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Samsung SDI: From CRT Pioneer to EV Battery Powerhouse
I. Introduction & Episode Roadmap
Picture this: It's May 16, 1970. Inside a modest factory in South Korea, a team of engineers watches anxiously as their first vacuum tube—a component essential for black-and-white televisions—emerges from the production line. They've accomplished what seemed impossible just seven months earlier: creating domestic production capability for a technology that would transform Korean manufacturing. That date became the official founding anniversary of what we now know as Samsung SDI, though the company wouldn't adopt that name for another three decades.
Fast forward fifty-five years. In 2024, Samsung SDI achieved annual revenue of KRW 16.59 trillion ($11.55 billion) with an operating profit of KRW 363.3 billion. The company that once made cathode ray tubes for black-and-white televisions now powers some of the world's most sophisticated electric vehicles—from the BMW i7 to the Hyundai IONIQ series—and provides critical energy storage solutions for AI-powered data centers across North America.
The central question of this story is both straightforward and profound: How did a vacuum tube manufacturer for black-and-white TVs transform into one of the world's leading EV battery suppliers for BMW, Stellantis, Hyundai, and General Motors? The answer reveals a masterclass in industrial transformation—a company that twice bet everything on reinvention, navigated the treacherous waters of technology transitions, and emerged as a critical node in the global clean energy supply chain.
Samsung SDI was founded on January 20, 1970, as Samsung-NEC Co., Ltd., a joint venture between Samsung Group and NEC Corporation, with a primary focus on CRT manufacturing for TVs and monitors. Today, it operates two main business segments: Energy Solutions and Electronic Materials. The company expects the global EV battery market to grow by about 21 percent in 2025, mainly in the U.S. and Europe, while the ESS battery market is expected to grow by about 14 percent, led by North America.
The themes we'll explore are universal ones for any investor or business strategist: industrial transformation, the pivot from display to energy, the Korea-Japan-Germany technology axis, and the high-stakes race for next-generation solid-state batteries. Samsung SDI's journey illuminates how even the most successful companies must repeatedly confront existential questions about their future—and how the answers they choose can determine whether they become relics of a bygone era or architects of the next one.
II. Samsung Group Origins & The Chaebol Context
To understand Samsung SDI, you must first understand the chaebol—the uniquely Korean form of conglomerate that shaped the nation's explosive industrialization. Founded in 1938 by Lee Byung-chul as a trading company, Samsung diversified into various sectors, including food processing, textiles, insurance, securities, and retail, over the next three decades. In the late 1960s, Samsung entered the electronics industry, followed by the construction and shipbuilding sectors in the mid-1970s—areas that would fuel its future growth. After Lee died in 1987, Samsung was divided into five business groups.
The 1960s represented a pivotal moment in Korean economic history. The government, led by President Park Chung-hee, pursued an aggressive industrialization strategy built on import substitution and export promotion. The company's early operations were heavily influenced by the economic and cultural context of South Korea in the 1970s. The government's push for self-sufficiency in key industries played a vital role in the company's formation. This history laid the groundwork for Samsung SDI's evolution into a leader in the battery and energy sectors.
What distinguished Samsung was Lee Byung-chul's willingness to make massive bets on new industries. When Samsung entered electronics in the late 1960s, Korea had virtually no domestic capability in the sector. The country imported nearly all its electronic components, from transistors to picture tubes. Lee saw an opportunity to change that—and a way to leverage foreign technology partnerships to rapidly build domestic expertise.
In 1970, Samsung established the joint venture Samsung-NEC with Japan's NEC Corporation and Sumitomo Corporation to manufacture home appliances and audiovisual devices. Samsung-NEC later became Samsung SDI, the group's display and battery business unit.
This partnership model—combining Korean manufacturing muscle with Japanese technological know-how—became the template for Samsung's industrial expansion. It also reflected a fundamental truth about Korean industrialization: the chaebols were not just companies but instruments of national development, often working in close coordination with government industrial policy.
The primary goal was to create a domestic source for these components, reducing reliance on imports. This move was perfectly aligned with South Korea's rapid industrialization during the 1970s. The company's establishment was a crucial step in the nation's technological advancement.
Within the broader Samsung ecosystem, SDI occupied a specific niche: providing the critical components that enabled Samsung Electronics and other manufacturers to produce finished products. This vertical integration strategy—with Samsung Electronics taking the consumer-facing role while affiliates like SDI supplied key components—became a hallmark of the group's approach. It also meant that SDI's fortunes would always be tied to broader technology cycles, making strategic foresight essential for survival.
The chaebol structure provided certain advantages: access to patient capital for long-term investments, shared technical resources across group companies, and the ability to coordinate complex supply chains. But it also created constraints—most notably, the expectation of serving group priorities and navigating the complex family ownership structures that characterized Korean conglomerates. These dynamics would shape Samsung SDI's strategic choices for decades to come.
III. The CRT Era: Founding & Display Dominance (1970–1995)
Samsung-NEC, the former body of Samsung SDI, commenced its business on January 20, 1970. Samsung SDI, established with target business for major electric parts at that time such as vacuum tube, Braun tube, and electric discharge indicator tube, challenged the complicated and investment-intensive electronic parts business. The vacuum tube which Samsung SDI produced for the first time was completed on May 16, 1970, becoming the anniversary of founding Samsung SDI.
