Domestic separator manufacturing corporations are significantly increasing their production capacity through expansions in Europe, while showing caution in entering the North American market. Existing factory utilization rates have decreased due to weakening demand, and the timing for new plant operations is being postponed, leading to greater investment burdens. The anticipated removal of electric vehicle subsidies under the incoming second term of the Donald Trump administration is also raising uncertainties about investment decisions.
According to industry sources on the 16th, SK ie technology plans to operate its second factory in Poland, with an annual scale of 340 million square meters, starting from mid-year and aims to complete a total expansion of its third and fourth factories, reaching 860 million square meters, by the end of the year. SK ie technology currently operates factories in Cheongju, South Korea, with a scale of 520 million square meters, and in Changzhou, Jiangsu Province, China, with a scale of 680 million square meters. In Poland, only the first factory, with a scale of 340 million square meters, is currently in operation. The current capacity stands at 1.54 billion square meters, which will increase by approximately 78% to 2.74 billion square meters starting next year.
WCP also plans to complete the expansion of its factory in Hungary, with a size of 1.24 billion square meters, by next year. WCP is currently operating a factory in Chungju, South Korea, with a size of 820 million square meters, and is also pursuing an expansion of 310 million square meters there. Once the planned domestic and international expansions are completed, production capacity will nearly double to 2.37 billion square meters.
The domestic separator industry had stated last year that it would make a final decision regarding its entry into the North American market following the U.S. presidential election. However, as the demand in the electric vehicle and battery sectors declines, leading to worsening market conditions and losses, the burden for new investments is increasing.
SK ie technology reported an operating loss of 200 billion won for the cumulative first to third quarters last year, and in the third quarter, the utilization rate of major factories fell to 20-30%. WCP had previously planned to commence operations of the seventh line in Cheongju, South Korea, in the second quarter of this year, and begin operations at its factory in Hungary, Europe, in the first quarter of 2026. However, with worsening market conditions, both dates have been postponed to the first quarter of 2026 and the first quarter of 2027, respectively.
Uncertainties regarding U.S. policies are also causing hesitation in investments. According to the current Inflation Reduction Act (IRA), U.S. electric vehicle consumers can receive a maximum subsidy of $7,500 (approximately 11 million won) for their purchases, but only if a certain percentage of the battery components are manufactured in the U.S. The separator process can be largely divided into a forming process that shapes raw materials like polyethylene (PE) into sheets and a coating process that coats the sheets. Only having the coating process set up in North America can meet the IRA's subsidy requirements.
However, the incoming second term of the Trump administration, which will launch on the 20th, is considering amendments or the repeal of the IRA Section 30D related to electric vehicle consumer subsidies. In this case, the significance of investing heavily in new factories in North America would diminish.
According to market research firm SNE Research, the global secondary battery separator market is expected to grow to 59.9 billion square meters by 2035, but the industry believes it could expand to 99.5 billion square meters. SNE Research noted, "Leading global separator manufacturer Changshin Materials (SEMCORP), along with Chinese manufacturers, is aggressively pushing for expansion, which may later exacerbate oversupply issues."