TrendForce: Tablet PC Popularity Ups Lithium-ion Polymer Battery Inventory Levels, Cell Price Increases By Over 5% in 2Q11

18 Jul

With the rising popularity of ultra-light, ultra-thin consumer electronics, lithium-ion polymer batteries have become a focus of the market in 2011. According to TrendForce research division EnergyTrend, as a result of Japanese and Korean manufacturers’ limited supply capacity, li-poly battery cell price has increased by over 5% in the second quarter of 2011. Taiwanese battery pack manufacturers’ average shipment volume has seen over 30% growth, an indication of the high demand in the li-poly domain.

In the past, li-poly battery application was limited to Apple’s mid-to-high end products. However, with the increasing appeal of products like the iPad, other brands have begun to use li-poly batteries as well. EnergyTrend predicts that battery cell price has room for at least 10% growth in 2011, a rare opportunity for the battery industry.

In addition to the already popular Apple iPad 2, devices soon to hit the market such as the next-generation MacBook Air and new Android OS tablets all emphasize light, thin form factor and long battery life. As such, slim li-poly batteries are a necessity and manufacturers have ramped up their shipment volume. As consumers’ dependence on (and addiction to) light and thin notebooks and tablets grows with each passing day, so does their acceptance of li-poly batteries.


Li-ion vs. Li-poly: Unequal Supply and Demand

Cylindrical lithium-ion batteries are expected to be in a state of worldwide 5-10% oversupply in 2011. Conversely, lithium-ion polymer battery usage has increased as a result of greater demand for tablets and ultra-thin notebooks. In terms of both unit price and supply and demand, it is clearly a seller’s market.


New Devices Create Flourishing Prospects for Battery Industry in 2Q11


Starting in March 2011, new tablet PCs have continually been released, resulting in a steady increase of li-poly battery inventory levels. According to EnergyTrend, battery pack manufacturers’ shipment volume increased 25-50% in 2Q11. In other words, manufacturers are all nearing full capacity utilization (Fig. 2).


Component Cost Analysis Breakdown


In terms of unit price, li-poly batteries cost about as much as traditional laptop batteries. However, li-poly battery cells are more expensive than traditional cells, representing over 70% of total unit cost (Fig. 3), while housing takes second place with more than 10% of cost. The remaining cost is attributed to the IC and carrier board.


In conclusion, beginning in 2Q11 EnergyTrend predicts the following trends in the lithium-ion polymer battery industry based on market supply and demand factors:

1.       Li-poly batteries have become a necessity with the abundance of new tablet PCs that began hitting the market in March 2011. As a result, manufacturers aggressively increased their inventory in 2Q11, and seller advantage in the battery cell market is likely to continue until 3Q11.

2.       While unit price for li-poly batteries and cylindrical li-ion batteries is similar, li-poly cells make up a greater percentage of total cost, and customization is common. If supply capacity is unable to meet continued demand growth, lithium-ion polymer battery price is sure to increase again.

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