LG Energy Solution, Samsung SDI target AI backup cells for 2027

By Tom Whitfield

LG Energy Solution and Samsung SDI target second-quarter 2027 mass production of cylindrical lithium iron phosphate (LFP) cells for battery backup units (BBUs) serving AI servers. A November 13 DigiTimes report said the move takes LFP beyond electric vehicles and grid storage into data-center backup power.

The dates are company plans; the report gives no cell-volume or revenue commitments. A BBU sits beside a server and supplies power instantly during an outage or voltage drop, keeping equipment running. Korea's Financial News reported that rising power draw from high-performance GPUs raises the output and storage these backup systems require.

The practical consequence is that AI servers now demand more backup power and storage. Most BBU cells use nickel-based chemistry. LFP stores less energy per kilogram, but uses less costly raw materials and offers greater thermal stability.

Designers increasingly place BBUs in a separate "sidecar" cabinet beside, rather than inside, the server rack, easing the space constraint that favored denser nickel-cobalt-manganese cells. That shift makes lower energy density less restrictive for data centers.

What is LG Energy Solution building?

LG Energy Solution is preparing 2170-format tabless LFP cells, measuring 21 mm wide by 70 mm tall, at its Ochang Energy Plant in Cheongju. The tabless design reduces internal resistance and heat so the cells can deliver short bursts of high output.

Noh In-hak, who heads small-battery planning, said on the third-quarter earnings call that the BBU cell was targeted for second-quarter 2027 mass production. On the same call, he said the cell had "beat nickel-cobalt-manganese (NCM) cells in thermal safety tests" and that customers had responded well.

LG Energy Solution did not name those customers. One technical advantage is clear, while the commercial customer list remains undisclosed.

What is Samsung SDI building?

Samsung SDI is moving its BBU cells from the 18650 format to the larger 21700 format and adding LFP to a lineup built on high-nickel chemistry. It plans to install an LFP cathode electrode line for BBUs at its second plant in Seremban, Malaysia.

The company will reuse existing NCM equipment and add some tooling to limit the need for new investment. Samsung SDI showed a next-generation cylindrical LFP cell at Data Center World Asia in Singapore in late September.

Executive Oh Jae-gyun said on the third-quarter call that the company wants to "add new customers and diversify its client base." The message is that Samsung SDI is pairing a new LFP format with a plan to widen its customer base.

How large could the BBU market become?

Global Info Research estimates the global AI-server BBU market at about $349 million in 2025 and $1.862 billion by 2032. Asia Today, citing that research, gives the forecast a compound annual growth rate of 27.3%. Asia Today also noted that every customer requires its own certification and performance validation.

Market growth does not guarantee either Korean supplier a particular margin or production volume. Both companies view AI data centers as a new revenue source as demand for electric-vehicle batteries slows.

Neither the production schedules nor the market estimate settles which supplier captures the larger share. The next checkpoint is whether customer-specific validation supports volume production on the second-quarter 2027 schedules.