Consider the audacity of this moment. Seven months to go from company formation to first production of a sophisticated electronic component. In 1970, South Korea's per capita GDP was roughly $280—about the same as Ghana. Yet here was a company attempting to master the same manufacturing technology that companies in Japan, Germany, and the United States had spent decades perfecting.
Samsung SDI was founded in 1970 under the name of Samsung NEC. During the 70's and 80's, they mainly produced vacuum tubes and black & white picture tubes. After successfully achieving business diversification, they entered the flat display business.
The early years required Samsung SDI to essentially reverse-engineer its way to competitiveness. The NEC partnership provided access to technology, but turning that knowledge into manufacturing excellence required relentless optimization. In the early days, the company began producing black and white TV CRTs, and in 1974 developed the world's third 'Quick Start Braun Tube' for the first time in Korea. In 1976, after the completion of the Suwon plant, the production of color tubes in 1978 was launched.
By the mid-1980s, Samsung SDI had transformed from a technology learner to a technology leader. Samsung SDI's involvement in display manufacturing originated with cathode ray tubes shortly after its founding in 1970. By the mid-1980s, the company had advanced into color display production, commencing mass production of 14-inch color picture tubes in February 1984 and initiating industrial color display tubes later that year. These efforts positioned Samsung SDI as a key supplier of CRT-based monitors and televisions.
The 1990s marked Samsung SDI's aggressive push into global markets. The strategy of Samsung SDI in the 1990s was to implement globalization through diversification of manufacturing bases around the world. It planned to reach 25% world market share by ensuring strongholds linking Malaysia, Germany, Mexico, China and Brazil, and this plan was fulfilled exceedingly.
This global expansion was not merely about chasing lower labor costs. It reflected a sophisticated understanding of the display market: major customers wanted local suppliers, regional trade policies favored domestic production, and serving multiple markets required proximity to key customers. During the 1990s, Samsung SDI pursued aggressive globalization in its core display business, establishing manufacturing facilities in Malaysia, Germany, Mexico, China, and Brazil to diversify production of cathode ray tubes (CRTs) and achieve a 25% global market share in picture tubes.
But even as Samsung SDI celebrated its CRT dominance, storm clouds were gathering. The company expanded into flat-panel displays during the 1990s, developing South Korea's first liquid crystal display (LCD) in October 1989 and subsequently investing in plasma display panels (PDPs). The flat panel revolution was coming, and CRTs—no matter how well-manufactured—were destined for obsolescence.
The lessons from this era remain relevant: technological leadership is always temporary, global scale matters in commoditizing industries, and the seeds of future disruption are often visible years before they transform markets. Samsung SDI's CRT success funded its transition to new technologies, but it also created organizational inertia that would need to be overcome.
IV. Strategic Pivot: From Displays to Batteries (1995–2000)
The mid-1990s marked an inflection point that would determine Samsung SDI's fate for the next three decades. While the company dominated the CRT market, its leadership recognized an uncomfortable truth: flat-panel displays were improving rapidly, and CRTs would eventually become obsolete. But pivoting away from a profitable core business into unproven territory required both vision and courage.
This period also saw initial forays into rechargeable batteries, with construction of the Cheonan plant in 1995 to support PDP alongside small lithium-ion cells for mobile devices. The Cheonan plant represented Samsung SDI's bet on two parallel futures: plasma display panels for large-screen televisions and lithium-ion batteries for the emerging mobile electronics market.
Why batteries? The answer lay in the explosive growth of portable electronics. Mobile phones, laptop computers, and handheld devices were proliferating, and all of them needed power sources that were lightweight, rechargeable, and energy-dense. Samsung SDI's battery business began in earnest in November 1997 with the operation of a pilot line at its Cheonan factory. In March 2000, the company completed construction of a dedicated battery facility at the same site and began trial production. By July, mass production was underway.
The timing was fortuitous but not accidental. Japan's Sony had commercialized the lithium-ion battery in 1991, creating a new category of energy storage that was rapidly improving. Samsung SDI saw an opportunity to apply its manufacturing expertise to a fast-growing market where Korean companies could compete.
The mass-produced 2000mAh cylindrical battery outperformed the standard 1600mAh models commonly found on the market at the time. It demonstrated Samsung SDI's technological capabilities just three years after the pilot line launch.
This achievement—surpassing established players' energy density within just three years—signaled that Samsung SDI's pivot was working. The company wasn't just entering the battery market; it was positioning itself to lead it.
In December 1999, the company rebranded as Samsung SDI Co., Ltd., consolidating its display devices and investment arms to emphasize technology differentiation in electronics. The name change reflected a broader transformation: Samsung SDI was no longer just a display company with a battery side business. It was becoming an energy solutions company that happened to also make displays.
The strategic logic was compelling. Both display and battery businesses shared common elements: precision manufacturing, chemical process expertise, and the ability to scale production rapidly. Samsung SDI could leverage its existing capabilities while building entirely new product categories.
But the pivot also carried significant risks. The battery market was intensely competitive, dominated by Japanese players with years of head start. Samsung SDI was investing billions in new facilities while its core display business faced accelerating decline. If the battery bet failed, the company could find itself without either a past or a future.
