Samsung's Conclusions on Galaxy Note 7 Recall Backed Up by Regulator -- Update

By Eun-Young Jeong

SEOUL--South Korea's product safety watchdog has concluded that overheating in Samsung Electronics Co.'s Galaxy Note 7 smartphones was caused by problems with battery structure and manufacturing processes, following the smartphone maker's embarrassing recall of 3 million devices.

The South Korean agency's report comes two weeks after Samsung concluded that batteries were the cause of last year's Galaxy Note 7 fiasco, which cost the company about $5 billion in losses and lost sales. Samsung's conclusion was supported by two U.S. firms, UL LLC and Exponent Inc.

The Korean Agency for Technology Standards' report, released Monday, said there didn't appear to be problems with the smartphone itself, or with its software.

The regulator's 13-week investigation found defects related to Samsung's two battery suppliers: Samsung SDI Co.--an affiliate of the smartphone maker--and Hong Kong-based Amperex Technology Ltd., which is also known as ATL.

For batteries supplied by Samsung SDI, the watchdog said damage in the upper corner of the battery's internal structure was caused by pressure from the battery's external casing, which led to overheating.

For ATL, the overheating was triggered by a manufacturing error that resulted in some batteries lacking insulation tape, which protects sensitive areas inside a battery's structure, the regulator said.

Those conclusions matched Samsung's own findings and the agency didn't announce any penalties.

A spokesman from Samsung SDI said the company resolved its manufacturing issues and has been supplying batteries to its clients, including Samsung Electronics. An ATL spokesman declined to comment.

Samsung hasn't released a flagship smartphone since its September recall. The company's mobile chief said the company would delay launching its next flagship smartphone, the Galaxy S8, which has traditionally been introduced to the public at the Mobile World Congress trade show in Barcelona in late February.

Write to Eun-Young Jeong at Eun-Young.Jeong@wsj.com

(END) Dow Jones Newswires

February 06, 2017 02:05 ET (07:05 GMT)

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