- Published 2026.11.04 20:59
Synergy Cells plant designated as ESS-only hub amid slowing EV demand
Q3 operating profit hits 407.8 billion won on data center demand
Samsung SDI has begun mass production of lithium iron phosphate (LFP) batteries for energy storage systems (ESS) at its plant in Indiana, accelerating its push into the North American market. The move is aimed at restructuring existing production lines around ESS to cope with the EV chasm (temporary demand stagnation) and preempting new demand from artificial intelligence (AI) data centers to boost profitability.
According to Samsung SDI, the company started mass production of prismatic LFP battery cells at its StarPlus Energy (SPE) plant in Indiana in October 2026.
It is expanding orders through a two-track strategy that adds affordable LFP to its existing high-value nickel-cobalt-aluminum (NCA) products. As a result, it has secured more than 60GWh of orders in the U.S. grid-scale ESS market alone this year.
Specifically, the order backlog includes a 1GWh supply contract for the Samsung Battery Box (SBB) 1.7 signed with U.S. energy company Alpha Omega Power and a cell supply agreement with Sungrow. The secured backlog alone is enough to keep the Indiana production line running stably through 2028.
Samsung SDI's production base restructuring is a preemptive response to the prolonged slowdown in the North American EV market. Large-scale investments made to produce mobility batteries faced difficulties due to sluggish EV sales, prompting the company to shift its focus to fast-growing ESS LFP batteries.
Accordingly, the Synergy Cells plant in New Carlisle, Indiana, has been designated as an ESS-only hub. Synergy Cells was originally a joint venture established with General Motors (GM) with an investment of $3.5 billion (about 4.69 trillion won), but Samsung SDI acquired the entire stake in August 2026 and converted it into a standalone production base.
With the standalone plant secured, the company plans to accelerate the conversion of its EV lines to LFP within the fourth quarter. Rival LG Energy Solution is also pursuing a similar line conversion at its Stellantis joint venture plant, and the ESS share is growing across the North American battery industry.
The ESS-centered business restructuring has led to a clear earnings rebound. Samsung SDI's total revenue in the third quarter of 2026 rose 52.6% year-on-year to 4.6856 trillion won (about $3.5 billion), and operating profit swung to a surplus of 407.8 billion won (about $301 million), the highest level in three years.
In particular, the battery division alone posted revenue of 4.4099 trillion won (about $3.3 billion) and operating profit of 361.9 billion won (about $267 million), driving overall performance. The combination of grid replacement demand and expanded AI data center investment amplified the earnings improvement.
The company is also accelerating the establishment of a local supply chain and securing new demand. To avoid the Foreign Entity of Concern (FEOC) regulations under the U.S. Inflation Reduction Act (IRA) and import tariffs, Samsung SDI has signed long-term LFP cathode material supply contracts with major Korean materials companies and built a supply chain that excludes China.
In addition, it has launched a new cylindrical LFP cell for battery backup units (BBU) to keep pace with the surge in power demand from AI data centers.
Samsung SDI plans to finalize additional long-term supply contracts for utility-scale ESS and uninterruptible power supplies (UPS) by the end of the year, and to participate in the third ESS central contract market auction led by the Korean government to expand its market share.
(Dollar figures are approximate, converted automatically at 1,000 won = $0.738, the rate on Nov. 8, 2026.)
※ This article is an AI translation of the Korean original published by Korea Credit News; it was checked by automated quality guards and published by the English edition desk.