V. Small Battery Dominance & The Electronic Materials Business (2000–2010)
The first decade of the new millennium proved Samsung SDI's pivot was not just viable—it was a master stroke. In 2010, Samsung SDI sold 780 million small batteries, securing the No. 1 position in the global market with over 20% share. This achievement was the result of continued efforts, including the development of the world's highest-capacity cylindrical batteries—2,400mAh in 2003 and 2,600mAh in 2004—and the launch of the world's first 200ppm high-speed assembly line in 2007.
What made this achievement remarkable was its speed. In less than a decade, Samsung SDI went from battery industry newcomer to global leader. The company's approach combined three elements: relentless investment in R&D, aggressive manufacturing scale-up, and deep integration with Samsung Electronics' booming mobile device business.
The connection to Samsung Electronics proved invaluable. As the Galaxy smartphone series took off in the late 2000s, Samsung SDI had a built-in customer for its most advanced battery technology. This captive demand provided a foundation for production volumes while funding continued R&D investment.
Samsung SDI's electronic materials business gained full momentum in 2002 with the completion of a mass production line at the Gumi factory. The company first established production systems for key materials such as CMP slurry for semiconductor wafer polishing, EMC for semiconductor packaging, and electrolytes for batteries. In 2003, the expansion of the CMP slurry plant marked the beginning of broader business growth into semiconductor, display, and battery materials.
This vertical integration into materials represented a crucial strategic move. Rather than remaining dependent on external suppliers for critical inputs, Samsung SDI began manufacturing its own. This provided several advantages: greater control over supply chains, deeper understanding of material science, and the ability to optimize materials for specific applications.
The electronic materials business also created synergies across Samsung Group. CMP slurries served Samsung Electronics' semiconductor fabs; OLED materials supported Samsung Display's production; battery electrolytes fueled Samsung SDI's own cell manufacturing. This interconnected web of supply relationships created both efficiency and resilience.
Despite these accomplishments, Samsung SDI also struggled during the recent economic recession. Their CRT division business was underperforming, and demand for PDP was decreased due to the recession. The gross revenue in 2004 was $8.01 billion, and this amount fell by $864 million each following year. Their operating profit fell from 8.3 percent in 2004 to 2.0 percent in 2006.
The decline in display revenue underscored both the wisdom and urgency of the battery pivot. CRT volumes were collapsing globally, and plasma displays—Samsung SDI's bet on large-screen flat panels—were losing the technology war against LCDs. Without the battery business, Samsung SDI would have faced a crisis.
The decade ended with Samsung SDI firmly established as a battery powerhouse, but a new opportunity was emerging. Electric vehicles were transitioning from science fiction to commercial reality, and the batteries that powered them would be orders of magnitude larger than anything used in smartphones. Samsung SDI's experience with small batteries had created technical foundations—but automotive batteries would require entirely new capabilities.
VI. The Bosch Partnership & EV Ambitions (2008–2012)
The automotive industry in 2008 stood at a crossroads. Oil prices had spiked to record highs, environmental concerns were intensifying, and major automakers were scrambling to develop electric vehicle programs. For battery makers, this represented an opportunity of unprecedented scale—but also unprecedented technical demands.
SB LiMotive is a 50:50 joint venture between Samsung SDI and Robert Bosch GmbH. The joint venture developed and manufactured lithium-ion batteries for use in hybrid, plug-in hybrid vehicles and electric vehicles.
Robert Bosch GmbH and Samsung SDI Co. Ltd. established a joint venture to develop, manufacture, and sell lithium-ion batteries for automotive applications. The joint venture—SB LiMotive Co. Ltd.—was headquartered in Korea and started operations in September 2008, with production beginning in 2010.
This partnership combined complementary strengths. Samsung SDI brought lithium-ion cell manufacturing expertise; Bosch contributed automotive systems integration, battery management know-how, and—perhaps most importantly—relationships with European automakers. Together, they could offer what neither could deliver alone: complete battery solutions validated for automotive applications.
In 2009, BMW selected SB LiMotive, a joint venture between Bosch and Samsung SDI, as the battery supplier for its "MegaCity" vehicle—what would become the BMW i3 and then the i line. In 2012, however, the partners announced they were disbanding the joint venture.
The BMW contract represented a breakthrough. Supplying batteries for a premium German automaker's flagship electric vehicle program signaled that Samsung SDI had reached the technical level required for automotive applications. SB LiMotive would supply lithium-ion battery cells to BMW for its electric vehicles, which were part of the "Megacity Vehicle" project. The German automaker would install the battery cells into the EVs, which would go into series production in 2013.
In November 2010, Samsung SDI completed a 34,000 m² production line for electric vehicle batteries at its Ulsan factory. Construction began in September 2009 and was completed in just over a year. Mass production of EV batteries began in 2011. Even before the full-scale operation of the plant, Samsung SDI had already secured an order with BMW for EV batteries, marking a significant achievement in the business.
But the SB LiMotive partnership was not destined to last. In March 2012, after four years, the dissolution of the joint venture was announced. Bosch received about 45 million Euros from Samsung, while Samsung kept the lithium-ion cell production site in Ulsan and the development center in Giheung. Bosch absorbed the battery-system business section in Stuttgart-Feuerbach.
