Aleees-KY to Invest NT$1 Billion in New Factory, Expected to Contribute Revenue in Second Half of 2027

The AI boom is driving up demand for data centers, triggering a severe power shortage crisis in the United States and accelerating the shift of large-scale energy storage systems (ESS) toward lithium iron phosphate (LFP) batteries. To seize this business opportunity, Aleees-KY (5227-TW) has approved a major investment plan, including participation in the capital increase of its subsidiary Taiwan Aleees Power and investing NT$1 billion to lease facilities and purchase equipment.

Aleees-KY stated that the new factory, selected in either Tainan or Taichung to meet order demands, is scheduled to officially commence operations in October of this year, with revenue contributions expected to begin in July next year.

With 20 years of深耕 in the battery materials sector, Aleees-KY is currently the only Taiwanese manufacturer outside of China capable of mass-producing lithium iron phosphate battery materials. Its products are precisely targeted at the three fastest-growing end-use markets: AI data centers, energy storage systems, and electric vehicle batteries.

As AI data centers demand stable baseload power and emergency backup, the U.S. market is increasingly adopting lithium iron phosphate batteries as energy storage solutions. Leveraging its strong R&D capabilities and irreplaceable non-China supply chain advantages, Aleees-KY has naturally become a core strategic partner for major international tech giants.

Benefiting from the global supply chain restructuring, Aleees-KY has achieved breakthrough progress this year, securing a 20-year ultra-long supply contract with electric vehicle leader Tesla (TSLA-US) to fully support U.S. domestic market demand. Under the agreement, Aleees-KY will supply Tesla with at least 100,000 metric tons of LFP precursor materials annually, injecting substantial long-term growth momentum into the company’s fundamentals.

To rapidly fulfill the production capacity required for these large orders, Aleees-KY’s board has approved the investment of NT$1 billion to purchase machinery and lease factory space. With strong support from the Tainan City Government, including cross-departmental administrative efficiency, the factory is most likely to be located in Tainan rather than Taichung. The company plans to relocate all existing production lines from Taoyuan to Tainan. While the relocation may temporarily reduce revenue, operational adjustments will allow the company to concentrate resources and capital on profitable U.S.-bound products, eliminating past loss-making revenue streams—a necessary condition for survival.

Analysts point out that with the new factory launching in October 2024, revenue contributions starting in July 2025, the 20-year Tesla contract, and the explosive demand for AI-driven energy storage, Aleees-KY has already established an indispensable strategic leadership position in the global AI and electric vehicle battery key materials supply chain.

Additionally, Aleees-KY will participate in a NT$600 million capital increase by its subsidiary Taiwan Aleees Power, with an issuance price of NT$10 per share and a subscription rights base date scheduled for August 16.