Jokowi’s EV ambition takes a step forward with $9.8-B cathode factory

PRESIDENT Joko Widodo’s ambition of building out Indonesia’s electricvehicle (EV) supply chain is seeing another step forward with plans for a cathode plant.

Indonesian state miner Aneka Tambang, Indonesia Battery Corporation, and a consortium led by South Korea’s LG Energy Solution Ltd. are building the facility as part of a $9.8 billion “grand package” to build battery production onshore, according to a statement by Indonesia’s investment ministry on Thursday.

The Southeast Asian country is the world’s largest source of nickel, a key material for high-performance batteries, and it’s seeking to use that advantage to build out an EV industry onshore. Indonesia has seen a rush of investments into building nickel smelters, followed by plans for a cathode precursor facility. A cathode plant would take the country one notch higher in the value chain.

Construction for the cathode plant will begin as early as this year after the companies resolved the trickiest part of the negotiation involving shareholding, LG Energy Chief Executive Officer Young

Soo Kwon said in the ministry statement. The group of companies are also building a nickel smelter, cathode precursor factory and a $1.1 billion battery cell factory set to start production in April. Investment Minister Bahlil Lahadalia said the plans were set back after the US issued the Inflation Reduction Act, which disrupted the global supply chains for EV battery materials. Bloomberg News

AI boom fuels 487 percent stock surge for South Korean family

AS investor interest in ar - tificial intelligence (AI) sends shares of technology giants soaring, a little-known circuit board maker in South Korea is cashing in big.

Isu Petasys Co., which counts Alphabet Inc., Nvidia Corp. and Microsoft Corp. as customers of its multilayered boards, has seen its share price surge 487 percent this year—among the biggest gainers on South Korea’s benchmark stock index. The company’s recent boom has also helped boost the value of stakes held by Chairman Kim Sang-beom and his family to more than $800 million as of August 3.

Kim, who controls 100 percent of holding company Isu Corp., is just the latest example of how soaring demand for AI investments is creating massive wealth. Jensen Huang, chief executive officer of leading AI company Nvidia, has seen his fortune surge almost three-fold this year to $39.9 billion, according to the Bloomberg Billionaires Index. “Hardly any local companies directly supply Nvidia and Google, but

Isu Petasys got the job,” said Baik Gil-hyun, an analyst at Yuanta Securities Korea Co. “If the AI boom continues, so will the interest in the company.” Isu Petasys, founded in 1972, began distributing printed circuit boards, mainly for hard disk drives, in 1989. Its parent company, Isu Group, has businesses in industries, including chemicals, construction and biopharmaceutzicals.

Kim became the group’s chairman in 2000 after his father, Joon-sung, stepped down after four years. Before joining Isu, the younger Kim worked at the now-defunct industrial conglomerate, Daewoo Group, which was founded by his father-in-law Kim Woo-choong, according to local newspaper Korea Joongang Daily.

On top of their 26 percent stake in Isu Petasys, Kim and his family also own stock in the group’s other publicly traded units, including Isu Specialty Chemical and Isu Chemical. Company filings show that shares pledged for loans account for just under half of the total value of their stakes.

Diversifying base

ISU PETASYS didn’t make Kim available for an interview. The company didn’t respond to questions about their customers or the value of the family’s stakes.

In recent years, Isu Petasys has leaned into the AI craze, diversifying its customer base from predominantly telecommunications manufacturers like Nokia Oyj, and adding technology giants such as Alphabet and Nvidia, according to Park Hyungwoo, an analyst at SK Securities Co. in Seoul. Orders for its boards used for AI accelerators jumped almost eightfold to 47.3 billion won ($36.4 million) in the first quarter from a year earlier, according to a June presentation.

Other prominent players in high-end printed circuit boards include Japan’s Ibiden Co., Taiwan’s Unimicron Technology Corp., and Samsung Electro-Mechanics Co.

While the company’s revenue grew 3.9 percent to 172 billion won in the first three months of this year from the previous quarter, its operating profits fell 33 percent to 20.2 billion won, according to filings.

‘Obvious beneficiaries’ SK Securities’ Park said he expects a drop in operating profits for the year, partly because Isu Petasys’s AI products are less lucrative than those sold for telecommunications devices. Despite that, he remains optimistic.

“The company is one of the most obvious beneficiaries because it’s actually seeing a growing portion of its revenue from AI-related sales,” Park said.

Increasing tensions between the US and China may have also contributed to Isu Petasys’s expansion, as US companies prefer non-Chinese suppliers, according to analyst Baik. Park said he expects AI-related business to make up 20 percent of the company’s revenue this year and at least 30 percent in 2024.

“It doesn’t look like AI is a temporary trend that will fade soon,” he said. “It could change the direction of the industry, like how PCs and smartphones did in the past. Then things look bright for Isu Petasys.” Bloomberg News