Samsung SDI to invest $750 million into Ulsan battery plant

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Samsung SDI to invest $750 million into Ulsan battery plant

Published: 24 Jan. 2024, 18:44 Updated: 24 Jan. 2024, 19:44

SARAH CHEA
chea.sarah@joongang.co.kr

Samsung SDI CEO Choi Yoon-ho, left, takes a photo with Ulsan Mayor Kim Doo-gyeom, after signing an agreement to invest 1 trillion won ($750 million) for a battery plant on Wednesday. [YONHAP]

Samsung SDI will invest 1 trillion won ($750 million) to build a battery plant in Ulsan.

The Korean battery maker signed a memorandum of understanding Wednesday with the Ulsan city government to build the plant on a 1.23 million-square-meter (13.24 million-square-foot) site in Ulsan.

The latest announcement doubles the size of the site; the company stated back in November that it would invest 412.5 billion won to build the plant on 665,000-square-meter site.

The battery plant will include facilities to make cathodes, one of the major ingredients in batteries. Cathodes take up to 40 percent of a battery's cost.

“Specific details about the production and types of batteries have not been decided,” a Samsung SDI spokesperson said.

Samsung SDI pledged to hire Ulsan citizens preferentially for the plant. The city government will support the project with a fast administration and approval process.

“The investment will help Samsung SDI gain market dominance in the battery sector,” said Samsung SDI CEO Choi Yoon-ho. “We will endeavor to supply products with best quality and safety by applying innovate production technologies.”

The latest investment comes as Samsung SDI scrambles to secure cathode materials amid growing demand for EVs.

Samsung SDI in 2020 formed EcoPro EM, a joint venture with EcoPro BM, to supply cathodes materials. Samsung SDI is the exclusive customer for EcoPro EM's nickel cobalt aluminum (NCA) cathode materials. EcoPro EM's production capacity stands at 90,000 tons every year.

Samsung SDI was the world's fifth-largest battery maker as of the end of November with a 9.9 percent market share, according to data from SNE Research. Its major clients include BMW, Audi and Volkswagen.

Samsung SDI recently signed a seven-year supply deal with Hyundai Motor for its EV lineups that are bound for the European market. Samsung SDI batteries will power around 500,000 EVs starting in 2026.

The size of the deal has not been disclosed, though media reports predict it to be around 5 trillion won.

BY SARAH CHEA [chea.sarah@joongang.co.kr]