Samsung SDI has secured a multi-year supply of LFP cathode materials from L&F, strengthening its North American energy storage system (ESS) strategy and reducing reliance on Chinese suppliers. The deal could influence global ESS supply chains, US regulatory compliance, and competitive dynamics in large-scale battery manufacturing and procurement.
Samsung SDI announced a mid- to long-term supply agreement with L&F for cathode materials used in lithium iron phosphate batteries. Under the contract, Samsung SDI will receive materials worth approximately KRW1.6 trillion (approx. US$1.06 billion) over three years starting next year, with an option to extend the supply for an additional three years. The materials are intended for the production of LFP batteries for ESS applications.
The company plans to use the LFP cathode materials at StarPlus Energy, its joint venture with Stellantis in Indiana, US. StarPlus Energy has been converting part of its production lines from electric vehicle batteries to ESS batteries since the fourth quarter of last year. The facility is expected to begin mass-producing LFP batteries alongside existing high-nickel NCA batteries beginning in the fourth quarter of this year.
Samsung SDI framed the supply deal as a step toward establishing a more stable domestic materials supply chain and bolstering its competitiveness in the North American ESS market. L&F announced in August last year a new investment in LFP cathode materials, becoming the first company outside China to do so, and is building production capacity of 60,000 tons per year.
The agreement comes amid industry efforts to diversify away from Chinese suppliers for LFP cathode materials, driven in part by tightening US rules on products manufactured in China, including those related to Prohibited Foreign Entities. Observers view supply chain diversification and local sourcing as increasingly important for compliance and market access in the US.
Samsung SDI has been expanding its North American footprint through several large ESS supply contracts. Late last year, it signed a KRW 2 trillion contract to supply LFP batteries for ESS to a major US energy developer and operator, and on March 16, it announced another KRW 1.5 trillion ESS battery supply deal with a US energy company. The company attributes interest to the quality of its prismatic batteries, which use a proprietary stacking process and in-house safety technologies such as No Thermal Propagation and Enhanced Direct Injection. At InterBattery 2026, Samsung SDI introduced its PrismStack prismatic battery technology.
"In response to growing demand for supply chains that are less dependent on China, we proactively signed a supply agreement with a domestic materials partner," a company official said. "Through this partnership, we expect further to strengthen our competitiveness in the North American market and create additional business opportunities."
Article edited by Jack Wu
