The 50-billion-yuan separator leader suffered a major setback in its overseas expansion, while the "second dragon" took the opportunity to seize market share...

The overseas expansion narrative of Celgard leader SEMCORP (SZ: 002812) encountered a severe setback in the summer of 2026.

At the end of June, the news that SEMCORP's Hungarian plant was "shut down" due to environmental issues caused a huge stir in China, and the controversy continues to this day. According to Reuters, a city councilor in Debrecen, Hungary, stated that the SEMCORP plant will remain closed for the "long term".

Misfortunes never come singly. In May this year, SEMCORP formally terminated its lithium battery separator project in Malaysia. This overseas base, with a planned capacity of 1 billion square meters and a total investment of about 2 billion yuan, died before construction even started, nearly 20 months after it was announced.

SEMCORP is the global leader in battery separators, with a current market value of around 50 billion yuan. It is also one of the earliest Chinese lithium battery material manufacturers to go global. Its envisioned globalization blueprint of three major overseas bases in Hungary, the United States, and Malaysia was once the most attractive part of its capital market narrative. Now, two of its overseas bases have suffered setbacks one after another, and the highly anticipated growth engine has suddenly turned into a "minefield".

Against the backdrop that the lithium battery industry is already in a new upward cycle, the stagnation of SEMCORP's overseas projects has a huge negative impact on the company. The industry cannot help but question: when the overseas front encounters setbacks and domestic competition intensifies, how long can SEMCORP hold on to its throne as the global leader in battery separators?

From a "Highly Sought-After Project" to an Unwelcome Presence

"SEMCORP's operations in Debrecen are unwelcome." On July 1, Telex reported that Debrecen Mayor Papp László used such harsh words to evaluate SEMCORP.

The outside world may not have imagined that SEMCORP's Hungarian base was once treated as a "highly sought-after project" by the local authorities.

As early as 2020, SEMCORP's plan to establish a production base in Debrecen, Hungary, was expected to achieve an annual base film output of 400 million square meters, with an investment of up to 183 million euros (about 65 billion Hungarian forints) just for the first phase. The following year, the Hungarian government officially announced the project, stating that SEMCORP promised to create 440 jobs, and the Hungarian government accordingly applied for a huge industrial subsidy of about 13 billion forints for SEMCORP.

First Phase of SEMCORP's Hungarian Base Project

However, in February this year, a suspected chemical leak incident occurred near SEMCORP's Hungarian plant, where local residents found unknown liquid seeping into the soil. SEMCORP described it as "condensed water with no harmful components". But this statement was not recognized by the local state government.

Soil sampling tests at SEMCORP's plant conducted by the local state government found that the aluminum concentration here reached 2.676 million micrograms per liter, while the legal safety limit is 200 micrograms per liter - exceeding the standard by 13,000 times. In addition, multiple elements such as arsenic, zinc, lead, cobalt, and cadmium also exceeded the standard. The pollution source is said to come from the core section of the alumina aqueous solution in the workshop.

In June, the Office of the State Government of Hajdú-Bihar in Hungary officially issued a production suspension order, completely halting the production and operation of SEMCORP's plant in Debrecen. The penalty decision clearly states that SEMCORP's improper operations caused environmental pollution and harmed the surrounding environment. SEMCORP disagrees with this result, believing that its processes are compliant and its equipment is complete. The company has filed a lawsuit with the administrative court to revoke the production suspension penalty, but there has been no outcome so far.

Regarding SEMCORP's situation, some industry insiders believe that this is a "political conspiracy" targeting Chinese companies: in early 2026, after the regime change in Hungary, the new government chose to target foreign-funded projects - this is not only a political break from the previous administration, but also a gesture of goodwill towards the EU to promote the unfreezing of about 16.4 billion euros in frozen recovery funds.

However, other industry insiders believe that this is not an isolated case targeting Chinese enterprises. Because in 2025, Samsung SDI was also ordered to suspend production in Hungary due to environmental issues.

But in any case, SEMCORP's Hungarian plant has been shut down. Before there is time to debate whether it is a political conspiracy, the adverse effects have already occurred. The plant, which had already started production and supplied products to overseas customers, can no longer deliver goods after the shutdown. This will not only damage the trust of overseas customers, but also may lead to a series of lawsuits and claims.

