Japanese electronics maker Maxell Ltd. made an announcement Monday. The company will terminate its production of prismatic lithium-ion batteries. This will happen as early as May.

Maxell will dissolve a Chinese subsidiary. The subsidiary is Wuxi Maxell Energy Co. This company makes the prismatic batteries. Maxell will focus its business resources. The focus will be on all-solid-state batteries. These are also secondary batteries.

Maxell started production of prismatic lithium-ion batteries in 1996. These batteries have seen wide use. They powered mobile phones. Smartphones also used them. Portable video game consoles were another application.

However, Maxell’s lithium-ion battery business faced challenges recently. Profitability decreased. This was due to a shift in the market. Laminated lithium-ion batteries gained popularity.

Regarding the end of production, Maxell expects losses. The company will book an inventory valuation loss. This loss totals 1.2 billion yen. They will also book an extraordinary loss. This loss amounts to 2.8 billion yen. A main reason for this loss is additional retirement fees. These fees will go to outgoing employees. This will occur in the year ending this month.

Maxell’s decision reflects a strategic shift. The company aims to concentrate on next-generation battery technology. All-solid-state batteries are seen as a promising area. They offer potential advantages over traditional lithium-ion batteries. These advantages include enhanced safety. They may also offer improved energy density.

The move signifies a response to changing market dynamics. The competition in the lithium-ion battery sector is intense. Companies must adapt to technological advancements. They also need to address evolving consumer preferences.

Maxell’s long history in lithium-ion battery production marks a significant chapter. The company played a role in the growth of mobile electronics. The decision to end this production indicates a forward-looking strategy. Maxell aims to position itself in the future of battery technology. The financial impact of this decision includes notable losses in the short term. However, Maxell anticipates long-term benefits. These benefits will stem from its focus on all-solid-state batteries. The dissolution of the Chinese subsidiary is a key part of this restructuring. It allows Maxell to consolidate its resources. The company will direct these resources toward its new strategic direction in the battery market.