TOKYO -- Japanese chemical company Asahi Kasei will increase its output of separators used in lithium ion batteries by 30%, hoping to meet rising demand for electric vehicles as emissions and fuel efficiency standards become stricter worldwide.
By 2019, Asahi Kasei will spend from 11 billion yen to 19 billion yen ($99 million to $171.1 million) to bolster production; the decision may have come after getting large orders from U.S. electric-vehicle maker Tesla and other companies. Separators prevent batteries from overheating or catching fire. Battery demand is growing for cars, as well as for devices like personal computers and smartphones.
Asahi Kasei is a top manufacturer of separators, with 50% of the world's market share. The chemical company has production sites in Japan's Shiga and Miyazaki prefectures, as well as in the U.S. and South Korea. It will boost yearly production capacity by roughly 200 million sq. meters to 800 million sq. meters at its Moriyama factory in Shiga Prefecture.
There are "growing requests to increase safety" of electronic devices, the company says, especially after South Korea-based Samsung Electronics' Galaxy Note 7 smartphone was recalled for catching fire. Separators have since been under the spotlight as a core component that greatly influences safety. Such trends will "serve as a tailwind" for the company, even as Asahi Kasei faces stronger competition from Chinese and South Korean rivals.
Private research firm Fuji Keizai projects the world's market for separators to almost double from 2015 figures to 30 billion yen by 2020, with help from growing demand for vehicles that use batteries such as EVs and hybrids. Furthermore, separators for cars may account for 45% of the total by 2020, as the world's EV market is estimated to climb to around 2.5 million cars by 2025.