Samsung SDI

South Korea's EV Battery Giant and Major DRC Cobalt Consumer

Official website: www.samsungsdi.com

Overview

Samsung SDI is one of the world's largest manufacturers of lithium-ion batteries for electric vehicles and energy storage systems, and a significant downstream consumer of cobalt originating from the Democratic Republic of Congo. A subsidiary of the Samsung Group conglomerate, the company has evolved from its origins in consumer electronics into a cornerstone of the global EV battery supply chain, competing directly with Chinese giants CATL and BYD, as well as its South Korean rival LG Energy Solution.

With an estimated 6 to 7 percent share of the global EV battery market in 2025 and approximately $14 billion in annual revenue, Samsung SDI occupies the critical middle segment of the battery supply chain where African-sourced critical minerals are transformed into the energy storage units powering the global electric vehicle transition. The company's primary battery chemistries rely on nickel-manganese-cobalt (NMC) cathodes, making it one of the world's largest industrial consumers of refined cobalt. This dependency connects Samsung SDI directly to the Lobito Corridor through the cobalt supply chains that originate in the mines of the DRC's Copperbelt and travel through intermediary refiners before reaching Samsung SDI's cell manufacturing plants.

Samsung SDI's strategic importance extends beyond pure market share. Its partnerships with European and American automakers, particularly BMW and Stellantis, place the company at the centre of Western efforts to build EV supply chains that are less dependent on Chinese processing and manufacturing. The company's manufacturing expansion into Hungary and the United States, including its StarPlus Energy joint venture with Stellantis in Kokomo, Indiana, reflects the broader geopolitical competition over battery supply chain localisation that is reshaping how DRC minerals flow through global value chains.

DRC Cobalt Supply Chain Dependencies

Samsung SDI's connection to the Lobito Corridor is primarily through its consumption of cobalt, the critical mineral that remains essential to the NMC battery cathodes at the heart of the company's product line. The DRC produces approximately 75 percent of the world's mined cobalt, and Samsung SDI's estimated annual consumption of 3,000 to 5,000 tonnes of cobalt makes it one of the largest downstream consumers of this mineral globally.

The pathway from DRC mine to Samsung SDI battery cell involves multiple intermediaries and processing stages. Cobalt mined in the DRC, predominantly as a by-product of copper mining at operations such as Glencore's Kamoto and Mutanda mines, CMOC Group's Tenke Fungurume, and various artisanal mining operations, is processed into cobalt hydroxide or cobalt metal, often refined in China, before being converted into cathode precursor materials and ultimately cathode active materials that Samsung SDI uses in cell production.

Cathode Chemistry and Cobalt Intensity

Samsung SDI's flagship EV battery products use NMC (nickel-manganese-cobalt) cathode chemistries, with the company having transitioned through successive generations that progressively reduce cobalt content per kilowatt-hour. The evolution from NMC 111 (equal parts nickel, manganese, and cobalt) to NMC 622 and NMC 811 (80 percent nickel, 10 percent manganese, 10 percent cobalt) has reduced cobalt intensity, but the sheer growth in battery production volumes means that Samsung SDI's absolute cobalt demand has remained substantial and is projected to grow through the end of the decade.

The company has also developed nickel-rich NMC 9-series cathodes for premium applications, further reducing cobalt ratios. However, even at reduced percentages, the scale of EV battery production required to meet automaker commitments means that thousands of tonnes of cobalt continue to flow through Samsung SDI's supply chain annually. Each gigawatt-hour of NMC 811 battery capacity requires approximately 60 to 80 kilograms of cobalt, and Samsung SDI's annual production capacity exceeds 50 GWh, with expansion plans targeting over 100 GWh by 2028.

Supply Chain Mapping and Traceability

The multi-layered nature of Samsung SDI's cobalt supply chain presents significant traceability challenges. Between the DRC mine and the Samsung SDI manufacturing plant, cobalt typically passes through at least three to four intermediary entities: a mining company, a chemical processor (often a Chinese refiner such as Huayou Cobalt, GEM, or CNGR Advanced Material), a cathode material manufacturer, and potentially a cathode active material producer. At each stage, material from multiple sources may be blended, making mine-of-origin traceability extremely difficult without dedicated chain-of-custody systems.

