SoftBank to manufacture large-scale batteries for AI data centers at former Sharp factory

SoftBank Corp. Converts Sharp Factory for Battery Cell Manufacturing

SoftBank Group's mobile-services subsidiary announced plans to begin manufacturing large-scale battery cells at a former Sharp LCD factory in Sakai, Osaka, marking a significant move to address the escalating power demands of AI data centers 1

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. The 440,000-square-metre facility, acquired for approximately ¥100 billion, will target an output of one gigawatt-hour per year once production reaches full scale 1

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. SoftBank Corp. plans to commence mass production in the fiscal year starting April 2026, partnering with two South Korean firms: Cosmos Lab, which contributes zinc-halide chemistry, and DeltaX, which provides systems integration 2

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Strategic Partnerships and Chemistry Choices

The collaboration positions SoftBank within the South Korean battery-tech ecosystem rather than relying on Chinese supply chains, offering both commercial and policy advantages 1

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. Initial production will utilize lithium-iron-phosphate and other chemistries, with zinc-halide manufacturing targeted for 2027 1

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. The zinc-halide chemistry is particularly appealing because it is non-flammable and uses widely available materials, critical factors for data-centre fire-code approval and for positioning batteries inside or near server halls 1

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. This approach avoids rare-earth and cobalt supply chains that face Chinese export-control pressure, a strategic consideration as geopolitical tensions influence technology sourcing decisions.

Vertical Integration to Meet AI Infrastructure Needs

The batteries will primarily supply storage for the AI data centers SoftBank is already building, though the company also plans to serve grid systems, factories, and industrial and residential customers 1

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. SoftBank's vertical integration strategy means the company operates as both the data-centre operator and the battery customer, a hedge against the multi-year lead times facing equivalent storage projects elsewhere 1

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. AI data centres require large, fast-discharge storage to smooth power demand and survive grid events, making the lithium-iron-phosphate and zinc-halide combinations well-suited to that operational profile 1

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Addressing Global Storage Capacity Shortage

The Sakai conversion responds to a global storage-capacity shortage, with US grids alone spending $1.4 trillion in utility capex to keep pace with AI demand 1

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. While one gigawatt-hour annually positions the facility among Japan's largest battery production sites, it remains modest compared to Chinese CATL plants operating at 100GWh-plus or the largest US sites approaching 35GWh 1

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. The strategic value lies in onshore supply, control over chemistry, and the option to extend production if demand justifies expansion 1

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. SoftBank could scale up to a capacity of several GWh, according to Bloomberg 2

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, and over the medium term plans to expand into global markets 2

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Industrial Reuse and Market Implications

The Sharp factory conversion represents a concrete example of Japanese industrial reuse, repurposing a high-volume display factory built for a category that lost out to OLED technology for the storage category AI has made urgent 1

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. SoftBank invested separately in Cosmos Lab earlier this month, signaling preparation for this manufacturing partnership 1

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. Investors received the disclosure as long-term positive but an immediate non-event, with SoftBank shares closing roughly flat in Tokyo, as ongoing OpenAI-margin-loan negotiations continue to drive more immediate stock movement .