This week, Group14 Technologies, the Washington-based “Electrification of Everything” startup that provides silicon-carbon composite materials for the lithium-ion battery end market, announced a joint venture with South Korean industrial gas production SK Materials, a division of South Korean electronics and semiconductor giant SK Group. Together, the companies will build a factory for lithium-silicon battery materials in South Korea, an initiative that Group14 says will allow it to secure “dual sourcing” for its lithium-silicon materials, and curtail the effects of supply chain disruptions in the global battery market.
Under terms of the joint venture, SK Materials will invest $52 million to develop a battery materials production hub in South Korea that is expected to be up and running in 2022.
Pre-empting supply chain disruptions
“As one of the world’s largest global manufacturers, we recognize that we must pre-emptively address potential supply chain challenges to stay ahead of the demand,” said Kiseon Park, Vice President of SK Materials, in a comment on the venture.
As demand for high-performing battery materials remains high, Group14 notes that global supply chain volatility poses significant challenges for lithium-ion-powered industries such as consumer electronics, electric vehicles, medical devices and more. This new venture will enable so-called dual sourcing (i.e., using two separate source relationships) for its lithium-silicon technology, from South Korea as well as Group14’s own domestic Battery Active Materials (BAM) factory in Washington, which launched earlier this year.
The latest venture expands an existing financial relationship between the firms. In December 2020, Group14 announced a $17 million Series B venture round, which was led by SK materials. Other investors include ATL, BASF, Cabot Corporation and Japanese chemical company Showa Denko.
“The battery market is expected to continue this tremendous growth trajectory globally, and the joint venture with SK will further strengthen our capacity to deliver our patented lithium-silicon battery technology to our customers,” Group14’s CEO and Co-Founder Rick Luebbe said. “We are thrilled to take the first step towards establishing our first international factory to manufacture our lithium-silicon battery technology and truly enabling the electrification of everything globally.”