Samsung SDI publishes annual conflict minerals reports as required by US Securities and Exchange Commission regulations and the EU Conflict Minerals Regulation. These reports disclose the company's due diligence processes and identify smelters and refiners in the supply chain. However, the reports typically identify downstream processors rather than tracing material back to specific mines, leaving a gap between Samsung SDI's stated commitments to responsible sourcing and the practical reality of verifying those commitments at the mine level in the DRC.

The DRC government's cobalt export ban of February 2025, subsequently replaced by a quota system in October 2025 under the management of the Entreprise Générale du Cobalt (EGC), has disrupted traditional supply flows and created additional complexity for downstream consumers like Samsung SDI. The quota system has forced battery manufacturers to diversify supply sources and has increased the strategic premium on securing reliable, long-term cobalt supply agreements with DRC producers or their trading intermediaries.

Manufacturing Operations and Global Expansion

South Korea: Home Base Operations

Samsung SDI's primary manufacturing operations are concentrated in South Korea, with major production facilities in Cheonan (South Chungcheong Province) and Ulsan. The Cheonan complex serves as the company's primary prismatic cell manufacturing hub, producing batteries for BMW, Rivian, and other European and American automakers. The Ulsan facility focuses on cylindrical cell formats and energy storage system products. These domestic facilities benefit from established supply chains, proximity to Samsung Group's broader component ecosystem, and South Korea's robust workforce of battery engineers and technicians.

Samsung SDI has invested heavily in expanding its South Korean production capacity, adding new production lines and modernising existing facilities to accommodate higher-energy-density cell formats. The company's domestic operations produce the majority of its current output, though the share of overseas production is projected to grow significantly as new international plants come online through 2027 and beyond.

Hungary: European Manufacturing Hub

Samsung SDI's European manufacturing operations are based in Göd, Hungary, approximately 30 kilometres north of Budapest. The Göd plant began production in 2018 and has undergone multiple expansions, with total investment exceeding $3.5 billion. The facility primarily produces prismatic battery cells for BMW, which operates major vehicle assembly plants in Germany and is Samsung SDI's most important European customer.

The Hungarian operation is strategically important for Samsung SDI's compliance with European Union regulations, including the EU Battery Regulation that entered into force in 2023 and imposes increasingly stringent requirements on battery carbon footprints, recycled content, and supply chain due diligence. By manufacturing within the EU, Samsung SDI can better meet local content and regulatory requirements while reducing logistics costs for its European automotive customers.

However, the Göd facility has faced local opposition. Residents of the town have raised concerns about environmental impacts, including air quality, water usage, and industrial waste management. These community tensions mirror broader debates across Europe about the environmental and social trade-offs of onshoring battery manufacturing. The Hungarian government has generally supported the Samsung SDI investment as part of its strategy to position Hungary as a European EV battery manufacturing hub, also hosting facilities from CATL and SK Innovation.

StarPlus Energy: The US Joint Venture

Samsung SDI's most consequential strategic move in recent years has been its joint venture with Stellantis to establish StarPlus Energy, a battery manufacturing operation in Kokomo, Indiana. Announced in 2022 and with construction well advanced by early 2026, the Kokomo facility represents Samsung SDI's entry into US-based battery manufacturing and its most significant response to the geopolitical forces reshaping global battery supply chains.

The StarPlus Energy joint venture is structured as a 51-49 partnership, with Samsung SDI holding the majority stake and providing the battery technology and manufacturing expertise, while Stellantis contributes as the anchor customer and co-investor. The facility's initial planned capacity is 33 GWh, with a second phase expected to bring total capacity to approximately 67 GWh. Total investment in the Kokomo complex is projected to exceed $6.3 billion across both phases.

The Kokomo facility is designed to produce prismatic NMC battery cells primarily for Stellantis vehicles assembled in North America, including models sold under the Jeep, Ram, Chrysler, and Dodge brands. The plant's production is intended to qualify for Inflation Reduction Act (IRA) tax credits under Section 30D, which provides up to $7,500 per vehicle in consumer tax credits for EVs that meet domestic content requirements for battery components and critical minerals.

IRA Compliance and FEOC Challenges

Samsung SDI's ability to fully benefit from IRA incentives depends on meeting two critical requirements: the battery component manufacturing requirement (progressively increasing domestic content thresholds for components assembled in North America) and the critical minerals requirement (progressively increasing percentages of critical minerals extracted or processed in the US or countries with US free trade agreements, or recycled in North America).