What caused the split? Strategic divergence. Samsung SDI wanted to expand aggressively in battery cells; Bosch was more interested in systems integration and battery management. Rather than remaining locked in a partnership with conflicting priorities, both companies chose to pursue their strategies independently.
Samsung SDI bought out Bosch's 50% stake in the venture; in turn, Bosch acquired SB LiMotive's US and German subsidiaries. Samsung SDI has developed a complete nickel-cobalt-manganese (NCM) battery cell platform portfolio and is capable of mass-producing various advanced automotive prismatic battery cells.
The dissolution proved fortunate for Samsung SDI. By taking full control of the Ulsan production facility and Giheung R&D center, the company gained freedom to pursue its automotive battery strategy without partner constraints. More importantly, the BMW relationship—which had begun through the joint venture—continued and deepened under Samsung SDI's independent management.
VII. Full Commitment to EV Batteries & The Cheil Merger (2012–2017)
With the Bosch partnership dissolved, Samsung SDI faced a clarifying moment: commit fully to automotive batteries or remain a diversified components company. It chose the former, launching one of the most aggressive transformation programs in Korean industrial history.
The investment scale was staggering. Samsung SDI poured approximately 1.6 trillion KRW (around $1.4 billion) into enhancing research and production capabilities for electric vehicle batteries. These weren't incremental expenditures—they represented a fundamental reorientation of the company's capital allocation.
Samsung SDI announced the cessation of plasma panel production in June 2014, citing reduced global PDP market viability as LCD and emerging OLED panels captured share. The company had already transferred or discontinued OLED and PDP lines in prior years to prioritize battery operations.
The plasma shutdown carried symbolic weight. Samsung SDI was formally exiting the display business that had defined its identity for four decades. The company was betting its future entirely on energy solutions.
But the most transformative move came in the form of a merger. Samsung SDI bought Cheil Industries for 3.5 trillion won ($3.3 billion) in stock in 2014. Cheil investors received about 0.44 of a share in the enlarged SDI for each share they owned.
Samsung SDI, a display panel and battery maker of Samsung Group, merged with Cheil Industries. The merger made Samsung SDI the surviving entity, as the group sought to create a total materials and energy solutions company. Cheil Industries, which began as a textile maker, dissolved 60 years after it began operations.
Samsung SDI was in dire need of promoting material competitiveness, the original source of battery business to grow and develop into a world class eco-friendly company. Cheil Industries was seeking to foster energy and automotive materials in addition to semiconductor and display materials as new growth engines. The recent merger was the result of their respective common interests. This merger was expected to enable Samsung SDI to boost its competence in battery business by adopting a variety of material element technologies retained by Cheil Industries, including battery separation membrane.
The industrial logic was compelling. Battery performance depends critically on materials—cathodes, anodes, separators, and electrolytes. By integrating Cheil's materials capabilities, Samsung SDI gained deeper control over the battery value chain and accelerated its technology development.
Samsung SDI said that it expected the new company to achieve annual sales of 10 trillion won ($9.4 billion), and sought to increase sales to over 29 trillion won by 2020 by generating synergy between SDI's lithium-ion batteries and Cheil's materials. The move made Samsung SDI the group's sixth-biggest affiliate.
The merged entity emerged as a vertically integrated energy and materials company—capable of developing proprietary materials, manufacturing advanced battery cells, and serving the most demanding automotive customers. This integration would prove essential as competition intensified.
With the domestic foundation secured, Samsung SDI turned its attention to global manufacturing. In May 2017, the company completed construction of its EV battery plant in Hungary and began mass production the following year—establishing a crucial European manufacturing base to serve premium automakers like BMW and Volkswagen.
VIII. The Premium OEM Strategy & Global Expansion (2017–2023)
Samsung SDI's automotive battery strategy differed fundamentally from competitors like CATL, which pursued volume across the market. Instead, Samsung SDI positioned itself as the premium supplier—focusing on high-end vehicles where battery performance, safety, and energy density commanded premiums.
Samsung SDI and BMW have maintained their collaborative relations since 2009 when the German automotive group chose the Korean battery supplier. BMW's partnership with Samsung SDI dates back to 2009, when the Koreans were selected by BMW as a battery supplier.
This fifteen-year partnership represents one of the most enduring relationships in the EV battery industry. BMW's i3, i4, i5, i7, and iX all use Samsung SDI batteries. The relationship has deepened over time, with joint development of new battery technologies and now extending into solid-state battery validation.
The partnership with Samsung SDI since 2009 provides the BMW Group with access to state-of-the-art lithium-ion battery technology. Another important factor in the choice of Samsung SDI was that the company considers the suitability of lithium-ion battery cells for environmentally-friendly production and subsequent recovery of materials during product development.
The European manufacturing presence in Hungary became central to serving premium automakers. Built in several phases starting in 2017, the Hungary plant initially cost over two trillion won (approximately €1.3 billion). It currently has an annual capacity of 40 GWh, which is sufficient to produce batteries for around 600,000 mid-size vehicles per year.
North American expansion came through a different model: joint ventures with automakers. Stellantis N.V. and Samsung SDI announced that they have executed binding, definitive agreements to establish an electric-vehicle battery manufacturing facility in Kokomo, Indiana, U.S. Targeted to start in 2025, the plant aimed to have an initial annual production capacity of 23 gigawatt hours (GWh), with an aim to increase to 33 GWh.
