Samsung SDI to build new battery plant in Malaysia by 2025

South Korea’s battery manufacturer Samsung SDI Co. held a groundbreaking ceremony for Plant 2 to make cylindrical batteries in Seremban, Malaysia, the company announced on Thursday. 

Samsung SDI will inject 1.7 trillion won ($1.3 billion) in the plant construction which will be completed in 2025. It will start mass production of the so-called PRiMX 21700 cylindrical batteries, which are 21 millimeters in diameter and 70 mm in length, in 2024.

The batteries will be used for electric vehicles, electrical tools and micro-mobility.

Although Samsung SDI didn’t disclose the annual production capacity, market insiders estimate it to be more than 15-16 gigawatt-hour (GWh).

The Samsung Group’s battery-making unit said the global cylindrical battery market is expected to grow from 10.17 billion cells in 2022 to 15.11 billion cells in 2027, with an annual growth rate of 8% on average.

"Today’s groundbreaking ceremony will serve as a starting point for realizing our vision to become a global top-tier company by 2030,” Samsung SDI President and CEO Choi Yoon-ho said during the groundbreaking ceremony.

The company will make its Malaysian affiliate the center of the global battery industry, Yoon added.

The Malaysian affiliate, named Samsung SDI Energy Malaysia (SDIEM), was founded in 1991 as the Korean firm’s first overseas business entity. SDIEM had been a Braun tube production base and started battery production in 2012.

Samsung SDI is bolstering its cylindrical battery production globally. It is increasing its battery manufacturing facilities to supply to Tesla Inc., The Korea Economic Daily understood last month.

The firm is expanding production lines for smaller batteries at its Cheonan plant in Korea, some of which will be converted to pilot facilities to make bigger batteries for EVs, industry sources said.

Testing two types of large-size cylindrical batteries, including the 4680 battery, which is 46 mm in diameter and 80 mm in length, Samsung SDI is aiming for battery sample production in the first half of 2023 and mass production in 2025.

Samsung SDI will announce its second-quarter operating profit next week, which is estimated to be around 400 billion won beyond market expectations. 

"Samsung SDI shares will get a boost if EV sales rebound in Europe, the battery maker's major target region," said Kim Hyun-soo, an analyst at Hana Financial Investment Co.

Samsung SDI stock closed at 567,000 won on the main bourse Kospi on Thursday, 1.43% up.

Write to Hyung-Kyu Kim at khk@hankyung.com
Jihyun Kim edited this article.