Recent reports from South Korean media suggest that Samsung SDI is preparing to supply lithium iron phosphate (LFP) batteries to a leading global battery energy storage system (BESS) integrator, with a contract expected to be finalized in the fourth quarter. The three-year agreement is anticipated to be worth several trillion Korean won.
On September 1, South Korean outlet The Elec reported that Samsung SDI is in negotiations with the world's largest ESS manufacturer for a three-year LFP cell supply deal, with annual volumes reaching several gigawatt-hours and transaction values in the trillions of won. Additional details from a Threads user indicate the order could be around 10GWh per year (30GWh over three years), with a contract value of at least 3 trillion won (approximately 14.97 billion yuan). The agreement, which includes an option for renewal and potential volume increases, is slated to be signed in the fourth quarter.
Could the mystery buyer be Sungrow Power Supply Co., Ltd. (300274)? Reports suggest this is not the first collaboration between the two parties—back in 2014, Samsung SDI and the client established a joint venture in China to explore the energy storage market. The client, which does not produce batteries itself, primarily sources cells from Chinese manufacturers like CATL (300750), CALB (03931), and EVE Energy (300014) for its ESS products.
Industry sources believe the client may be Sungrow Power Supply Co., Ltd., which partnered with Samsung SDI in 2014 to create two joint ventures in Anhui—Samsung Sungrow (Hefei) Energy Storage Battery Co., Ltd. and Sungrow Samsung (Hefei) Energy Storage Power Co., Ltd.—though the partnership ended in 2022. Analysts suggest that if the client is indeed Sungrow, the renewed cooperation could be driven by increasingly stringent U.S. energy storage regulations, prompting companies to diversify their supply chains. In its August 29 investor relations update, Sungrow stated it is not currently considering local manufacturing in the U.S., but is seeking partnerships with overseas firms in areas like components, services, and small-scale systems, emphasizing that its U.S. business will not disappear abruptly.
Equipment order already in place
Samsung SDI has already begun preparations for this order. Its U.S. joint venture plant, Star Plus Energy (SPE), currently operates four production lines, with three already shifted to energy storage. The third line is dedicated to the aforementioned client, providing cells at the 300Ah level. Meanwhile, South Korean battery inspection equipment maker Innometry disclosed on August 27 a contract worth approximately 5 billion won (about 24.95 million yuan) to supply CT inspection equipment for battery integration, which industry observers expect to be deployed on the SPE plant's third line.
Industry analysis suggests that Samsung SDI's success in securing this order is closely tied to its U.S. production capacity. Beyond SPE, Samsung SDI is also converting another U.S. joint venture battery plant to energy storage. On August 11, Samsung SDI acquired all of General Motors' 49.99% stake in their joint venture Synergy Cells, turning it into a wholly-owned subsidiary and planning to operate the 27GWh power battery plant independently as a multi-category production base for storage and power batteries. Given the growing U.S. storage orders and expanding capacity gaps, the plant may prioritize storage battery production.
On the manufacturing front, Samsung SDI has also established an LFP materials supply chain that complies with U.S. requirements for non-foreign entities of concern (Non-FEOC), ensuring full-chain compliance from materials to manufacturing. Currently, a prismatic LFP energy storage cell production line in the U.S. is in the mass production quality validation phase, with production expected to start in October and deliveries to SBB 2.0 storage system customers beginning by year-end.
Beyond Samsung SDI, competitors like SK On and LG Energy Solution are also ramping up U.S. local production capacity to secure access and competitive advantage in the North American storage market. This article serves solely as an overview of public industry information and objective analysis; companies mentioned are references for industry chain case studies and should not be construed as investment advice. Market risks exist, and investment requires caution.