The battery industry is moving toward a division of labour similar to semiconductors, with Western companies focusing on next-generation chemistry design and intellectual property while Asian manufacturers handle mass production, industry officials say. The shift reflects limits on building and running gigafactories, weaker manufacturing competitiveness in Europe and the United States, and U.S. rules requiring the exclusion of certain China-linked supply chains. A wider range of battery chemistries and growing small-lot demand are also accelerating outsourcing.

Battery use is expanding beyond electric vehicles and energy storage systems to server racks as AI data centres push rack power density higher. Facility-level uninterruptible power supplies are seen as less able to handle rapid power swings, lifting demand for rack-level battery backup units, or BBUs, defined in open rack standards such as OCP Open Rack V3. Samsung SDI forecasts the global BBU market at $800 million this year, up more than 70 percent, while suppliers prepare new products and production.