Samsung SDI Plans Earliest June 2027 Mass Production of LFP Batteries for AI Server BBUs

According to a report by The Korea Herald on October 13, Samsung SDI plans to begin mass-producing cylindrical lithium iron phosphate (LFP) batteries for AI server Battery Backup Units (BBUs) as early as June 2027 at its second factory in Malaysia. This marks the company's first application of LFP chemistry to cylindrical backup batteries, aiming to leverage LFP's cost competitiveness and thermal stability to accelerate its push into the fast-growing data center battery market.

Samsung SDI previously unveiled samples of this cylindrical LFP battery, based on proprietary structural technology, at Data Centre World Asia 2026 in Singapore in late September. The new investment will enable the Malaysian plant to produce both nickel-cobalt-manganese (NCM) and LFP batteries for BBUs. To prevent cross-contamination of raw materials, the facility will install new equipment such as mixers and blending tanks, while maximizing the use of existing production lines for other processes.

The move is expected to boost utilization rates in Samsung SDI's small battery division. Weak demand for electric vehicle and power tool batteries limited the facility's utilization to 50.4% last year, though it rebounded to 73% in the first half of this year. As structural demand for high-output, safe BBUs grows with the expansion of AI servers, introducing LFP options provides customers with broader choices and could support a turnaround in the division's profitability.