Battery recall swamps Sony production

Sony Corp. said Tuesday that a recall of as many as 9.6 million of its personal computer batteries was overwhelming its production capacity and warned that it could lose some business to its rivals.

Besides Sony itself, major computer makers such as Dell Inc., Toshiba Corp. and Apple Computer Inc. are recalling Sony-made lithium-ion batteries, which in rare cases can overheat and catch fire.

Sony Executive Deputy President Yutaka Nakagawa said Sony’s output capacity was not sufficient to supply enough new batteries to replace its customers’ batteries while also meeting regular demand not related to the recall.

Nakagawa said Sony was in talks with PC makers about enlisting the help of other battery makers to meet demand.

Asked about the likelihood that some of those PC makers could take their business elsewhere and permanently reduce their reliance on Sony batteries, he said: “We think there is a good chance for something like that to happen.”

Such a move could be a boon for Sanyo Electric Co., the world’s top maker of lithium-ion batteries in 2005, according to research firm J-Star Global. Sony ranked second; Matsushita Battery Industrial Co. came in third.

Sony said it had no plans to quit its battery operations, which Morgan Stanley analyst Masahiro Ono estimated last month would post sales of 180 billion yen ($1.5 billion) for the year to March 31, or 2% of the company’s overall revenue.

Sony does not disclose the size of its battery operations.

“The battery operation is a very important business for us. We have no intention of quitting it or scaling it down,” Nakagawa said.