The critical minerals requirement presents the more significant challenge for Samsung SDI. The company's cobalt supply chain runs heavily through Chinese refiners and processors, which the US Treasury Department has designated as Foreign Entities of Concern (FEOC) under IRA guidance. From 2025 onward, EV batteries containing critical minerals extracted, processed, or recycled by FEOC entities are ineligible for the $3,750 critical minerals portion of the tax credit.

Samsung SDI has acknowledged these challenges and is working to restructure its supply chain to reduce dependence on Chinese-affiliated processing. This involves securing supply agreements with non-Chinese refiners, investing in partnerships with companies developing cobalt and lithium refining capacity in South Korea, Australia, Canada, and other allied nations, and exploring direct procurement relationships with DRC mining companies that can provide material processed outside of China. The pace and success of this supply chain reorganisation will determine whether StarPlus Energy batteries qualify for full IRA credits, directly impacting the price competitiveness of Stellantis EVs in the North American market.

The FEOC challenge also has implications for Samsung SDI's relationship with the Lobito Corridor. As the US government promotes the corridor as a pathway for African critical minerals to reach Western markets without Chinese intermediation, Samsung SDI stands to benefit from corridor infrastructure investments that create alternative processing and logistics routes for DRC cobalt. The corridor's development could provide Samsung SDI with a strategic supply chain pathway that satisfies both IRA requirements and the company's own responsible sourcing commitments.

Competitive Position and Market Dynamics

Samsung SDI occupies the fourth or fifth position in global EV battery market share, behind CATL (approximately 37 percent), BYD (approximately 17 percent), and LG Energy Solution (approximately 13 percent), and competing closely with SK Innovation and Panasonic for the remaining market share among top-tier suppliers. This positioning reflects both Samsung SDI's strengths in premium prismatic cell technology and its relative underinvestment in manufacturing capacity compared to Chinese competitors during the 2020-2023 period.

The company's competitive advantages include its deep relationship with BMW, which has been Samsung SDI's most important customer for over a decade, its prismatic cell expertise that is preferred by several European automakers, and its membership in the Samsung Group ecosystem, which provides access to capital, semiconductor technology, and advanced materials capabilities. Samsung SDI's R&D investment exceeds $1 billion annually, focused on next-generation cell chemistries, solid-state battery development, and manufacturing process innovation.

Customer Diversification

Samsung SDI has worked to diversify its customer base beyond BMW. Significant supply agreements with Stellantis (through StarPlus Energy), Rivian, Hyundai/Kia, and Volvo have broadened the company's revenue sources and reduced single-customer concentration risk. The Rivian partnership is particularly notable, as Samsung SDI supplies cylindrical cells for Rivian's R1T pickup truck and R1S SUV, positioning the company in the US premium EV segment alongside Tesla's relationship with Panasonic and LG.

The Hyundai/Kia relationship connects Samsung SDI to one of the world's largest automotive groups and provides a domestic anchor customer in South Korea. Volvo's commitment to full electrification by the end of the decade provides Samsung SDI with another European growth vector alongside its BMW business.

Solid-State Battery Development

Samsung SDI has positioned solid-state battery technology as its primary pathway to next-generation competitive differentiation. The company has announced plans to begin pilot production of solid-state cells by 2027, with commercial-scale production targeted for 2029 to 2030. Solid-state batteries promise higher energy density, faster charging, improved safety, and potentially longer cycle life compared to conventional liquid electrolyte lithium-ion cells.

The cobalt implications of solid-state batteries are uncertain but potentially significant. Early solid-state designs from Samsung SDI and competitors suggest that NMC-type cathode chemistries will continue to be used, meaning cobalt demand could persist even as cell architectures evolve. However, the higher energy density of solid-state cells could reduce the total number of cells required per vehicle, potentially offsetting increases in absolute production volume. The net effect on Samsung SDI's cobalt demand will depend on the pace of solid-state adoption, the cathode chemistry choices made for commercial products, and the overall growth trajectory of the EV market.

Supply Chain Due Diligence and Conflict Minerals

Samsung SDI's approach to supply chain due diligence reflects the tension between the company's stated commitments to responsible sourcing and the structural challenges of achieving full traceability in a complex, multi-tiered global supply chain that originates in some of the world's most challenging governance environments.

