U.S. artificial intelligence (AI) data centers and higher shipments in the energy storage system (ESS) sector driven by the expansion of renewable energy," adding, "As shipments of battery foil (copper foil for batteries) in the ESS sector and circuit foil both increase, the company is projected to return to the black next year."
Battery foil is used as an anode material in lithium-ion batteries and serves as a pathway for current. Circuit foil is used to form circuits on circuit boards that go into AI accelerators, TVs and smartphones.
According to Kim, Lotte Energy Materials' circuit-foil production capacity is expected to increase from 6,700 tons this year to 16,000 tons next year. Circuit foil for AI substrates carries processing costs more than three times higher than battery foil.
Regarding this, Kim said, "Circuit foil will be the winning pitcher that can lift margins through a better product mix, not just higher volumes."
The sulfide-based solid electrolyte business was also cited as a next-generation growth engine. Solid electrolytes are a key material for solid-state batteries, and the solid-state battery market is expected to grow at an average annual rate of 32% through 2035.
Kim said, "Our goal is to build a 1 gigawatt-hour (GWh) solid electrolyte line for solid-state batteries by 2028, with capacity for 13,000 electric vehicles and 300,000 humanoids," adding, "In the mid to long term, it will serve as a factor to raise valuation and is expected to lead to a corporate value re-rating."