Stellantis and Samsung SDI announced that Kokomo, Indiana, would be the site for a second battery manufacturing facility in the United States as part of the StarPlus Energy joint venture. The new StarPlus Energy plant is expected to begin production in early 2027 with an annual capacity of 34 gigawatt hours (GWh).
StarPlus Energy, a joint venture between Stellantis and Samsung SDI, finalized its $7.54 billion loan from the Department of Energy to build two lithium-ion battery plants in Kokomo, Indiana. The project will create approximately 3,200 construction jobs and up to 2,800 operations jobs at the plants. At full scale, the plants will produce 67 GWh of batteries annually, enough to power 670,000 electric vehicles.
The General Motors partnership added another major American customer. Samsung SDI announced that the company has completed and signed an agreement with General Motors to establish a joint venture to supply electric vehicle batteries in the United States. The two companies will invest approximately $3.5 billion in an EV battery plant with an initial capacity of 27GWh up to 36GWh and a production target of 2027.
The facility—expected to cost $3.5 billion, up from the $3 billion originally projected—will have an initial capacity of 27 gigawatt hours with the capability of expanding up to 36 gigawatt hours. GM is planning to build nickel-rich prismatic and cylindrical cells at the Samsung JV plant.
Perhaps most significantly, Samsung SDI broke into the Korean automaker market for the first time. Samsung SDI will supply prismatic batteries for Hyundai Motor's electric vehicles targeting Europe for 7 years starting from 2026. P6 batteries featuring maximized energy density will be manufactured at Samsung SDI's Hungary plant for Hyundai supplies.
Samsung SDI said it has signed its first supply agreement with Hyundai Motor Co. to become the South Korean carmaker's third domestic battery supplier after LG Energy Solution and SK On. Their seven-year supply deal will diversify Hyundai's battery form factor into prismatic batteries.
Under the deal, Samsung SDI will supply prismatic batteries produced at its Hungary plant for Hyundai EVs made in Europe for seven years, from 2026 through 2032. Although the exact size of the deal was not disclosed immediately, industry sources predict that Samsung SDI could supply batteries to power up to 500,000 high-performance EVs.
IX. The ESS Business & AI-Driven Demand (2020–Present)
While electric vehicles captured headlines, Samsung SDI was quietly building another growth engine: energy storage systems. Batteries for energy storage systems (ESS) generated a record high revenue in the fourth quarter of 2024, driven by increased sales of batteries to be used for ESS for power and uninterruptible power supplies (UPS), backed by growing power demand for data centers amid strong AI adoption in North America.
"A significant growth is anticipated for the ESS market as the renewable energy market expands and demand for data centers surge in line with the accelerating AI revolution," said Yoon-ho Choi, President and CEO of Samsung SDI. "Samsung SDI will cement its leadership in the global ESS market, including the United States, with its 'Super Gap' technological competitiveness."
The AI boom has created insatiable demand for data center power—and data centers need both grid-scale storage and uninterruptible power supplies to operate reliably. Samsung SDI's two-track strategy of NCA and LFP chemistries for utility ESS products is set for 2026, along with high-power cells for UPS to accommodate data center demand. Samsung's battery-making arm plans to employ a two-track strategy that parallels and complements high-energy NCA batteries with LFP batteries for utility-scale ESS products.
The energy storage system unit had both revenue and profit go up in the second quarter thanks to robust sales of high-power products for the uninterruptible power system (UPS) solution as well as Samsung Battery Box, Samsung SDI's containerized ESS product for a utility-scale solution. This came amid booming data center demand propelled by the rise of artificial intelligence, on top of expanding renewable energy push.
South Korean battery makers and material suppliers, which have been struggling with sluggish electric-vehicle demand, are increasingly turning their focus to the booming energy storage system market, driven by the rapid expansion of artificial intelligence. The AI boom is fueling demand for ESS batteries and data centers to train AI models and operate relevant applications. "Unlike the unstable EV demand, the ESS demand remains very robust," NH Investment & Securities analyst Ju Min-woo wrote.
The flagship product is the Samsung Battery Box (SBB) 1.5. Designed with high spatial efficiency, SBB 1.5 loads 5.26 megawatt hour (MWh) per unit, increasing the energy density by 37% from its predecessor. Up to four units of the all-in-one battery enclosure can be assembled together. Another notable feature of SBB 1.5 is its enhanced direct injection system where embedded fire extinguishing agents get sprayed directly onto modules for fire suppression.
Samsung SDI has expanded partnerships with the top three independent power producers (IPP) in the U.S. This positioning in the utility-scale market provides a significant hedge against EV market volatility—and positions Samsung SDI to benefit from the massive infrastructure investments accompanying the AI revolution.
The ESS business also offers different economics than automotive. While EV battery prices face relentless pressure from Chinese competition, stationary storage customers often prioritize reliability, safety, and long-term support over pure cost. Samsung SDI's premium positioning translates more naturally to ESS than to the increasingly commoditized EV market.
X. The Solid-State Battery Bet (2023–Future)
The holy grail of battery technology—solid-state batteries—has tantalized engineers for decades. By replacing liquid electrolytes with solid materials, these batteries promise higher energy density, faster charging, improved safety, and longer life. Every major battery maker and automaker is racing to commercialize them. Samsung SDI believes it can win that race.
