SoftBank plans to manufacture batteries for AI data centers at converted Osaka factory

SoftBank Moves to Manufacture Batteries for Growing AI Infrastructure

SoftBank Group Corp.'s mobile unit is preparing to transform part of its factory in Osaka into one of Japan's biggest production lines for large-scale battery production, marking an ambitious expansion into energy manufacturing to power SoftBank's own AI data centers 1

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. The company aims to bring production online within the next five years at the former Sharp LCD factory in Sakai city, which SoftBank acquired in 2025 for ¥100 billion ($630 million) 1

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. After considering various purposes including robotics manufacturing, executives led by Masayoshi Son decided to pursue energy solutions for large-scale AI 1

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Vertical Integration Strategy Spans Chips to Energy Storage

The battery plant for AI data centres completes a vertical integration stack that positions SoftBank across the entire AI infrastructure value chain 2

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. The company now controls Arm for chip design, acquired Graphcore and Ampere Computing for AI processors, builds modular data centers at a former electric vehicle plant in Lordstown, Ohio purchased for $375 million, and operates more than 3 gigawatts of solar capacity through SB Energy 2

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. The Sakai facility, with floor space of about 840,000 square meters, will house both a data center with planned capacity of 400 megawatts or more and the new battery manufacturing operation 1

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Japan's Manufacturing Self-Reliance Amid Supply Chain Tensions

SoftBank Corp. CEO Junichi Miyakawa, who is expected to announce the battery venture next month as part of a new five-year business plan, wants Japan's manufacturing self-reliance to increase as geopolitical tensions continue disrupting supply chains across industries 1

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. The plan calls for developing a plant with an estimated total battery capacity of several gigawatt hours, which would rank among the largest in Japan according to BloombergNEF data, though much smaller than Chinese factories that sometimes exceed 50 gigawatt hours 1

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. Chinese producers currently dominate the global market for lithium batteries used in electric vehicles and energy storage systems, accounting for 64% of the ESS market compared to North America's 16% share in 2025 1

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Advanced Battery Technologies Under Consideration

SoftBank is reviewing multiple new cell technologies that could be adopted for mass production, with a decision yet to be made 1

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. While the most commonly used technology is lithium iron phosphate batteries, valued for safety and cost effectiveness, SoftBank is exploring more advanced but nascent technology from Japan or South Korea to better compete against Chinese rivals 1

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. The company's research arm has been developing all-solid-state batteries with Enpower Japan, achieving energy densities of 350 watt-hours per kilogram with a target of 400 by next year 2

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Critical Role in Stargate AI Infrastructure Project

The timing of on-site battery storage development connects to the Stargate AI infrastructure project, the $500 billion joint venture that Masayoshi Son chairs alongside OpenAI, Oracle, and Abu Dhabi's MGX 2

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. SoftBank's planned campus at a former Department of Energy nuclear enrichment site in Portsmouth, Ohio requires 10 gigawatts of capacity powered by 9.2 gigawatts of natural gas generation, with a first-phase cost of $33 billion 2

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. AI data centers face power demands that swing from 30% to 100% of capacity in seconds, requiring batteries as grid buffering between facilities and the grid 2

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Market Growth and Competitive Landscape

The North American market for AI data center energy storage systems is projected to grow from $898 million this year to $32.4 billion by 2034, representing a compound annual growth rate of 74.3% 2

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. Grid capacity constraints have made grid interconnection queues so congested that batteries have become essential for bringing data centers online before permanent grid connections are established 2

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. Individual installations now require 20 to 500 megawatt-hours of storage, with every major cloud provider from Google to Microsoft to Amazon working to secure renewable energy storage for facilities already under construction 2

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