Samsung Quashes Battery Link to Report Galaxy Note 7 Fires in China

Samsung Electronics Co. determined that a problem with batteries that triggered a global recall of its Galaxy Note 7 smartphones wasn't to blame for devices that burst into flame in China, saying their combustion was likely due to unspecified external heat sources.

The company launched a preliminary investigation after comments circulated over the weekend on social media about two of the high-end phones sold in China igniting, mirroring complaints by Note 7 users from the US to South Korea. But on Monday, Samsung and its supplier Amperex Technology said they found no evidence of a link between its batteries and the fires.

(Also see: Samsung Galaxy Note 7 Recall: Here's How to Check If Your Unit Is Safe)

The South Korean company is grappling with its deepest crisis in years, a global recall precipitated by scores of reports that the batteries in its newest gadget were prone to sudden combustion. But it continued selling Note 7 devices in China, explaining that the power cells for phones sold there came from ATL and carried no defects.

"Samsung has begun an initial investigation and determined that the device's overheating had no direct link to the batteries our company produced," ATL said in a statement. "We judge that the heat source originated outside of the battery, and the overheating was very possibly caused by external factors."

(Also see:  Samsung Is Sending Mixed Signals About What to Do With the Galaxy Note 7)

Samsung announced a worldwide recall of the Galaxy Note 7 - one of its best-reviewed phones upon debut - on September 2 that could cost the company upwards of $1 billion. Regulators, airlines and the company itself warned against the use of the devices. While China had been excluded from the recall, Samsung plans to retrieve a batch of fewer than 2,000 pre-sale test devices starting this week.

The batteries from the phones with confirmed problems are made by Samsung SDI Co., a person familiar with the matter has said.

The misstep has set off soul-searching at the conglomerate and in South Korea, where the company employs hundreds of thousands and is revered for leading the nation's rise since the Korean War. Samsung's flagship electronics unit built its reputation on high-quality products and cutting-edge technology, becoming the largest phone maker in the world and a powerful rival to Apple in innovation.

(Also see:  'Samsung Galaxy Note 7 May Go Down as the Worst Smartphone Ever')

It's been trying to get to the bottom of the faulty batteries in concert with regulators. Its initial conclusions indicate an error in production placed pressure on plates contained within battery cells. That in turn brought negative and positive poles into contact, triggering excessive heat. Samsung however stressed that it needed to carry out a more thorough analysis to determine "the exact cause" of battery damage.

According to China's inspection agency, certain parts of the separator that sits between electrodes could thin out and rubber insulators may not adequately cover the plates, causing a short-circuit.

© 2016 Bloomberg L.P.