In March 2022, Samsung SDI started its launch of Korea's first all-solid-state battery (ASB) pilot line, a 6,500-square-meter 'S-line', at the SDI R&D Center located in Suwon. In 2023, Samsung SDI supplied samples of ASB produced at the S-line to customers and aims to mass-produce them in 2027.
Samsung SDI's ASB uses its proprietary solid electrolyte material and innovative anode-less technology to reduce the volume of the anode and increase the energy density. Samsung SDI's All Solid Battery has the energy density of 900Wh/L, which is 40 percent higher than prismatic batteries currently in mass production. If installed in the same vehicle, they can save more space and reduce weight.
The 900Wh/L energy density target represents a quantum leap. Current lithium-ion batteries typically achieve 500-700Wh/L—meaning solid-state could extend EV range by 30-40% without increasing battery size or weight.
Samsung SDI unveiled ultra-fast charging technology that reaches 80% charge from 8% in just 9 minutes, an unprecedented feat in the industry. This feature is made possible by optimizing lithium-ion transfer path and enabling low resistance. The company aims to carry this technology development to a mass-production phase by 2026.
Samsung SDI, known as the leader of the all solid-state battery industry, provided samples of its ASB for multiple customers, and is progressing smoothly for mass production in 2027.
The most significant validation came in October 2025. Samsung SDI announced it has signed a trilateral agreement with Germany's BMW and US-based battery materials company Solid Power to conduct a validation project for all-solid-state batteries in automobiles. Under the agreement, Samsung SDI will supply all-solid-state battery cells using Solid Power's solid electrolyte, which offers improved energy density and enhanced safety. Based on these cells, BMW will develop battery modules and packs and carry out demonstration testing.
The three companies will jointly evaluate the performance of the batteries under agreed parameters and integrate them into BMW's next-generation evaluation vehicles. Unlike conventional lithium-ion batteries that use liquid electrolytes, ASSB cells rely on solid electrolytes, offering improved safety and higher energy density.
By late 2023, BMW had received its first "A-sample" solid-state cells, and earlier this year, a BMW i7 prototype running Solid Power's sulfide-based electrolyte was reportedly being tested in Munich. This latest announcement adds Samsung SDI to the mix—an important step toward scaling the technology.
While the i7 mentioned above still used pilot cells from Solid Power manufactured on a very small scale, the current tests with Samsung SDI also involve a larger battery manufacturer. This means the focus is no longer on functional tests of pure prototype batteries, but on cells manufactured by a large-scale manufacturer with a view to further commercialization.
The solid-state bet carries enormous stakes. If Samsung SDI can achieve mass production by 2027 as planned, it could leapfrog competitors and establish lasting leadership in next-generation batteries. But the technology challenges remain formidable—no company has yet demonstrated the ability to mass-produce solid-state batteries at automotive scale and cost.
XI. Current Challenges & Market Position
For all its technological achievements, Samsung SDI faces significant headwinds. Samsung SDI (29.6 GWh) and Panasonic (35.1 GWh) recorded losses compared to 2023. Most players recorded double-digit growth rates, except Samsung SDI and Panasonic. They were the only companies to lose ground. Business stagnated at LGES.
Despite overall growth in total battery usage, the market share of the three major domestic battery companies dropped to 45.6%, down 2.7 percentage points from the previous year. LG Energy Solution continued to rank second globally with 84.2GWh, while Samsung SDI ranked fifth with 28.9GWh, a 0.4% increase, and a market share of 8.9%.
Three Korean electric vehicle battery makers saw their combined global market share fall from a year earlier in the first 10 months of 2024 amid robust growth of Chinese rivals. The trio—LG Energy Solution, SK On and Samsung SDI—held a combined 20.2 percent of the global EV battery market in the January-October period, down 3.5 percentage points from a year earlier. Chinese makers CATL and BYD saw their combined share reach 53.6 percent.
The Chinese dominance is stark. CATL continued to be the world's largest power battery manufacturer in 2024, with a 37.9 percent share above the 36.6 percent in 2023. BYD's share of 17.2 percent in 2024 was also higher than the 15.8 percent in 2023.
In the competition between Chinese and Korean companies, the momentum clearly lies with the Chinese. The leading duo CATL and BYD alone have a global market share of 55 per cent; if the other Chinese manufacturers that made the top 10 are included, this figure climbs to 67.1 per cent.
Samsung SDI's specific challenges include weakening demand from key customers. Samsung SDI experienced a 10.4% decrease, dropping from fourth to sixth place compared to last year. SNE Research explained that the sales of major models equipped with Samsung SDI batteries, such as BMW i4, i5, i7, and iX, have slowed down.
The financial impact has been severe. Samsung SDI endured a difficult 2024, with revenue tumbling -24% year-on-year and operating income declining –78%. The downturn was driven by higher interest rates and reduced consumer subsidies, which curbed demand for electric vehicles. The company's EV battery segment struggled, while the energy storage system business emerged as a bright spot.
In the fourth quarter, the revenue totaled 3.75 trillion won, while the company recorded an operating loss of 256.7 billion won. The battery business posted 3.56 trillion won in revenue in the fourth quarter, reflecting a 28.7 percent decrease year-on-year. The operating loss was 268.3 billion won.
