SK to foster Changzhou factory as 2nd mother fab

SK Innovation will foster its electric vehicle (EV) factory at Changzhou, China as its second mother fab, TheElec has learned.

Like SK’s first mother fab, its factory in Seosan, South Korea, the factory in China will supervise battery production lines abroad and also perform research and development.

The expansion of EV sales have caused a battery shortage and battery makers are focusing on ways to expand productivity and securing yield rate due to this. 

SK’s move to make Changzhou factory another mother fab is likely done to avoid problems faced by LG Chem for their Poland factory. Seosan also has limited space to further expand capacity, while Changzhou acting as another mother fab will help SK support its Blue Sky United Energy factory and factory run jointly with EVE Energy.

SK has put in a pilot line near its Changzhou factory to research ways to increase productivity. The pilot line uses local equipment maker Wuxi Lead Intelligent’s kits for the whole production process from mixing to formation.

Wuxi has previously supplied SK Innovation with its stacking kit for the Seosan factory, its first deal with the Korean battery maker. 

SK considered price, relationships with the Chinese government and its joint ventures for its now extended partnership with Wuxi, a person familiar with the matter said. SK will still mostly use South Korean kits for its commercial production line, they said.

Blue Sky United Energy factory’s role will grow important going forward. The factory not only produces batteries but will also conduct recycling, reusing and separator businesses. It will also be able to use infrastructure of Dongfeng Yueda Kia, a joint venture of its three namesake companies.

SK Innovation’s top leadership recently met with their counterpart at Evergrande Group in China, the person said, and is discussing close collaboration with local governments.