Profitable battery, solar cell biz key behind acquisition of Sanyo

by Reiji Yoshida

What does Panasonic Corp., already one of the most powerful and profitable electronics companies in the world, want with Sanyo Electric Co., a company just one-fourth its size in terms of revenues?

Better power supplies.

Sanyo is the world’s top producer of lithium-ion batteries, the key component in almost all electronic products needing small, durable and efficient power sources. The products being developed in this exploding market are needed to power everything from cell phones, digital cameras and notebook computers to hybrid automobiles.

According to an estimate by the Japan Economic Center, a marketing research firm, the global market for lithium-ion batteries will grow 12 percent this year to 2.68 billion units from the previous year. In 2013, it will exceed 4.3 billion units and generate more than ¥1 trillion in sales. A unit comprises a battery cell that produces 3.7 volts.

Sanyo predicts that by 2020, one in every 20 automobiles in the world will be either hybrid gasoline-electric vehicles or electric vehicles. It is thus expanding its capacity to produce lithium-ion batteries for HEVs to 10 million units a month by 2015, and aims to capture 40 percent of the global market for this type of power source.

Another environmental technology Sanyo has that Panasonic doesn’t is solar cells.

Panasonic withdrew from the solar battery business in 2000, effectively terminating the production of solar cells. But the global market has been growing rapidly and is predicted to grow even faster after the cells become a key device used by a new generation of energy- and environment-conscious global citizens.

According to an estimate by marketing firm Fuji Keizai Co., the global market for solar cell modules was worth ¥1.2 trillion in 2007 but is predicted to nearly quadruple to ¥4.67 trillion by 2012.

Sanyo, whose solar cells for houses boast the world’s biggest electricity generation per area, is now the world’s seventh-largest producer of solar cells, with a global market share of 4.4 percent.