Samsung SDI plans to suspend cash dividends for three years starting in 2025 and focus its resources on strengthening its growth engines. The company anticipates free cash flow to remain negative due to continued facility investments for mid- to long-term growth.
The company is responding on multiple fronts: expanding ESS business to offset EV weakness, accelerating solid-state development, establishing LFP production capabilities, and deepening relationships with premium automakers. Whether these moves prove sufficient against Chinese scale advantages remains the central question for investors.
XII. Playbook: Business & Strategic Lessons
Samsung SDI's 55-year journey offers a masterclass in industrial transformation. Several strategic patterns recur:
The Pivot Playbook: Samsung SDI has executed two major technology pivots—from CRTs to flat panels/batteries in the 1990s, and from displays to pure energy focus in the 2010s. Both pivots required investing heavily in new capabilities while legacy businesses remained profitable. The key was treating transformation as a multi-year process, not a sudden switch, while maintaining organizational focus on the future rather than defending the past.
Vertical Integration: From battery cells to cathode materials, Samsung SDI has systematically integrated upstream. The Cheil Industries merger added materials capabilities; joint ventures with suppliers like EcoPro EM deepened control over the supply chain. This integration provides cost advantages, technology control, and supply security—though it also increases capital intensity and operational complexity.
Partnership Strategy: The contrast between the Bosch partnership (dissolved after four years) and the BMW partnership (thriving for 15+ years) illuminates what makes industrial partnerships work. The Bosch venture had conflicting strategic priorities; the BMW relationship aligned both parties' interests around technology excellence and premium positioning. Industry observers say BMW chose Samsung SDI as its partner based on long-standing trust built through their partnership since 2009.
Premium vs. Volume: Samsung SDI chose to compete on technology and quality rather than scale and cost. This premium positioning made sense given CATL's massive scale advantages in the volume market. But it also constrained growth during the EV market slowdown, when customers became more price-sensitive.
Geographic Diversification: Samsung SDI built a global manufacturing footprint—Korea for R&D and pilot production, Hungary for Europe, Indiana (through JVs) for North America. Samsung SDI has announced plans to expand and modernise its plant in Göd, Hungary so that the factory can begin producing prismatic batteries for Hyundai and Kia EVs in Europe.
The company aims to increase its EV battery production capacity to reach 200 GWh by 2030, with projected investments of an additional $9 billion—a significant increase from its current capacity of approximately 60 GWh.
XIII. Porter's Five Forces Analysis
| Force | Analysis |
|---|---|
| Threat of New Entrants: MEDIUM-HIGH | High capital requirements ($2B+ for a gigafactory) and technological complexity create barriers, but Chinese government subsidies enable new entrants like CATL and BYD to scale rapidly; Tesla's in-house 4680 cells show OEM vertical integration threat |
| Bargaining Power of Suppliers: MEDIUM | Critical raw materials (lithium, cobalt, nickel) are concentrated; Samsung SDI's vertical integration into cathode materials reduces dependency; In September 2024, Samsung SDI sold its polarizing film business to China's Wuxi Hengxin for approximately 1.12 trillion won (~$836 million), enabling sharper focus on battery materials. |
| Bargaining Power of Buyers: HIGH | Premium automakers (BMW, Stellantis, Hyundai) have significant leverage and can switch suppliers; Samsung SDI will supply prismatic batteries for Hyundai Motor's EVs targeting the European market from 2026 to 2032—long-term contracts reduce buyer power |
| Threat of Substitutes: MEDIUM-LOW | Lithium-ion is the dominant technology; hydrogen fuel cells and other alternatives remain niche; solid-state is evolution not substitution; LFP chemistry is a substitute threat from China |
| Industry Rivalry: VERY HIGH | Intense competition among LG Energy Solution, SK On, CATL, BYD, Panasonic; Major players including LG Energy Solution, Samsung SDI, SK On, BYD, and CATL have been vying for dominance through technological advancements including improvements in energy density, charging speed, and cost reduction. |
XIV. Hamilton's Seven Powers Analysis
| Power | Samsung SDI Assessment |
|---|---|
| Scale Economies | ⚠️ WEAK: At ~60 GWh capacity vs. CATL's 300+ GWh, Samsung SDI lacks scale advantages; pursuing 200 GWh by 2030 to close gap |
| Network Effects | ⚠️ WEAK: Limited network effects in battery manufacturing; some ecosystem benefits within Samsung Group (Samsung Electronics, Samsung Electro-Mechanics) |
| Counter-Positioning | âś… MODERATE: Premium focus (BMW, Stellantis) vs. Chinese volume strategy creates different value proposition; solid-state focus as differentiator |
| Switching Costs | ✅ STRONG: Samsung SDI and BMW have maintained their collaborative relations since 2009—15+ year relationships create high integration costs; battery pack design requires years of joint development |
| Branding | âś… MODERATE: Samsung brand carries quality associations; premium OEM partnerships reinforce positioning |
| Cornered Resource | ⚠️ WEAK: No exclusive access to critical raw materials; solid-state IP could become cornered resource if commercialized successfully |
| Process Power | âś… MODERATE: Proprietary manufacturing know-how for prismatic cells; vertical integration into materials provides process advantages; Samsung SDI aims to implement industry-top level energy density using proprietary solid electrolyte and anode-less technologies |
XV. Bull & Bear Cases
Bull Case:
Samsung SDI is positioned at the intersection of three transformative trends: electrification of transportation, renewable energy storage, and AI-driven data center growth. The global battery market for electric vehicles is expected to grow by about 21 percent in 2025, while the ESS battery market is expected to grow by about 14 percent, led by North America.
