--- title: "Korea" canonical: "https://anchor.is/the-hysteresis/issue/3/korea" publication: "The Hysteresis" publisher: "The Hysteresis" language: "en-US" guide: "https://anchor.is/the-hysteresis/llms.txt" permalink: "https://anchor.is/the-hysteresis/issue/3/korea" issue: 3 section: "korea" description: "LG, Samsung, SK — beyond the headlines" authors: ["Elise Huan-Cartwright","Ronan Adike"] published: 2026-06-29 updated: 2026-06-27 articles: 12 --- # The Hysteresis > The Hysteresis exists to give a small cross-functional team — strategy, investment, and procurement — a shared weekly instrument for reading the battery supply chain earlier than consensus. Success means the team consistently identifies inflection points in cell pricing, supplier health, and policy enforcement weeks or months before they surface in earnings calls, annual surveys, or trade press. The commercial mechanism is internal-first: the publication proves itself as a decision tool inside the organization, then extends to paid subscribers and a practitioner community as upside. Revenue follows utility — if the team makes better-timed procurement calls and competitive assessments because of what they read here, the publication earned its place. [Read on the website]() ## Issue 3 — Korea LG, Samsung, SK — beyond the headlines ### Supplier Qualification Snapshot Q1 2026 filings are in. All three Korean makers lost money on batteries. All three are running below 50% utilization on 2025 baselines that no primary filing has refreshed. None has published enough to constitute PFE compliance evidence at the constituent-material level. Below: a card for each company plus shared baselines on utilization and compliance. Financial health, ESS execution markers, and compliance signals are surfaced as reported. Losses narrowed across the board QoQ. The underlying economics, stripped of 45X credits where disclosed, remain deeply negative. The gap between announced ESS ambition and documented, verifiable reality is still the defining feature of this supplier set. - **Sub-50% Utilization Across All Three, Data Stale** — [Source]() — Published 2026-06-26 Tag: Utilization Baseline 2025 annual figures: LGES 47.6%, Samsung SDI ~50%, SK On 48.7%. No Q1 2026 filing updates these numbers. Discount any announced ESS capacity target against this trailing baseline until a primary source refreshes it. Effective FEOC-compliant supply is a fraction of nameplate. - **Biggest ESS Footprint, Deepest Underlying Hole** — [Source]() — Published 2026-06-26 Tag: LGES Status Q1 2026 reported operating loss: KRW 208B. Production incentive: KRW 190B, down from KRW 333B QoQ. Strip the credits and the loss runs ~KRW 398B, though that improved from ~KRW 455B prior quarter. Targeting 50+ GWh North America ESS capacity; LFP running at Lansing with a claimed 10%+ landed-cost advantage. 90 GWh 2026 new-order target. No named non-PFE cathode supplier in public filings. - **Best PFE Signal, Incentive Contribution Still Opaque** — [Source]() — Published 2026-06-26 Tag: Samsung SDI Battery segment loss: KRW 177B, narrowed from KRW 339B QoQ. 45X contribution not broken out separately. The L&F LFP cathode deal (KRW 1.6T over three years starting 2027) is the clearest named PFE-mitigation move any Korean maker has made publicly. StarPlus LFP mass production targeted Q4 2026. ESS prismatic line at full-capacity sales of 20 GWh. - **Heaviest Losses, Korea ESS Win, US Absent** — [Source]() — Published 2026-06-26 Tag: SK On Segment operating loss: KRW 349.2B, narrowed from KRW 440.8B QoQ. North America sales weakened; Europe and Asia recovered. Won 284 MW in Korea's second ESS government tender, taking 50.3% of total allocated capacity. No US ESS production footprint. No disclosed LFP program or named cathode supplier for PFE purposes. - **Zero of Three Show Public PFE Proof** — [Source]() — Published 2026-06-26 Tag: Compliance Evidence No company has disclosed MACR assumptions, constituent-material cost shares, or 45X eligibility evidence in any reviewed public filing. Samsung SDI's Q1 deck references having "built SCM for non-PFE LFP materials." That's directional language, not documentation. For now, qualification decisions rest entirely on private diligence. Public data cannot underwrite a compliance determination for any of the three. ### LGES Earnings Decomposition - [LGES Q1 2026 — Underlying Loss Narrowed. The Subsidy Bridge Narrowed Faster.]() — By [Elise Huan-Cartwright]() · Published 2026-06-26 · Format: The Earnings Decomposition LGES's ex-incentive operating loss narrowed KRW 57B QoQ in Q1 2026, the first reversal of underlying deterioration since Q3 2025. Reported loss deepened KRW 86B because the NA production incentive dropped KRW 143B to its lowest disclosed quarterly level. The underlying business improved; the credit bridge thinned faster. For buyers sizing LGES as a BESS cell supplier, the divergence raises a specific timing question: can ESS production volume rebuild the credit base before the financial runway between here and scale runs out? Five sites, 50+ GWh target, no disclosed yields. ### Samsung SDI Compliance Signal - [Samsung SDI's Non-PFE Signal Stops at the Cathode]() — By [Ronan Adike]() · Published 2026-06-26 Samsung SDI's Q1 2026 filing states it has "built a non-PFE LFP material supply chain." Among the three Korean makers, this is the most explicit compliance-direction signal on the public record. The architecture: a [KRW 1.6T cathode deal with L&F](https://www.samsungsdi.com/sdi-now/sdi-news/4822.html) starting 2027, StarPlus Indiana [converting existing NCA lines to LFP](https://news.metal.com/newscontent/103934426) for Q4 2026 mass production, and KRW 3.5T+ in announced ESS contracts produced at StarPlus. Samsung SDI remains North America's sole non-Chinese prismatic ESS cell supplier, a structural differentiator where buyers require the format, though many US BESS integrators have historically been format-agnostic. ### Source Trail - **Korean Battery Makers' Utilization Rates Collapse Below 50%** — [Source]() — Published 2026-06-26 Cross-company utilization figures from 2025 annual reports — the denominator you need before discounting any announced FEOC-compliant ESS capacity. - **Korea's Battery Industry Enters a Phase of Utilization Adjustment** — [Source]() — Published 2026-06-26 SMM's independent sub-50% utilization confirmation across LG, Samsung SDI, and SK On, with the framing that this is cyclical timing rather than structural — a claim worth tracking against Q2 actuals. - **Samsung SDI Signs Mid- to Long-term LFP Cathode Material Supply Deal with L&F** — [Source]() — Published 2026-06-26 The primary disclosure behind Samsung SDI's PFE-mitigation supply chain: named cathode supplier, specified US facility, Q4 2026 LFP production target, but no public MACR documentation trail. - **China's 314 Ah Storage Cell Prices Climb More Than 20% in Six Months** — [Source]() — Published 2026-06-26 The price signal that defines the ESS pivot window: Chinese LFP cell costs are recovering from their floor, narrowing the gap Korean makers must close to compete on unsubsidized economics. - **IRS Notice 2026-15: MACR Safe Harbors for PFE Compliance** — [Source]() — Published 2026-06-26 The actual legal mechanics behind PFE compliance: MACR thresholds, constituent-level cost tracing requirements, and the six-year audit exposure window that shapes every Korean maker's sourcing calculus. ## Other sections in Issue 3 - [Signal]() - [China]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()