After selling 2.5 million Galaxy Note 7 phablets in just two weeks, Samsung has issued a worldwide recall and temporary hold on sales because of battery overheating issues and danger of explosion.
Since two-thirds of those batteries are manufactured by Samsung SDI, a supplier to many of the top brands of portable computing devices, this development could disrupt the supply chain for new devices for the rest of the year. Samsung SDI is one of the suppliers listed by Apple in their 2016 Supplier List, published in February.
“Today, with the context and reality of globalization, organizations are finding that the supply chain is infinitely more complex than it was twenty or thirty years ago,” Jason Dea, director of product marketing at environmental health and safety (EHS) service provider Intelex told EBN in an interview. “Components and parts are coming from all over the world and from multiple vendors and third party contractors from each domain. By nature, it is a system that is very stressed.”
Since Sony released the first commercial lithium-ion battery in 1991 this technology has become the standard for most portable electronic devices, especially laptops, digital cameras, and smartphones.
Twenty years later, in 2011, lithium-ion batteries represented two-thirds of all portable rechargeable battery sales in Japan. According to a recent report by IDtechEX, the lithium-ion battery sector will be a $160 billion market by 2025. The Japanese and Koreans control the key technology and, with the Chinese, the production. The biggest increase will come in the growing electric vehicle market. Even modest electric vehicle penetration could triple lithium demand within 10 years.
Most high-end portable electronic devices use lithium cobalt oxide (LiCoO2) batteries. This chemistry is chosen because it provides the highest power/size/weight ratio, allowing small and light batteries to fuel power hungry devices such as smartphones and laptops. The drawback of lithium-Cobalt batteries is their relatively short lifespan (around 1,000 charging cycles) and low thermal stability.
If lithium-ion batteries are charged correctly –with chargers operating at or below the battery power rating– it is unlikely that overheating will occur. But most smartphone manufacturers have been using advanced charging technologies on their high-end models, such as Qualcomm’s Quick charge, or the new USB-C Fast Charging. These new technologies use smart power adaptors and special cables to charge the battery up to four times faster until it reaches about 80% of the charge, and then turn to slow charging for the remaining 20%. Fast charging technologies are extremely popular since most smartphone users are forced to charge their devices every day.
The problem comes when users charge those phones with other cables (especially with cheap USB-C ones) or different high-wattage power adaptors. Samsung argues that most of the heating issues reported by Galaxy Note 7 users could have been caused by using different cables or adaptors than the ones supplied with the phone.
Low quality, cheap adaptors and cables are not the only issue; the battery market, and its supply chain, is full of counterfeits. It is estimated that over 10% of the world's portable electronic devices are equipped with counterfeit batteries, especially low cost smartphones manufactured in China. In many of those cases the battery factory is supplied with defective or low quality cells, which are fitted into a new battery pack, which undergoes a quick charge-discharge test and is then shipped to the device manufacturer.
Instead of these quick tests, manufacturers should follow the standards set up by the IEEE, which require rigorous testing. For example, IEEE 1625 and 1725 norms for laptop and cell phone batteries, respectively, require mechanical tests on every pack design including shock, vibration, thermal shock, altitude, thermal exposure, and mould stress.
George Kerchner, the executive director of Portable Rechargeable Battery Association (PRBA), said last December that “counterfeit batteries remain a plague on our industry and a danger to consumers.”
The Samsung Galaxy Note 7 is not the first device recalled because of a risk of explosion of Lithium-Ion batteries. In March 2007 computer manufacturer Lenovo recalled over 200,000 laptop batteries at risk, and the same year, in August, Nokia recalled over 46 million smartphone batteries for overheating and potential explosion. In both cases those devices had user removable battery packs –allowing for a quick exchange of the battery–, something that most of the current devices don't. According to the Wall Street Journal, the massive recall of the Samsung Galaxy Note 7 could cost the Korean giant over $900 million.
Apple is now introducing the iPhone 7, which features quick charging and a longest ever battery life. It is difficult to determine which manufacturers are currently providing Apple with the batteries for the iPhones. The iPhone batteries appear to have an identity crisis, according to popular repair site IFixIt. On the iPhone 6 and iPhone 6s the battery markings on the front show Apple South Asia (Thailand), and Apple Japan; on the back it says made in Huizhou, China.
Future generations of Li-Ion batteries will be structural, non-flammable and non-toxic, experts predict. Some manufacturers are also experimenting with solid-state batteries that are flexible, similarly to flexible circuits, which will allow device manufacturers to design new devices with different shapes and potentially flexible displays.
In the meantime, a technology issue can quickly become a customer relationship and branding nightmare. “The increasing load of the supply chain means that most organizations are looking at working with more outside sources versus internal people,” said Dea. “In reality, in these cases OEMs are actually outsourcing customer goodwill itself. From a consumers standpoint, they don't know where their phone manufacturer buys batteries and they don't care. They just know that that supplier failed them. Whether it is a bad batch of solder or an engineering diagram was upside down, the customer doesn't care. They feel betrayed and disappointed by the label. That brand, the company's reputation and the customer good will is effectively in the hands of the supply chain.”
What is clear is that the lithium-ion battery technology is here to stay, and the pressure on the supply chain to provide more cells, and safer batteries, will increase dramatically. OEMs and battery manufacturers need to be more vigilant of the supply chain for battery components and final units, otherwise issues such as Galaxy Note 7's could have serious consequences for customers and damage the brand image beyond repair.