SoftBank said it will turn Sharp’s former LCD plant in Sakai, Osaka into a large-scale zinc-halogen battery production site, with mass production scheduled for fiscal 2027. The initial target is 1 GWh of annual energy storage system output. South Korea’s Cosmos Lab and DeltaX Co. are part of the project, which is aimed at power storage for AI infrastructure, including data centers.
The plan goes beyond repurposing an idle factory. SoftBank is also considering investing tens of billions of yen by 2030 to expand capacity, with the goal of making the facility one of Japan’s largest battery production sites. The driver is clear: AI compute demand is rising fast, and the electricity gap facing data centers is becoming harder to ignore.
A former LCD facility gets a new industrial role
The Sakai plant once stood as a major asset in Japan’s LCD manufacturing sector under Sharp. SoftBank is now repositioning that site as a battery manufacturing base, shifting it from display panels to grid and backup storage. Based on the disclosed plan, the factory will focus on battery cell production tied to AI-related power infrastructure.
The company’s timeline points to the start of volume production in fiscal 2027, which in Japan begins in April 2027. At 1 GWh, the first phase is geared toward large storage use cases rather than consumer electronics.
Why SoftBank is choosing zinc-halogen over lithium
The technology choice is the central part of the announcement. Instead of conventional lithium batteries, SoftBank and its partners are backing zinc-halogen chemistry, which uses zinc and halogen compounds as core materials. According to the source material, this approach does not rely on lithium or cobalt, setting it apart from the dominant battery supply chain.
Cosmos Lab was identified as the key developer behind the technology. The reports cited in the source say zinc is relatively abundant, while halogen compound supply chains are more stable than those tied to lithium and cobalt. Major reserves are also less concentrated in China or in mining arrangements led by China. For SoftBank, that makes the project a supply chain decision as much as a manufacturing one.
The supply chain angle behind the partnership
Source material citing Seoul Economic Daily framed the deal as a move to challenge China’s dominance in battery materials. The basis for that view is the structure of the current market: the report says China controls more than 60% of global cobalt refining capacity, while processing of lithium battery cathode materials is also heavily concentrated there.
Against that backdrop, SoftBank’s partnership with South Korea’s Cosmos Lab gives the project a Japan-Korea supply chain dimension. The timing matters as well. The source notes that China has imposed export controls on several critical minerals this year, while the US, Japan, and South Korea are accelerating efforts to diversify access to strategic materials.
Energy storage becomes part of SoftBank’s AI buildout
Viewed more broadly, the battery plant extends SoftBank’s recent AI strategy. The source points to its investment in OpenAI, its role in the Stargate plan for large-scale AI compute deployment in the US, and its holding in Arm. Building energy storage capacity adds another layer: infrastructure support for the power needs of AI systems.
One quoted line captures the urgency: “The data centres cannot wait five years.” Grid upgrades take time. Restarting nuclear generation takes time too. AI training and inference demand power now. SoftBank’s answer is to secure part of that solution through storage manufacturing rather than waiting for the wider grid to catch up.
The source also notes that growing power demand from AI data centers is affecting other electricity-intensive sectors, including bitcoin mining operations. If zinc-halogen batteries reach scale and lower storage costs, grid pressure could ease to some degree, though that is not the stated purpose of SoftBank’s project.