--- title: "Korea" canonical: "https://anchor.is/the-hysteresis/issue/13/korea" publication: "The Hysteresis" publisher: "The Hysteresis" language: "en-US" guide: "https://anchor.is/the-hysteresis/llms.txt" permalink: "https://anchor.is/the-hysteresis/issue/13/korea" issue: 13 section: "korea" description: "LG, Samsung, SK — beyond the headlines" authors: ["Elise Huan-Cartwright"] published: 2026-09-07 updated: 2026-09-04 articles: 14 --- # The Hysteresis > The Hysteresis exists to give a small cross-functional team — strategy, investment, and procurement — a shared weekly instrument for reading the battery supply chain earlier than consensus. Success means the team consistently identifies inflection points in cell pricing, supplier health, and policy enforcement weeks or months before they surface in earnings calls, annual surveys, or trade press. The commercial mechanism is internal-first: the publication proves itself as a decision tool inside the organization, then extends to paid subscribers and a practitioner community as upside. Revenue follows utility — if the team makes better-timed procurement calls and competitive assessments because of what they read here, the publication earned its place. [Read on the website]() ## Issue 13 — Korea LG, Samsung, SK — beyond the headlines ### Convergence Dashboard All three Korean battery makers reported improved Q2 2026 results. LGES swung to KRW 113.3B operating profit. Samsung SDI's battery segment turned positive at KRW 159.3B. SK On posted KRW 821.8B in battery profit after quarters of losses. Convergence in direction, if not in magnitude. Whether this convergence supports a recovery reading depends on five questions. The profit compositions differ by maker and only one fully decomposes from public disclosures. Cash conversion lagged reported earnings where measurable. ESS shipments grew while EV installations contracted. The rate of underlying improvement accelerated at LGES but remains opaque at Samsung SDI and SK On. Each card below frames a question with a compressed answer; the full decomposition and cross-maker synthesis lives in the feature. - **Did All Three Improve for the Same Reason?** — [Source]() — Published 2026-09-04 Tag: Profit Drivers No. LGES disclosed KRW 241B in Q2 production incentives against KRW 113.3B operating profit; strip them and the result is -KRW 127.7B. Samsung SDI's battery profit included an unquantified tariff refund. SK On's KRW 821.8B bundled unquantified compensation and AMPC. Only LGES decomposes cleanly. - **Did the Improvement Reach Cash?** — [Source]() — Published 2026-09-04 Tag: Cash Conversion Partially at LGES, unclear elsewhere. LGES generated KRW 25B operating cash flow against KRW 1.33T EBITDA; a KRW 1.185T working-capital outflow absorbed the gap. Samsung SDI's cash fell from KRW 1.738T to KRW 1.506T despite positive reported profit. SK On's battery-segment cash flow is undisclosed. - **Did ESS Drive the Improvement?** — [Source]() — Published 2026-09-04 Tag: Demand Mix ESS grew sharply but EV contracted. Per SNE Research, LGES ESS shipments hit 12.0 GWh in H1 2026, up 357% YoY. Samsung SDI shipped 6.4 GWh, up 20% but losing global share. Combined Korean non-China EV installations fell 6.3% to 74.3 GWh. The two segments offset. - **Is the Rate of Improvement Accelerating?** — [Source]() — Published 2026-09-04 Tag: Second Derivative At LGES, yes: ex-incentive operating loss narrowed by KRW 269.9B QoQ in Q2, up from KRW 57.4B improvement in Q1. Samsung SDI's battery-segment AMPC allocation remains undisclosed. SK On's KRW 1.17T QoQ swing includes unquantified compensation. A second-derivative read requires decomposable data; two of three makers don't provide it. - **What Would Confirm or Falsify Recovery?** — [Source]() — Published 2026-09-04 Tag: Proof Points LGES: Lansing LFP ESS yield data and first customer-accepted lots. Samsung SDI: October StarPlus LFP cell production start, per Q2 earnings call guidance. SK On: Flatiron 1 GWh H2 delivery target and Q3 earnings as normalization test after compensation-inflated Q2. - **Can These Three Makers Be Ranked?** — [Source]() — Published 2026-09-04 Tag: Data Gaps Not on the metrics that matter. No maker disclosed quantitative cell ASP in Q2 English-language materials. Utilization definitions are incompatible: LGES reports 52.8% on broad manufacturing, Samsung SDI 73% on small batteries only, SK On 36.4% on load hours. Cross-maker ranking on either metric is unsupportable. ### Q2 Earnings Decomposition - [Korean Q2 2026 — Three Improved Quarters, Three Separate Explanations]() — By [Elise Huan-Cartwright]() · Published 2026-09-04 · Format: The Earnings Decomposition LGES, Samsung SDI, and SK On all reported improved Q2 results, which invites the market-turn read. The disclosures don't support it. LGES narrowed its ex-incentive loss by KRW 270B and converted only KRW 25B of cash against KRW 113.3B of reported profit. Samsung SDI beat its own profitability timeline while leaving AMPC and tariff refunds unallocated to the battery segment. SK On swung KRW 1.17T QoQ on three named drivers, none of them sized. Both companies disclosing cash flow converted under 10% of reported operating profit to cash. ### The EV Volume Story - [Korean Makers Lost 26 GWh of EV Share in H1 — ESS Replaced Less Than Half]() — By [Elise Huan-Cartwright]() · Published 2026-09-04 The non-China EV battery market grew 26.3% in H1 2026 to 269.0 GWh ([SNE Research](https://sneresearch.com/en/insight/release_view/709/page/0)). Korean makers' combined installations fell 6.3% to 74.3 GWh, compressing share from 37.2% to 27.6%. At prior-year share they would have shipped roughly 100 GWh. The approximately 26 GWh gap went to Chinese suppliers — CATL alone installed [90.5 GWh outside China](https://cnevpost.com/2026/08/07/global-ev-battery-market-share-h1-2026/), exceeding the Korean three combined. ### Consensus Reads - **Q2 Profit Headlines vs. the 45X Decomposition: One-Offs Did the Heavy Lifting** — [Source]() — Published 2026-09-04 Subsidies, tax refunds, and JV restructuring drove most of the reported profit swing across all three makers. - **The Consensus Frame: "Chasm Erased" — ESS and Europe Ended the Downcycle** — [Source]() — Published 2026-09-04 Seoul press declares the trough over. This is the narrative the 45X strip and utilization data test. - **Samsung SDI's LFP Execution Gets Its First Verifiable Signal: Third StarPlus Line Confirmed** — [Source]() — Published 2026-09-04 Equipment orders place a third LFP line at StarPlus; multi-GWh BESS integrator deal expected Q4. - **Upstream Still Bleeding: 10 of 17 Major Materials Firms Posted Losses in Q2** — [Source]() — Published 2026-09-04 Separator and copper foil makers all unprofitable. Cell-maker margin recovery hasn't reached the supply chain. - **Korean Share Erosion Continues: Samsung SDI Falls Out of Global Top 10 in H1** — [Source]() — Published 2026-09-04 Global EV battery usage up 20% H1 YoY, but Chinese makers took 72.4% share. Korean firms lost ground. - **US BEV Sales Down 24.7% in H1 — The Demand Denominator Behind SK On's JV Restructuring** — [Source]() — Published 2026-09-04 EV share fell to 7% of US new car sales. Ford's EV losses map directly to BlueOval SK capacity decisions. ## Other sections in Issue 13 - [Signal]() - [China]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()