Samsung SDI breaks ground on $1.3 billion Malaysian battery plant

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Samsung SDI breaks ground on $1.3 billion Malaysian battery plant

Published: 21 Jul. 2022, 17:29 Updated: 21 Jul. 2022, 19:49

Samsung SDI CEO Choi Yoon-ho, second from left, poses with government officials in Malaysia on Thursday during a ground-breaking ceremony for a new battery plant in the southeast Asian country.[SAMSUNG SDI]

Samsung SDI will invest 1.7 trillion won ($1.3 billion) to build a battery plant in Malaysia as demand grows for electric vehicles and other electric devices powered by cylindrical batteries.

Located in Seremban, a city in Malaysia's Seremban District, the factory will be the second Samsung SDI manufacturing facility in the southeast Asian country.

It will produce type 21700 batteries under the PRiMX brand when completed in 2025.

Mass production is scheduled to start in 2024 from some production lines, the company said.

Measuring 21 millimeters in diameter and 70 millimeters in height, the cylindrical battery can be used in electric vehicles, energy storage systems and electric power tools.

The battery maker held a groundbreaking ceremony on Thursday, with Samsung SDI CEO Choi Yoon-ho and Malaysian government officials in attendance.

Also present were executives from parts and material suppliers, including Iljin Materials, W-SCOPE and Posco Chemical.

Local media outlets report that the new factory may supply cylindrical batteries to Tesla, although the battery maker declined to confirm.

Samsung SDI established Malaysian corporation in 1991, and the first plant began producing batteries in 2012.

“This groundbreaking will serve as the beginning of our journey to become a top tier battery maker by 2030,” Choi said during his speech in the ceremony.

“We will develop Samsung SDI’s Malaysia branch into the center of the global battery industry through successful construction and stabilization at the second plant,” Choi said.

Malaysian politicians have high expectations for the investment.

“The investment for the EV battery plant will create jobs for youth and bring more opportunities for local companies,” said Dato' Seri Haji Aminuddin bin Harun, the head of government in the state of Negeri Sembilan, where the Samsung SDI manufacturing is located.

Samsung SDI has production sites in Korea, China, Hungary, and the United States, supplying EV batteries for BMW, Ford Motor and Volkswagen.

A recent project involves Hoofddorp, Netherlands-based Setllantis as the two parties are jointly investing over $2.5 billion to build an EV battery plant in Kokomo, Indiana.

The factory will be the Korean battery maker's first battery cell facility in the United States. The type of batteries being produced in the U.S. has not been decided yet.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]