Samsung SDI wins major ESS lithium battery contract

Samsung SDI has secured a supply contract worth more than $15 billion for lithium iron phosphate batteries used in energy storage systems, marking the company’s first large-scale order for LFP batteries.

Samsung SDI said on Dec. 10 that it signed the agreement with a major U.S. energy infrastructure developer to provide LFP batteries for ESS projects. Deliveries are scheduled to begin in 2027 and continue for about three years. The company noted that the contract’s total value surpasses $15 billion.

Samsung SDI plans to manufacture the LFP batteries by repurposing production lines at its U.S. facility. The company will reconfigure part of its Indiana plant, which it operates with Stellantis, to create a dedicated production system for ESS-grade LFP batteries.

Energy storage systems store electricity and help stabilize renewable power sources, including solar energy, which generate electricity intermittently. ESS technology has gained prominence as a way to address power shortages at data centers in the age of artificial intelligence.

The ESS market has long been dominated by LFP batteries, a segment led largely by Chinese manufacturers, rather than the nickel-based NCM and NCA batteries traditionally produced by South Korean firms. LFP batteries are widely viewed as safer and more affordable than their nickel-based counterparts. BloombergNEF estimates that LFP batteries make up more than 90 percent of the global ESS market.

South Korea’s three major battery makers, late entrants to the LFP sector, have begun to show meaningful results since last year. Industry analysts say that focusing on ESS is increasingly essential, given rapid growth in the AI sector and weakening demand for electric vehicles.

LG Energy Solution began locking in large ESS contracts last year, starting with a $1 billion agreement with the U.S. subsidiary of solar company Hanwha Q Cells. In August, it followed up with a $6 billion ESS battery supply deal with Tesla. SK On entered the market soon after, securing its first ESS contract in September, an agreement worth up to $2 billion with U.S. renewable energy developer Flatiron for LFP batteries. With Samsung SDI’s latest deal, all three major South Korean battery makers now hold a firm foothold in the LFP-based ESS market.

A Samsung SDI official said the company intends to expand the supply of ESS products that offer high safety, strong performance, and price competitiveness, starting with this contract.


박현익 기자 beepark@donga.com