Samsung's first megafactory on American soil is looking more likely after it agreed a deal to provide batteries for electric vehicle (EV) startup Rivian.
The potential development of a mega-plant in the US would represent a massive step forward for Samsung SDI — the battery affiliate of the South Korean tech giant — which to date only has one facility outside of Asia, in Hungary.
Samsung will build all of the lithium-ion cells for the Amazon-backed pickup truck manufacturer, the two announced earlier in April.
While Rivian has yet to reveal its production targets, Bloomberg reports that the company will try to produce as many as 40,000 new EVs in its first year with that figure eventually rising to 300,000.
The US needs to dramatically ramp up its production of batteries in order to meet the demands of the domestic push towards EVs. President Joe Biden has already ordered his administration to address any vulnerabilities to large-scale plants that develop batteries for EVs.
Simon Moores, managing director at research group Benchmark Mineral Intelligence, suggested Samsung would have to build a local facility to meet Rivian's demands.
"A Samsung SDI battery cell plant in the US is an eventuality," he told Insider.
"At a production rate of 40,000 EVs a year, Rivian will need over 7 gigawatt-hours of lithium-ion battery cells annually. If all of this supply is from Samsung that's the equivalent of 12% of the Korean battery maker's annual capacity in 2020."
Moores said that shipping large quantities of lithium batteries over long distances was "difficult" and that they were registered as hazardous goods.
"Any multi-gigawatt-hour contract with an automaker will need a plant on the same continent," he said.
"Samsung's contract with Rivian will no doubt be the catalyst for its first battery megafactory in the US."
To date, Samsung SDI and China's CATL are the only top-tier battery suppliers that do not have a large-scale factory in the US.
Panasonic, LG Chem, SK Innovation, and Envision AESC all have cell plants or intend to build them by the end of this year already.
Megafactory is a coverall term usually used to describe factories that produce vast amounts of batteries, often for electric vehicle purposes. The term is often interchanged with "gigafactory", a phrase believed to be coined by Elon Musk at Tesla in 2013.
A spokesperson for Samsung said that they could not comment on specific details regarding one of their customers but said that there was "nothing decided about the construction of the factory in the United States".
Rivian also said it was unable to share details of its contract with Samsung but confirmed the Korean giant will "provide the battery cells for all Rivian vehicles at this time".
Earlier in the month, Reuters reported that General Motors agreed a deal with South Korean joint-venture partner LG Chem to build its second US battery plant in Spring Hill Tennessee.
There are around 200 battery megafactories dotted around the world, with the majority based in China.
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