Responsible Minerals Initiative Membership

Samsung SDI is a member of the Responsible Minerals Initiative (RMI), the industry's leading collaborative framework for responsible mineral sourcing. RMI membership commits Samsung SDI to implementing the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, conducting risk assessments of its mineral supply chains, and participating in industry-wide initiatives to improve traceability and governance in mineral-producing regions.

Through the RMI, Samsung SDI participates in the Responsible Minerals Assurance Process (RMAP), which audits smelters and refiners against responsible sourcing standards. The company requires its direct suppliers to source from RMAP-conformant smelters and reports on the proportion of its supply chain that has been validated through these mechanisms. As of its most recent conflict minerals report, Samsung SDI identified over 200 smelters and refiners in its supply chain across tin, tantalum, tungsten, gold, and cobalt (3TG+Co).

Conflict Minerals Reporting

Samsung SDI publishes annual conflict minerals reports in compliance with Section 1502 of the US Dodd-Frank Act and, more recently, the EU Conflict Minerals Regulation. These reports describe the company's due diligence framework, supply chain mapping efforts, and risk identification and mitigation processes. The reports follow the five-step framework of the OECD Due Diligence Guidance: establishing strong company management systems, identifying and assessing risks, designing and implementing a strategy to respond to identified risks, carrying out independent third-party audits, and reporting on supply chain due diligence.

However, the practical limitations of Samsung SDI's conflict minerals reporting are significant. The reports identify smelters and refiners but do not typically trace material to specific mines. The multi-layered nature of the cobalt supply chain, with material from artisanal and industrial sources often co-mingled at processing facilities, makes mine-level traceability extremely difficult. Samsung SDI acknowledges these limitations in its reporting and describes ongoing efforts to improve supply chain visibility, including digital traceability pilots and direct engagement with upstream suppliers.

Cobalt-Specific Due Diligence

Samsung SDI has implemented cobalt-specific due diligence measures that go beyond the standard 3TG conflict minerals framework. The company has established a Cobalt Due Diligence Policy that commits to respecting human rights throughout its cobalt supply chain, with particular attention to child labour, forced labour, and unsafe working conditions. The policy explicitly references the artisanal and small-scale mining (ASM) sector in the DRC, where these risks are most acute.

The company participates in industry initiatives focused on cobalt supply chain responsibility, including the Cobalt Industry Responsible Assessment Framework (CIRAF) and various automotive industry working groups on responsible battery materials sourcing. Samsung SDI has also engaged with organisations working on ASM formalisation in the DRC, though the scale and effectiveness of these engagements relative to the company's cobalt consumption remains difficult to independently verify.

A persistent challenge in Samsung SDI's cobalt due diligence is the dominance of Chinese refiners in the midstream processing segment. Companies such as Huayou Cobalt, GEM Co., and Zhejiang CNGR Advanced Material process the majority of DRC cobalt into battery-grade materials. Samsung SDI's ability to conduct effective due diligence on the upstream supply chains feeding into these Chinese refiners is limited by geographic distance, language barriers, and the commercial sensitivities of its Chinese suppliers. This structural challenge is not unique to Samsung SDI but is particularly relevant given the company's efforts to comply with US FEOC regulations and Western due diligence expectations.

ESG Assessment

Environmental Performance

Samsung SDI's environmental footprint is defined primarily by the energy intensity of battery manufacturing and the embodied emissions of its raw material supply chain. The company has set targets to achieve carbon neutrality in its direct operations (Scope 1 and 2) by 2050, with interim targets for renewable energy procurement and energy efficiency improvements at its manufacturing facilities. The South Korean and Hungarian plants are progressively increasing their use of renewable electricity, though the pace of this transition varies by jurisdiction.

The Scope 3 emissions associated with Samsung SDI's raw material supply chain, including the mining, refining, and processing of cobalt, nickel, lithium, and other battery materials, represent the majority of the product's lifecycle carbon footprint. These upstream emissions are significantly influenced by the energy mix of processing countries, with Chinese cobalt refining relying heavily on coal-generated electricity. Samsung SDI's efforts to shift supply chains away from Chinese processing could have positive environmental co-benefits if alternative refining operations use lower-carbon energy sources.

Social Responsibility

Samsung SDI's social responsibility performance must be evaluated across multiple geographies and tiers of its supply chain. At its own manufacturing facilities, the company reports compliance with international labour standards, including freedom of association, non-discrimination, and occupational health and safety. Samsung SDI is subject to regular audits under Samsung Group's supplier code of conduct and external frameworks such as the Responsible Business Alliance (RBA) standards.

