NEW YORK—Following an investigation that took months, Samsung Electronics has revealed the root causes behind those exploding Note 7 phones: design and manufacturing flaws associated with the lithium-ion batteries used in the phones, which were produced by Samsung’s battery suppliers.
The company released the findings at a press conference in Seoul late Sunday.
Samsung conducted its own internal investigation to determine why some of the devices caught fire, and hired the UL safety consulting firm and the Exponent engineering and scientific consulting firm to conduct their own independent tests. Another independent firm, Germany’s TUV Rheinland, was brought on to assess Samsung’s factories and logistics.
The Note 7 debacle has been a black eye for Samsung. The phones had to be recalled not once, but twice, before ultimately being put out to pasture. The episode damaged the Samsung brand and cost the company at least $5.3 billion.
Samsung certainly doesn’t want any hangover effect as it readies its next big flagship phone, likely the Galaxy S8 that is expected to be released in the spring.
“It was a very tough several months for us. Clearly its impact to the consumers, its impact on channel partners and impact on our employees is not insignificant and we embrace that and we own that,” Tim Baxter, President and Chief Operating Officer of Samsung Electronics America told USA TODAY in an interview. “We’ve learned quite a bit about crisis management in the past few months.”
Added Samsung’s Korea-based mobile chief DJ Koh, who also spoke to USA TODAY, “We are working around the clock to get back our business, to deliver the best product and get our customers’ trust back.”
Samsung has been successful in getting the faulty phones back — the company says 97% of the Note 7 phones have been returned, with more than half of the remaining 3% off the network. That’s far above typical product recall return rates.
Factory in Gumi, Korea where Samsung Galaxy Note 7s are being inspected (Photo: Samsung)
As part of its investigation, Samsung assigned more than 700 R&D engineers to try to replicate the Note 7 failures, along the way testing more than 200,000 Note 7 phones, and more than 30,000 standalone batteries.
Samsung uncovered separate design and manufacturing flaws within the batteries, and placed blame on two suppliers that make them. Samsung wouldn’t identify those companies, though the Wall Street Journal named Samsung SDI (a different company within the Samsung universe) and ATL, a Chinese supplier.
Some Note 7s used what is being identified as Battery A, and some used Battery B. While Samsung dictates the basic battery requirements — energy capacity, voltages, currents, external dimensions, etc. — the battery partners themselves have leeway in the materials they use and in the way they apply their own intellectual property.
That not only meant that Battery A and Battery B were different from one another, but that the problems that surfaced in each also proved to be distinct.
In simple terms, lithium-ion batteries are made by taking two electrodes, one positive, one negative, and placing a separator in between to keep them from touching and causing a short circuit.
Samsung concluded that the defect associated with Battery A was a design flaw with the battery manufacturer in question not supplying sufficient space in the battery’s pouch to allow electrodes to remain straight. Instead they were bent, resulting in an electrode “deflection” in the upper right corner of the battery that was considered the main cause of the problem. The deflection can stress or weaken the separators, leading to a failure.
Battery B, on the other hand, was blamed on a manufacturing defect, related to an abnormal welding process that led to improper contact between a positive tab or terminal and a negative electrode.
There were other contributing factors that some of the independent testing firms uncovered. On Battery B, for example, there was supposed to be an insulation tape that covers the weld; in some instances, the tape was missing.
The initial Note 7 recall involved phones with Battery A. Since Battery B didn’t have the same issues as Battery A, Samsung thought it was in the clear when the replacement Notes had Battery B. Of course, the problems inherent to Battery B surfaced soon enough and it turned out that this second battery producer couldn’t handle the demands that being the sole Note 7 supplier put on them.
While Samsung ultimately placed blame on the partners for the design and manufacturing flaws, “Ultimately we take responsibility for this. It’s our product, we set the specifications…and it’s up to us to catch the problem before it leaves in one of our devices,” says Samsung Electronics America senior vice president Justin Denison.
To help prevent a repeat episode from occurring, Samsung is implementing an 8-point battery safety check that will include a durability test, visual inspection, x-ray test and other tests.
A Samsung engineer goes through a disassembly battery test (Photo: Samsung)
“Even with an incident like the Note, the failure rate is low — one out of tens of thousands,” says Dr. Gerbrand Ceder, Professor of Materials Science and Engineering, UC Berkeley, who joined a Samsung battery advisory group. “Most of the time we all carry lithium-ion batteries around and they are safe. But we should remain vigilant to keep on improving that safety and enforcing it….I think there is always awareness that because of their high energy content, one should be cautious with them.”
Samsung says it is sticking with the battery suppliers in question and that no heads have rolled as a result of the Note debacle. “Everybody involved with the Note launch has been involved with the Note crisis,” Baxter says. “That’s where the focus of the organization has been and continues to be.”
The company also insists that the problems that occurred with the Note 7s were isolated to the batteries and wasn’t caused by any decisions to rush to market — the Note 7 having launched a couple of weeks before the iPhone 7. Samsung historically launches its Galaxy S flagship phones in the spring, and its Notes devices in mid-to-late August, just as it was with the Note 7. Bloomberg had written in September that a rush to take advantage of what was expected to be a “dull” iPhone began the Note crisis.
Samsung hasn’t said what the future is for the Note brand itself. But as part of the damage control, Samsung has been reaching out to the Note customers who have been its most loyal; more than 10,000 customers have said they want to learn more about what happened. Samsung plans to run an advertising campaign in the spring that will communicate quality and assurance. And the company plans to apply what it has learned during the Note debacle to the release of the S8 or whatever its new phone turns out to be.
“The recovery process takes time. But we’ve also seen those that do well not only recover but elevate beyond where they were. That’s what we aspire to do,” Baxter says.
Samsung batteries are x-rayed in Gumi, South Korea. (Photo: Samsung)
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