OCI signs a long-term agreement to supply raw material for silicon anode material for lithium-ion batteries

OCI signs a long-term agreement to supply
raw material for silicon anode material for lithium-ion batteries.


- OCI will supply core raw material for silicon anode materials to Nexeon Ltd. (UK) for five years from 2025.

- OCI will start commercial production from 2025 after groundbreaking this year for a plant to produce a special raw material for silicon anode materials with an annual capacity of 1,000 tons.

On July 26, OCI announced that it signed a long-term agreement with Nexeon to supply a core raw material necessary to produce silicon anode materials for rechargeable batteries. 

Under the agreement, OCI will supply to Nexeon a special raw material (SiH4) for silicon anode materials for five years from 2025. This initial long-term supply agreement is valued at about KRW 70 billion (USD 55 million), and the size of the agreement is expected to increase as the customer expands production.

The plant to produce special raw material for silicon anodes will have an annual capacity of 1,000 tons and will be built in the lot of OCI’s Gunsan Plant, which produces polysilicon for semiconductors and phosphoric acid. The construction of the plant will start this year, with commercial production slated to begin in the first half of 2025, and the production volume will be adjusted depending on the demand of Nexeon. 

Nexeon is a leading manufacturer of silicon anode materials for rechargeable batteries with more than 170 patents related to silicon-based anode materials. The UK company recently signed a long-term agreement to supply silicon anode materials to Panasonic, the world’s fourth largest battery cell manufacturer, and will secure production capacity under the agreement.  

Demand for silicon-based anode material is rising as a next-generation battery material as it addresses the shortcomings of conventional graphite-based anode materials and offers longer driving distance with a shorter charging time. However, due to price and stability issues, few firms have succeeded in commercializing the technology. In addition, first-generation anode materials such as silicon oxide cannot replace more than 10% of graphite due to its expansion characteristic. 

Nexeon’s silicon-rich anode material is a second-generation battery material that overcomes the hurdles of the first-generation material using its proprietary technology to relieve the expansion of silicon anode material. It is reported that by increasing the amount of Nexeon’s second-generation anode materials incrementally when making cells, the energy density of rechargeable batteries can be enhanced by up to 50%. As a result, electric vehicles equipped with Nexeon’s silicon anode materials can have longer driving distances and shorter charging times, as well as stability. Demand for Nexeon’s second-generation silicon anode material is expected to grow rapidly, as it can replace most of the first-generation silicon materials.

OCI can supply raw material for the second-generation silicon anode material directly to Nexeon’s plant through pipes, and will increase production capacity in tandem with market growth and rising customer demand. 

The raw material for silicon-based anode materials to be produced by OCI will be cost competitive because it is produced in the process of manufacturing polysilicon for semiconductors at the Gunsan Plant. In terms of production facilities, OCI will introduce the latest simplified manufacturing process and a one-step shutdown valve for a quick response in the event of safety problems to ensure efficiency and stability in production. 

Starting with this supply of raw material for silicon anode materials, OCI will actively develop raw materials for next-generation silicon anode materials and semiconductors to establish its leadership in raw materials for rechargeable batteries and semiconductors. On June 1, OCI announced that it signed an MOU to establish a joint venture with Tokuyama Corporation of Japan to produce polysilicon for semiconductors with a capacity of 11,000 tons. The company will also produce high-softening-point pitch, a coating material for anodes, with POSCO Future M from the fourth quarter this year. OCI seeks to expand the production of semiconductor materials such as phosphoric acid, hydrogen peroxide, and precursor. 

OCI President Yoo-Shin Kim said, “We expect to produce price-competitive quality products by maximizing the strength of OCI as a cutting-edge material supplier and the advantage of Nexeon’s advanced silicon anode material technology. OCI will continue to expand investment to sharpen its competitive edge and build leadership in the rapidly growing rechargeable battery materials market.”