SoftBank Converts Sharp LCD Factory into Battery Plant for AI Data Centres
SoftBank Corp. plans to convert part of the former Sharp LCD factory in Sakai, Osaka into one of Japan’s largest battery production lines for AI data centres, with production expected within five years (~2031). The move completes a vertical integration stack spanning chips (Arm, Graphcore, Ampere), modular data centre manufacturing (Lordstown), energy generation (SB Energy, 3+ GW solar), and now energy storage.
Background
The building in Sakai, Osaka, formerly made LCD panels for Sharp television sets. SoftBank acquired it last year for 100 billion yen ($676 million) and announced its AI data centre plans. Now, executives have decided to also establish a battery factory on the site.
Bloomberg reported that SoftBank Corp.'s mobile subsidiary aims to convert a significant portion of the 440,000-square-metre facility into a large-scale battery production line for powering its AI data centres. Initially, executives considered robotics manufacturing but opted for energy storage instead. The batteries are expected to be online within five years.
Vertical Integration Stack
This decision solidifies a unique vertical integration stack in the current AI infrastructure race:
- Chips: SoftBank owns Arm, Graphcore, and Ampere Computing.
- Data Centres: They build modular data centre units at a former electric vehicle plant in Lordstown, Ohio.
- Energy Generation: SB Energy operates over 3 GW of solar capacity in the US and has a pipeline exceeding 15 GW of solar and 12 GWh of storage.
- Energy Storage: With the Sakai battery line, SoftBank will manufacture its own energy storage hardware instead of purchasing it from CATL, BYD, or Tesla.
The Unresolved Energy Problem
AI data centres demand a power profile that conventional infrastructure wasn't designed for. Rapid workload fluctuations from 30% to 100% capacity in seconds necessitate batteries as a buffer between the facility and the grid. Grid interconnection queues in the US are congested, making batteries essential for bringing data centres online before permanent connections are established.
The North American market for AI data centre energy storage batteries is projected to grow from $898 million this year to $32.4 billion by 2034, indicating a massive demand for efficient energy storage solutions. All major cloud providers, including Google, Microsoft, and Amazon, are actively securing energy storage for their facilities.
Google, for example, is constructing what it claims is the world's largest battery storage system in Minnesota, partnering with Form Energy on iron-air batteries capable of 100 hours of dispatch. Eos Energy is another company developing advanced battery technologies to address this critical energy challenge.