Overseas Base Construction Suffers Consecutive Setbacks

2026 has been an unlucky year for SEMCORP. In addition to the Hungarian base, the construction of the Malaysian base was also announced to be terminated in May this year.

In September 2024, SEMCORP grandly announced an investment of about 2 billion yuan in Malaysia to build a production capacity of 1 billion square meters, with the goal of "strengthening its market leadership and promoting global industrial layout". But less than 20 months later, the project was terminated before construction even started.

For SEMCORP, overseas business has high expectations. Data shows that in 2025, SEMCORP's gross profit margin in the domestic market was between 8% and 18%, while the gross profit margin in the overseas market reached 34.97%. With the advantage of high gross profit margin, overseas production bases are the core performance growth point of the company.

To this end, SEMCORP has drawn up a globalization blueprint of three major overseas bases in Hungary, the United States, and Malaysia. Specifically:

The Hungarian base in Europe is the core of the company's overseas capacity layout, with a total investment of over 5 billion yuan and a total planned battery separator capacity of 1.2 billion square meters, deeply locking in customers such as Volkswagen, SK On, and Samsung SDI;

The base in Ohio, North America, has an investment of 2.5 billion yuan and a planned high-end coated separator capacity of 700 million square meters, which can avoid US trade tariffs and support automakers such as Tesla and General Motors;

The Malaysian base has a planned capacity of 1 billion square meters, relying on the advantages of low-cost energy and trade policies to serve Southeast Asian battery clusters, including CATL, LG Energy Solution, and EVE.

In addition, SEMCORP also has a production base in Thailand in Southeast Asia. This base is an early pilot project, mainly established to accumulate overseas production experience, with a relatively small capacity of about 200 million square meters.

Based on the above data, the total planned capacity of SEMCORP's overseas bases is about 3 billion square meters. If the Hungarian base is "shut down" and the Malaysian project "fails", the company's overseas capacity will be reduced by more than two-thirds. In addition, although the company's US base is still progressing, there are major uncertainties in the implementation time and capacity release under the current background of intensifying Sino-US trade frictions.

With consecutive setbacks, SEMCORP's overseas dream is likely to be shattered, casting a shadow over the company's future performance growth.

SEMCORP's Disappointment Creates Opportunities for Senior

While SEMCORP is encountering setbacks overseas, Senior Tech (SZ: 300568), which ranks second globally right after it, is accelerating its "head start".

In Southeast Asia, the first phase of Senior Tech's Malaysian plant has a total investment of nearly 5 billion yuan. After reaching full production, it will form a capacity of 2 billion square meters, twice that of SEMCORP's terminated project.

Huaneng Energy Network noted that on June 23, Senior Tech was listed on the Hong Kong Stock Exchange to achieve A+H share listing. One of the key investment directions of the 1.343 billion yuan raised is the construction of production bases in Malaysia and the United States. Once Senior Tech's production capacity in Southeast Asia is completed, it will directly "take over" the market space vacated by SEMCORP.

Chen Xiufeng, Chairman of Senior Tech

In Europe, Senior Tech is also advancing aggressively. The company has planned capacities of 1.5 billion square meters and 200 million square meters in Sweden and Spain respectively, covering the two major markets of Northern Europe and Southern Europe, which is more ambitious than SEMCORP's plan focusing on Central and Eastern Europe.

It is worth mentioning that in June this year, Senior Tech launched the world's first green lithium battery separator and the "SolidShield" series of solid-state battery membrane materials in Stockholm, Sweden, with a clear goal of occupying more than 25% of the European market by 2035. 60% of the separators in the European market rely on imports, and Senior Tech is seizing the initiative in this high gross profit margin market.

In North America, Senior Tech's base in North Carolina, USA, started operations in November 2025, with a total investment of about 632 million Hong Kong dollars. The North American base will further strengthen Senior Tech's localized supply capacity, mainly targeting the growing market demand for high-performance lithium battery separators in the energy storage and electric vehicle industries in the North American market.

The globalization paths of the two leading companies form a sharp contrast: one entered grandly and ended up dejected; the other advanced steadily and continued to increase investment. The ebb and flow in the overseas market may change the competitive balance between the two companies. With the support of the high gross profit margin overseas market, Senior Tech's pursuit of SEMCORP will become more powerful.

This article is from the WeChat official account "Huaneng Energy Network", author: Jiang Bo, editor: Wang Dong, published with authorization from 36Kr.