[Going to Net Zero No.1] Unique Technology 'Z Folding' Battery Production... The Secret to Zero Fires

SK On Hungary Komarom Battery Plant Interior First Media Reveal
Over 3 Trillion Won Invested in Hungary Plants 1, 2, and 3... Base for Targeting Europe’s Rapid Eco-Friendly Vehicle Market

[Komarom (Hungary) = Asia Economy Reporter Kim Hyewon] "Since I first planned the electric vehicle battery business, the efforts invested are bearing fruit with the construction of the European factory. I hope the day will come soon when SK batteries are supplied to electric vehicles worldwide." (March 8, 2018, Choi Jae-won, Senior Vice Chairman of SK Group)

The third-generation SK Group founders, brothers Chey Tae-won and Chey Jae-won, have long identified batteries as a future new growth business, calling it the "second semiconductor" and showing special affection for it. When Vice Chairman Choi attended the groundbreaking ceremony of the European factory in 2018, SK Innovation was criticized as a latecomer in the battery market. However, in just three years, SK Innovation's battery division was spun off into SK On, a specialized battery company, supported by an order backlog worth 220 trillion won.

Last November, during President Moon Jae-in's state visit to Hungary, Chairman Choi accompanied the delegation and took time to visit the SK On Hungary factory in person. At this event, Chairman Choi reportedly ordered the development of ESG (Environmental, Social, and Governance) programs to enhance SK brand value, in addition to producing high-quality products for customers.

He intended to find ways to contribute as a member of the local community after hearing that the industrial complex in Komarom, once dominated by Nokia phones, had regained vitality since the SK On battery factory was established. Besides the owner family, Ji Dong-seop, President of SK On, who took charge of the battery business at SK Innovation, also first visited the Komarom factory among overseas production bases. This underscores its symbolic significance within SK Group.

◆The Second Semiconductor, First Public Reveal of Complex Processes Concentrating Technology= About an hour and a half northwest of Budapest, the capital of Hungary, the vast SK On battery factory site stretched endlessly, revealing its grandeur. These are SK On battery plants 1 and 2 in Komarom. Although smaller than the third plant under construction in Iv?ncsa, about 50 km southwest of Budapest, it is still large. The Komarom factory had strict access controls from the entrance. As a national security facility, all electronic devices were prohibited, and dustproof suits and air showers were mandatory when moving between the first plant. Photos taken inside the factory by employees were all prohibited from being taken out. This is the first time SK On Hungary has publicly revealed its commercial production lines to the media.

The battery manufacturing process is broadly divided into electrode (plate) processes that produce cathodes and anodes, assembly and packaging that form the battery shape we use, and formation processes that impart electrical characteristics to the battery cells.

Local employees are inspecting the line at SK On's battery plant in Komarom, Hungary. This is the first time SK On has opened the interior of the battery plant to the media. Photo by SK On

After mixing and drying battery raw materials in large drums to create electrodes, the electrodes are cut and moisture removed in the electrode process. Entering the assembly process, numerous facilities along a long, straight line inside the glass window continuously operate with pounding sounds. Hong Jeong-gyun, PM in charge of assembly, explained, "One of SK On's unique technologies is the stacking process, where separators are zigzag stacked between multiple coated single plates. It takes 0.6 seconds to stack one sheet and less than a minute to make a jelly roll, the intermediate form of a finished battery." This 'Z-folding' technique is said to be the secret to zero fire incidents.

There were 18 to 22 stacking machines installed per line. Various testing equipment such as X-rays were placed throughout, and jelly rolls passing these tests were assigned unique serial numbers. This is to trace data when detecting defects, marking the proud moment when a battery gains its 'name' as a single unit. Next came the packaging process, similar to stamping fish-shaped bread (Bungeoppang) from a machine, where jelly rolls are placed in pouches and sealed. Weight is measured before and after electrolyte injection to filter out defects once more. Batteries after assembly look like batteries but do not yet have electrical characteristics. Therefore, they automatically move via logistics trays to the formation process, which imparts electrical properties. This process must be conducted under controlled temperature and humidity, so it was not visible to the naked eye.

◆‘Bold Investment’ with Three New and Expanded Factories in Hungary= The Komarom factory in Hungary is SK On's first production base in Europe and the first overseas factory invested 100% independently, not as a joint venture. Nearly 2 trillion won was invested in plants 1 (7.5 GWh) and 2 (10 GWh), and combined with the third plant in Iv?ncsa, more than 3 trillion won has been poured into Hungary alone. Additional land for expansion has been secured, so total investment is expected to increase by several trillion won.

SK Group spared no astronomical expense because it made a preemptive investment in the growth potential of the European electric vehicle market. Europe, the leader in net-zero (carbon neutrality), has a faster electric vehicle adoption rate than the U.S. due to strong government eco-friendly policies and is one of the few regions where demand for eco-friendly vehicles did not decline even during COVID-19. Major automakers, including Hyundai Motor and Kia, have manufacturing plants in Europe, providing geographical advantages as a battery supplier. Battery cells made at Komarom Plant 1 are supplied to Hyundai Motor's Kona EV produced at its Czech factory, about five hours away by land. Daimler Group, Volkswagen Group, and Ford are also customers of SK On's Hungary factory. Han Sang-gyu, head of SK Battery Hungary, said, "Besides market conditions, low labor costs, excellent labor quality, and the Hungarian government's incentive policies make this an optimal location. If additional business volume is secured with customers, expansion is always possible."

There are challenges. Being in the early stages of factory operation and given Hungary's near full employment, workforce management is difficult. The head of the corporation said, "Although unemployment is low, turnover and resignation rates are very high across Hungary. Our factory's turnover rate is low at around 1%, but we prepare incentives such as long-term service awards to prevent workforce shortages." This is also why more than 2,000 employees work at Komarom plants 1 and 2 despite it being a fully automated factory, not just because of employment subsidies.

Komarom (Hungary) = Reporter Kim Hyewon