It is no secret that Samsung Electronics, maker of the Galaxy Note 7, lost a huge amount of money and goodwill last year with the exploding battery fiasco, brought on by defective batteries supplied from Samsung’s SDI division. The two have been in ongoing talks to discuss the amount of compensation that the SDI group should payback to Samsung Electronics to help cover their losses. Samsung SDI is claiming the defective Galaxy Note 7 batteries have already contributed to their operating loss of $826.90 million – some caused by the Galaxy Note 7 problem and others resulting from slow sales of automotive batteries. Because of this, Samsung SDI is asking for a reduction in the amount of compensation they must pay back to Samsung Electronics. Although ‘sister’ companies, each is run as an independent unit, each with their own profits and losses. Samsung Electronics does not want their division to look bad because of a mistake caused by Samsung SDI.
Samsung SDI has set aside about 95 billion won toward the settlement for its faulty batteries and is hoping that Samsung Electronics will settle for that amount – and it is likely that they may be willing to settle since it is another Samsung company. There were no comments from either side as this is an ongoing negotiation, but we do know that Samsung SDI supplied about 70-percent of the batteries in the Galaxy Note 7 while China's ATL provided the remainder. Tensions cannot be too high as it is the SDI division that was chosen to supply the batteries for the upcoming Galaxy S8 and Galaxy S8 Plus that will debut on March 29. It is also a rumor that China’s ATL is being replaced with Japan’s Murata Manufacturing as the backup battery supplier for the Galaxy S8 series. Hopefully, the talks will resume so that both companies can put the Galaxy Note 7 incident behind them and move forward.
Samsung had a rough 2016 with their flagship Galaxy Note 7, which ended up with two recalls, with the second one a final recall and Samsung just scrubbed the entire model for the year. Immediately the rumor mills started that there would be no more Galaxy Note's, but fortunately, Samsung has assured us there will be a new Galaxy Note 8 later this year. Samsung began a new advertising campaign that resurrected the Galaxy S7 and Galaxy S7 Edge, with the model selling well all year, helping to sustain Samsung through their Galaxy Note 7 losses. Everybody's eyes are now focused on March 29 as Samsung unveils their new Galaxy S8 and Galaxy S8 Plus models with new and improved batteries.