The solid-state battery opportunity could be transformational. Samsung SDI, known as the leader of the all solid-state battery industry, is progressing smoothly for mass production in 2027. If the company achieves commercial-scale solid-state production before competitors, it could command premium pricing and capture significant share in the $200B+ annual battery market.
Premium OEM relationships provide durable competitive advantages. The BMW partnership extending to solid-state validation, the Hyundai seven-year supply contract, and the GM and Stellantis joint ventures create a diversified customer base with sticky relationships. These partnerships involve years of co-development and integration work that competitors cannot easily replicate.
The ESS pivot provides a hedge against EV market volatility while tapping into AI infrastructure spending. "Unlike the unstable EV demand, the ESS demand remains very robust," according to NH Investment & Securities.
Bear Case:
Chinese competition presents an existential threat. CATL and BYD alone have a global market share of 55 per cent; if other Chinese manufacturers are included, this climbs to 67.1 per cent. Samsung SDI's premium positioning may not survive in an increasingly commoditized market where Chinese players achieve both scale and technology parity.
Samsung SDI was the only company among the top 10 to experience negative growth, with its market share dropping from 4.7% in 2024 to 3.2% in 2025 due to an overemphasis on solid-state batteries. Moreover, Samsung SDI is expected to incur an operating loss of 398 billion won (approximately 2.06 billion yuan) in 2025.
Solid-state commercialization risks are significant. Despite decades of research industry-wide, no company has demonstrated mass production capability. If Samsung SDI's 2027 target slips or competitors reach commercialization first, the company's technology bet may not pay off.
The EV market slowdown may persist. Visible Alpha consensus estimates show a -8% revenue decline in 2025, with sales from its core lithium-ion battery business expected to drop -9%. Premium automaker sales of vehicles using Samsung SDI batteries have weakened, and the company lacks exposure to the growing volume EV segment.
XVI. Key Performance Indicators to Monitor
For investors tracking Samsung SDI's ongoing performance, three KPIs stand out as most critical:
1. Premium Battery Capacity Utilization Rate: LG Energy Solution's utilization rate in the third quarter of 2024 fell to 60% from 73% in the same period of 2023. SK On's utilization rate hit a record low of 46%, down from 95%. Samsung SDI's utilization rate for small batteries decreased by 9 percentage points to 68%. Capacity utilization directly impacts profitability—fixed costs remain regardless of production volumes. Recovering utilization above 75-80% would signal improving demand from automotive customers and better absorption of overhead.
2. ESS Revenue Growth & Mix: Batteries for energy storage systems generated a record high revenue in the fourth quarter 2024. As ESS becomes a larger portion of revenue, track both absolute growth and margin contribution. ESS typically commands better pricing than commodity EV batteries and provides diversification from automotive cyclicality. Target: ESS reaching 25-30% of total revenue would represent meaningful hedging against EV volatility.
3. Solid-State Battery Commercialization Milestones: Progress toward the 2027 mass production target is the highest-stakes bet in Samsung SDI's portfolio. Key milestones include: customer validation results, pilot line capacity expansion, cost reduction progress, and new OEM agreements for solid-state applications. Any delays or technical setbacks would signal risk; acceleration or new commercial partnerships would be highly positive catalysts.
XVII. Conclusion
Samsung SDI's story is one of relentless reinvention—from vacuum tubes to CRTs to batteries, from black-and-white televisions to electric vehicles, from a Japanese joint venture to a global energy solutions company. Each transition required abandoning what had worked in the past to pursue an uncertain future.
Today, Samsung SDI faces perhaps its most significant challenge: maintaining relevance against Chinese competitors with massive scale advantages while betting heavily on solid-state technology that may take years to commercialize. The company has suspended dividends, invested billions in new capacity, and restructured operations—all while reporting operating losses.
Yet the strategic foundations remain sound. Premium OEM relationships built over 15+ years create barriers that Chinese competitors cannot easily breach. Vertical integration into materials provides technology advantages and supply security. The ESS pivot taps into AI-driven demand that shows no signs of slowing. And if solid-state batteries achieve commercial viability, Samsung SDI's early leadership could reshape the entire industry.
For investors, Samsung SDI represents a concentrated bet on premium positioning in battery technology—with significant risks from Chinese competition and solid-state execution, but also significant upside from technology leadership and diversification into high-growth markets. The next three to five years will determine whether Samsung SDI's latest transformation succeeds as brilliantly as its previous pivots—or whether the company that mastered the transition from displays to batteries will struggle with the transition from lithium-ion to solid-state.
The 55-year journey from that first vacuum tube on May 16, 1970, continues. What happens next depends on whether Samsung SDI can once again do what it has done twice before: see the future clearly, bet on it decisively, and execute with the manufacturing excellence that has defined the company since its founding.
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