Fire At Matsushita Forces Suspension Of Li-Ion Battery Production

October 03, 2007 by Jeff Shepard

Matsushita Battery Industrial Co., the maker of Panasonic brand products, has suspended its production of lithium-ion batteries for mobile phones following a fire at its Moriguchi, Japan plant, a development that some observers say may affect the ongoing worldwide replacement of batteries for Nokia Corp.’s mobile handsets.

Matsushita Battery, a unit of Matsushita Electric Industrial Co., is suspending the line along with one for making batteries for mobile handsets. It remains to be seen when Matsushita Battery will be able to resume the operations of both lines, since the company does not know as of yet how much damage the fire caused.

Matsushita Battery manufactures lithium-ion batteries in Moriguchi and China, with a combined monthly capacity of 25 million units. The company has not disclosed the capacity of the Moriguchi plant alone.

In August, Nokia, the world’s largest mobile phone maker, issued an advisory that up to 46 million batteries used in some of its handsets could pose a risk of overheating. The advisory applied to Nokia BL-5C batteries made by Matsushita Battery between December 2005 and November 2006. Matsushita Battery has said it will meet all costs of replacing the faulty batteries, estimated at between 10 billion yen (US$87 million) and 20 billion yen (US$174 million).

Matsushita has not commented on how the fire could affect Nokia’s plans to replace the batteries, saying Matsushita has not made any estimate.