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• Overall First Half 2026 Performance

  • Cumulative H1 2026 revenue reached KRW 7.3 trillion, with operating profit of KRW 48 billion. The company returned to profitability one quarter earlier than the originally planned H2 2026 turnaround, driven by rapid revenue growth, improved segment profitability, favorable exchange rates, and tariff refunds.
  • Q2 2026 capital expenditure totaled KRW 503 billion, with total assets of KRW 47.6 trillion, total liabilities of KRW 20.8 trillion, and total equity of KRW 26.8 trillion as of quarter end.

• New Order and Customer Wins

  • Secured additional long-term orders for ESS and EV applications across U.S., European, and Korean production hubs, including a new project order from Mercedes-Benz that brings all three top German premium automotive brands into the company's customer base.
  • Won a next-generation distribution grid ESS project in Korea, laying a foundation to lead the domestic ESS market.
  • Won the first contract to apply cylindrical batteries to HEV applications, and signed a joint development agreement with major customers for humanoid and aerospace sector applications.
  • Began supplying high thermal conductivity EMC and other packaging materials to a new global customer, expanding the semiconductor materials business portfolio.

• H2 2026 Business Strategies by Segment

  • ESS: Establish a non-PFE compliant supply chain in the U.S., complete preparation for mass production of prismatic LFP batteries, expand UPS production capacity to meet growing AI data center demand, actively pursue domestic Korean projects, and prepare mass production plans for sodium-ion batteries for utility ESS and AI data center UPS applications.
  • EV Batteries: Expand supply of volume models that launched mass production in Q2 2026, and pursue new LFP battery orders leveraging European local production capabilities; strengthen collaboration with core customers in the slow U.S. market to secure future orders ahead of a projected recovery.
  • Small Batteries: Expand high-power cylindrical battery capacity, as current lines are already operating at full capacity to meet growing demand for BBU, power tool, humanoid, aerospace, and HEV products.
  • Electronic Materials: Expand sales of new semiconductor packaging materials and high-value foldable display film materials to meet growing demand from semiconductor miniaturization and new consumer electronics launches.

• The improving earnings trend from H1 2026 is expected to continue through H2 2026, with the company building on its early profitability turnaround to deliver sustainable revenue and profit growth.
  • ESS sales are expected to expand significantly in H2 2026, with solid profitability supported by ramp-up of new LFP lines and AMPC benefits. Cumulative 2026 UPS and BBU battery sales are projected to grow more than 70% Y-o-Y, with sustained higher profitability supported by high entry barriers and 40-50% market share in both segments.
  • Small battery profitability will see clear improvement in H2 2026, driven by full capacity utilization and higher sales of high-value products.
  • EV battery losses are expected to narrow in H2 2026 as new projects ramp up.
  • Electronic Materials sales will increase in H2 2026, led by foldable display materials, with stable profitability maintained.
  • Annual humanoid battery demand is projected to more than double every year through 2030; the aerospace battery market is expected to grow at a CAGR of more than 50% through 2030.
  • European EV penetration is projected to rise to the mid-20% range in 2026 and the high 30% range by 2030, with European EV battery demand growing at a CAGR of ~15% through 2030.
  • Mass production of all solid-state batteries remains on track to begin in H2 2027, with samples planned for customer delivery in H2 2026.

1. Battery Business: Revenue grew quarter-over-quarter (Q-o-Q) and year-over-year (Y-o-Y), driven by expanded sales of high-power products (UPS, BBU, power tool batteries) and European market EV batteries. The segment returned to operating profitability, supported by expanded sales of high-value products, AMPC benefits from U.S. local production, and U.S. reciprocal tariff refunds. It contributes the majority of Samsung SDI's total revenue. 2. Electronic Materials Business: Semiconductor material sales remained solid, and overall revenue and profitability improved, primarily driven by strong demand for film materials for foldable smartphones. The segment maintained solid profit margins and contributed to overall corporate earnings. In absolute terms, Samsung SDI's total Q2 2026 revenue was KRW 3.8 trillion (up 5% Q-o-Q, 19% Y-o-Y), and total operating income including tariff refunds was KRW 204 billion, marking the first profit in 7 quarters.

• Near-term demand slowdown will continue in the U.S. EV market following the elimination of consumer EV incentives and major OEMs recalibrating their EV strategies, with potential volume declines in existing EV battery projects.
  • A moderation in the pace of U.S. AI data center expansion could create minor headwinds, though management expects the impact to be limited given continued structural growth in broader U.S. ESS demand driven by renewable energy expansion and grid modernization.
  • Demand for ESS outpaces current planned capacity, with expected excess demand starting in 2028, requiring additional capacity investment to meet growing orders.

Q: Will the current earnings improvement continue into H2, and can you break this down by business? What is the status of U.S. LFP ESS mass production and non-PFE supply chain development? / A: Management confirms the earnings improvement trend will continue into H2. ESS will see significant sales growth and solid profitability; small batteries will see clear profit improvement from higher utilization; EV losses will narrow; Electronic Materials will see higher sales and stable profits. U.S. prismatic LFP ESS production is on track for cell launch in October 2026, with customer deliveries starting before year-end. A non-PFE compliant supply chain is complete, with LFP cathode volumes secured in advance from Korean and U.S. partners.

Q: Can you update U.S. ESS order intake and capacity plans, and what impact would an AI data center expansion slowdown have? / A: Order intake is very strong, with secured orders and probable pending orders covering most of the company's capacity through 2029, and demand expected to exceed capacity from 2028 onward; additional capacity plans are under review. Management expects any AI data center slowdown to have only limited impact, as structural growth from renewable energy expansion and grid stability requirements will sustain overall U.S. ESS demand growth.

Q: What growth opportunities does Samsung SDI see in semiconductor materials from AI data center expansion? / A: Strong chip capacity expansion for AI chips is driving sustained demand growth. New opportunities are emerging for patterning materials, hybrid bonding slurries for fab processes, and new packaging materials including redistribution layer materials and temporary bonding films. The company is developing customized solutions in partnership with customers to capitalize on these opportunities.

Q: What is the outlook for the European EV market, and are additional orders expected? / A: European EV sales are growing rapidly, with penetration rising to the mid-20% range in 2026 and demand growing at 15% CAGR through 2030. Growing local production requirements and OEM preference for prismatic batteries create strong order opportunities. Samsung SDI expects to secure additional new orders from European OEMs before the end of 2026.