Competition in Cathode Material Expansion Leads to Supply Contracts
Securing Technology for Silicon Anode and All-Solid-State Production Facilities
POSCO Future M will invest 680 billion KRW over the next two years to expand its high-nickel NCA cathode material production capacity by more than 50,000 tons. The company has set a plan to proactively respond to the global electric vehicle market growth trend and expand its cathode material production capacity to 1 million tons by 2030. As POSCO Future M embarks on aggressive expansion, Wonjun, which manufactures equipment necessary for secondary battery material production processes, is gaining attention in the domestic stock market.
Wonjun is engaged in the heat treatment equipment business, which involves manufacturing, installing, and commissioning heat treatment sintering furnace equipment essential for producing various advanced materials, as well as the process equipment engineering business that provides EPC turnkey solutions for material production processes.
Wonjun established its initial material sintering furnace business by registering as a POSCO partner immediately after its founding in 2008. In 2009, it succeeded in developing the RHK (Roller Hearth Kiln), a gas atmosphere sintering furnace for testing lithium secondary battery cathode and anode materials. In 2010, it developed Korea’s first RHK for MLCC (Multi-Layered Ceramic Capacitor) sintering. The company has accumulated world-class heat treatment technology over a long period.
Wonjun provides customized product development and production process equipment solutions tailored to major customers producing cathode and anode materials that make up secondary batteries. Major clients include POSCO Future M and SK Materials Group Potin. The company has secured top-level gas tightness required for high-nickel product production, excellent temperature precision, and state-of-the-art in-furnace gas atmosphere control technology.
The heat treatment sintering furnace equipment manufactured and supplied by Wonjun enables chemical reactions between raw materials and heat and gas to produce materials with desired properties. It is used in core processes that determine the quality and productivity of the produced materials. The EPC turnkey solution is a comprehensive service that provides design, manufacturing, procurement, construction, and commissioning for the entire material production process?from raw material supply and mixing to product packaging?based on a deep understanding of the characteristics of the materials customers want to produce.
In March this year, Wonjun signed a contract worth 84.3 billion KRW to supply cathode material sintering furnaces with Ultium CAM, a joint venture between POSCO Future M and GM. Kyunggeun Kang, a researcher at NH Investment & Securities, analyzed, "A similar-sized second contract is expected as early as the end of this year or early next year," adding, "Following the contract for the first phase cathode material sintering furnace in Pohang last June, a second phase order is also anticipated in the second half of the year." Previously, in June last year, Wonjun signed a contract worth 44.2 billion KRW to supply heat treatment equipment for the first phase cathode material production in Pohang with POSCO Future M.
SK Materials Group Potin has planned silicon anode material production facilities by 2025 and is investing in its second plant following the first plant in Sangju. Wonjun signed a contract with SK Materials Group Potin for heat treatment equipment and an EPC turnkey production line for anode material production.
Won Yong Shim, a researcher at Shinhan Investment Corp., explained, "The benefits of cathode material capacity expansion are becoming concrete," adding, "Cathode material companies are aggressively expanding production both domestically and internationally through long-term supply contracts and to meet local demand."
He continued, "The combined production capacity target of the four major domestic cathode material companies is 1.18 million tons by 2025 and over 500,000 tons each after 2028," adding, "This will enable market share expansion while responding to key customers."
Jaeyoon Kim, a researcher at the Korea IR Association, analyzed, "Wonjun has a track record of supplying heat treatment equipment to most cathode material manufacturers," adding, "POSCO Future M is establishing a joint venture with GM in Pohang to build cathode material and precursor production plants in North America along with its secondary battery material factory."
He added, "Due to new factory investments by customers, there is a high possibility of orders for cathode material sintering furnaces in Pohang and North America."
Wonjun has a lineup of heat treatment equipment for various materials including cathode materials, anode materials, and MLCC. Researcher Kim said, "In the case of anode material heat treatment equipment, Wonjun has successfully mass-produced equipment for new silicon anode materials, moving beyond traditional artificial graphite anode materials," forecasting, "The global silicon-based anode material market will grow from 4,000 tons in 2022 to 200,000 tons by 2030." He also said, "Wonjun secured ultra-high temperature heat treatment technology by acquiring Germany’s Eisenmann in 2020 and succeeded in exporting pilot heat treatment equipment for all-solid-state batteries."
All-solid-state batteries in ultra-thin form require precise temperature control as well as heat treatment in special gas atmospheres. Wonjun has already secured the technology to realize this, so by developing and applying it according to the characteristics of all-solid-state batteries, it can respond to the demand in the all-solid-state battery market.
Wonjun has also secured a recycling solution for spent batteries. This field applies know-how and technology similar to existing cathode material heat treatment solution processes. It is known to be in discussions with potential domestic and international customers.
As of 10:47 AM on the 26th, Wonjun’s stock price was trading up 7.87% at 27,450 KRW. POSCO Future M surpassed 655,000 KRW after rising nearly 10%. POSCO Future M’s stock price has surged more than 85% since the beginning of this month.
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