The more consequential social responsibility questions relate to Samsung SDI's upstream supply chain, particularly in the DRC. The company's cobalt supply chain traverses regions where child labour in artisanal mining, hazardous working conditions, community displacement, and inadequate environmental protections are well-documented by international organisations including UNICEF, Amnesty International, and the International Labour Organisation. Samsung SDI's ability to ensure that its cobalt does not contribute to these harms depends on the effectiveness of its due diligence programmes and the integrity of auditing processes at each tier of the supply chain.

Governance

As a Samsung Group subsidiary listed on the Korea Exchange, Samsung SDI operates within the governance framework of one of South Korea's largest chaebol conglomerates. Samsung Group's governance practices have faced scrutiny over the years, including high-profile legal proceedings involving former Samsung Group chairman Lee Jae-yong. Samsung SDI's board includes independent directors and has established committees for audit, compensation, and sustainability oversight, though the degree of genuine board independence within the chaebol structure remains a question for governance analysts.

Samsung SDI's sustainability governance includes a dedicated ESG management organisation, regular materiality assessments, and integration of ESG considerations into business strategy and investment decisions. The company participates in major ESG rating frameworks and has received generally favourable ratings from agencies such as MSCI and Sustainalytics relative to industry peers, though these ratings primarily evaluate policy and process rather than outcomes at the mine level.

Strategic Outlook and Corridor Implications

Samsung SDI's strategic trajectory has direct implications for the Lobito Corridor and the broader geopolitics of critical mineral supply chains. Several key dynamics will shape the company's relationship to DRC cobalt supply chains over the coming years.

Supply Chain Restructuring Under IRA and FEOC

The most immediate strategic priority for Samsung SDI is restructuring its critical minerals supply chain to comply with US IRA requirements and avoid FEOC penalties. This restructuring creates opportunities for the Lobito Corridor, as Samsung SDI and its supply chain partners seek non-Chinese processing pathways for DRC cobalt. Investments in cobalt refining capacity in South Korea, Canada, Finland, and potentially in corridor nations themselves could create new supply routes that benefit Samsung SDI, corridor economies, and Western strategic objectives simultaneously.

The US government's promotion of the Lobito Corridor as a critical minerals trade route aligns with Samsung SDI's need for verifiable, non-FEOC supply chains. If corridor infrastructure development succeeds in creating efficient logistics pathways from DRC mines to allied processing facilities, Samsung SDI would be a natural customer for these materials, particularly given the IRA incentives attached to its StarPlus Energy production.

Cobalt Demand Trajectory

Samsung SDI's future cobalt demand will be shaped by competing forces. On one hand, the transition to lower-cobalt cathode chemistries (NMC 811 and beyond) reduces cobalt intensity per kilowatt-hour. On the other hand, the explosive growth in EV battery production volumes and Samsung SDI's own capacity expansion plans mean that absolute cobalt consumption could increase even as per-unit intensity declines. The company's development of cobalt-free battery chemistries, including lithium iron phosphate (LFP) for certain applications and eventually solid-state designs, could provide longer-term pathways to reduce DRC cobalt dependency, but these alternatives are not expected to materially displace NMC in Samsung SDI's premium EV battery applications before 2030.

Geopolitical Positioning

Samsung SDI's position as a South Korean company manufacturing in allied nations (South Korea, Hungary, United States) places it firmly within the Western-aligned battery supply chain ecosystem that governments in Washington, Brussels, and Seoul are working to establish. This geopolitical positioning creates both opportunities and obligations. Samsung SDI benefits from subsidies, trade preferences, and diplomatic support, but faces increasing expectations around supply chain transparency, responsible sourcing verification, and the demonstration that Western-aligned supply chains deliver genuine improvements in governance and human rights outcomes relative to the Chinese-dominated alternatives.

The company's credibility in this geopolitical role depends on demonstrating that its supply chain due diligence is more than a compliance exercise. As governments invest billions in corridor infrastructure and critical minerals partnerships, Samsung SDI and its battery manufacturing peers face growing scrutiny from civil society organisations, investigative journalists, and regulatory bodies demanding evidence that the minerals in Western-bound EV batteries are sourced responsibly from the communities and ecosystems that bear the costs of extraction.