Samsung Electronics finally identified what went wrong with its Galaxy Note 7 handsets that led to one of the worst technology recalls in recent times, a day before its full-year earnings.
Dong-jin Koh, Samsung's mobile business chief, acknowledged two separate instances of battery malfunctions were to blame for some of the handsets catching fire at a Monday press conference in Seoul, South Korea. He also used the conference to apologize to customers and suppliers.
Investors responded positively to the news, with Samsung shares closing up 2.31 percent at 1,903,000 won during market close on Monday.
The Galaxy Note 7 handsets were packed with lithium-ion batteries, which are arranged in three layers: a positive electrode, a negative one and a third physical layer that acted as the separator between the first two. When the positive and negative electrodes touch, it can sometimes lead to short circuits within the battery cells.
Koh explained in the first set of batteries, which were rolled out with the original devices, there was an issue with the upper right hand corner of the battery cell. "Our analysis showed the main cause for the incidents was deflections in the negative electrodes," he said, adding incorrect positioning of the negative electrode tip also led to a higher likelihood of incidents.
For the second set of batteries, which were supplied by a different manufacturer and were put into the replacement units, Samsung found melted copper on the negative electrode area. Koh said there were welding issues that led to contact between the positive and negative layers, resulting in short circuits.
"It does all add up," according to Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. But the odds of two separate battery manufacturers having issues in the same phone was incredibly low, he told CNBC's "Squawk Box" on Monday.