Samsung SDI announced on Tuesday a significant cathode supply agreement with L&F, valued at 1.6 trillion won ($1.1 billion). This deal is strategically designed to bolster Samsung SDI’s position in the burgeoning North American energy storage system (ESS) market by establishing a battery materials supply chain independent of China.
The agreement stipulates that Samsung SDI will procure cathode materials from L&F, a Daegu-based battery materials manufacturer, to be utilized in its cost-effective lithium iron phosphate (LFP) batteries intended for energy storage systems. The supply contract is set to commence in 2027 and will span three years, with an option to extend the partnership for an additional three-year period.
These materials will be integrated into the ESS battery production at StarPlus Energy, Samsung SDI’s joint venture with Stellantis located in Indiana. This facility has been actively reconfiguring some of its production lines from electric vehicle (EV) batteries to ESS applications since late last year. Plans are in place to initiate mass production of LFP batteries alongside its existing premium, high-nickel batteries in the fourth quarter of the current year.
This collaboration is anticipated to secure a stable domestic supply chain for critical battery components, enhancing Samsung SDI’s competitive edge within the North American ESS sector. Given the substantial concentration of global LFP cathode supply within China, the US has been implementing stricter regulations aimed at fostering diversification in supply chains.
Notably, L&F made its initial investment in LFP cathode production last year, becoming the first non-Chinese company to do so. The company is currently establishing an annual production capacity of 60,000 metric tons in Daegu.
Industry sources suggest that this agreement holds significant importance as Samsung SDI intensifies its focus on the North American ESS market. This is evidenced by a series of supply agreements, including contracts with two US energy firms totaling 3.5 trillion won.
Capitalizing on advanced fire safety technologies, including No Thermal Propagation and Enhanced Direct Injection, Samsung SDI recently rebranded its ESS battery as “PrismStack.” This new brand name emphasizes the battery’s prismatic design, which contributes to enhanced energy density and improved safety features.
According to a Samsung SDI representative, “This agreement demonstrates the company’s proactive efforts to address the increasing demand for supply chains that are independent of China.” The official further stated that the agreement is expected to strengthen competitiveness and unlock new business opportunities in the North American market.
hyejin2
