* To set up China JV to invest $600 mln in EV batteries over
* To build factory in Xi'an, near Samsung Electronic's chip
* Samsung SDI currently supplies batteries for BMW i3
(Add comment from company official, market context, share
SEOUL, Jan 23 South Korea's Samsung SDI Co Ltd
has signed a preliminary agreement to build an
electric car battery factory in China by next year, in
anticipation of a boom in a market backed by government
Samsung SDI, which also makes smartphone batteries and TV
displays, is investing after China's central government set a
target to have 5 million "new energy vehicles" - defined as
all-electric battery vehicles and "near all-electric" plug-in
hybrids - on the road by 2020.
Samsung SDI, an affiliate of Samsung Electronics Co Ltd
, will form a joint venture in China by April to
invest $600 million in the factory in Shaanxi province and in
other electric car battery-related businesses over the next five
years, the company said on Thursday.
The joint venture will consist of Chinese parts maker Anqing
Ring New Group and a company owned by the government of Shaanxi
province, Samsung SDI said, without identifying the latter.
The signing "will allow us to gain a foothold in the world's
biggest electric car market," Samsung SDI Chief Executive Park
Sang-jin said in a statement.
Samsung SDI will break ground for the factory in the latter
half of this year in the city of Xi'an, where affiliate Samsung
Electronics is building a chip factory.
The factory, which will be Samsung SDI's first overseas,
will open next year, could cater for current customer BMW
as well as car makers such as Volkswagen AG
who are rushing into electric cars in China,
Samsung SDI, which supplies batteries for BMW's i3 and
Chrysler's F500e electric cars, is in talks with Tesla Motors
Inc and other car makers to supply electric car
batteries, a Samsung SDI spokesman said previously.
Samsung SDI currently has electric car battery manufacturing
facilities in the southeastern port city of Ulsan in South
Shares of Samsung SDI were down 1.3 percent as of 0203 GMT,
underperforming the wider market's 0.7 percent decline.
(Reporting by Hyunjoo Jin; Editing by Michael Perry and