[Report] National Growth Fund Helps Overcome 'Death Valley'... Inside the All-Solid-State Battery Mass Production Hub [Change the Flow of Money] ①

'KRW 10 Billion from National Growth Fund'
Isu Nears Completion of Lithium Sulfide Mass Production Plant in June
Production Capacity to Expand from 40 to 500 Tons Annually...
Establishing a Supply Chain for All-Solid-State Battery Materials

Editor's Note
The Lee Jaemyung administration has declared a major shift toward "productive finance." The core of this policy is to redirect capital, which has been concentrated in real estate, toward advanced and strategic industries. As the global technological hegemony race expands into a "capital war," countries such as the United States, China, Japan, and those in Europe are pouring astronomical sums into strategic industries by combining state capital with private finance. In contrast, there is harsh criticism that Korea's financial sector remains stuck in a conservative structure centered on real estate collateral loans. There are growing concerns that continued distortions in resource allocation could leave Korea behind in technological competition. In response, the government has launched the 150 trillion won "National Growth Fund," combining policy and private finance, to kick-start this structural transformation. This series examines the necessity of productive finance, the limits of private finance, and the policy tasks ahead.

On the afternoon of April 20, at the Isu Specialty Chemical plant located in Onsan-eup, Ulju-gun, Ulsan. After passing through the plant entrance and moving further inside, four buildings, each about 20 meters tall, appeared on the vast site, which was filled with the acrid smell of sulfur. Inside, thick pipes intertwined like a web, and workers were busily connecting pipelines. The unique tension of a chemical plant nearing completion permeated the site. Here, an additional facility for producing lithium sulfide—a key material in all-solid-state batteries, which are considered "game changers" in the future battery market for electric vehicles and robotics—was being constructed. Final work was underway, targeting completion in June and commencement of operations in the second half of the year.

Test production was already underway at the demonstration plant adjacent to the mother plant. The company is currently producing lithium sulfide at a scale of 40 tons per year. When the mother plant, scheduled for completion in June, becomes operational, production capacity is set to increase to 150 tons in the first year and up to 500 tons in the mid to long term. In effect, a full-scale domestic production base for all-solid-state battery materials targeting the next-generation secondary battery market is being established.

Construction site of the lithium sulfide production facility inside the Isu Specialty Chemical plant located in Onsan-eup, Ulju-gun, Ulsan. The company is building a lithium sulfide production facility, a key material for all-solid-state batteries, aiming for completion in June. Currently, production capacity is about 40 tons per year, and upon the mother plant’s operation, it plans to increase capacity to 150 tons in the first year and 500 tons in the mid to long term. Provided by Isu Specialty Chemical.

This investment has been supported by funding from the National Growth Fund. The fund provided 100 billion won to cover plant construction and initial operating costs. For the project, which required a total investment of 85.2 billion won, a long-term loan structure with a term of 10 years and an interest rate in the low 3% range was applied. This is at least 1 percentage point lower than prevailing market rates, resulting in expected financial cost savings of over 10 billion won. Considering that Isu Specialty Chemical's annual operating profit last year was only 1.6 billion won, this represents extraordinary support. The company emphasized that, beyond the favorable interest rates, investment stability was the greatest benefit.

A company representative explained, "Previously, we faced significant interest rate volatility and repayment pressure due to one-year short-term borrowing structures. Now, with access to ultra-low interest funds on a long-term basis, our investment burden has been greatly reduced, and we can accelerate the establishment of a stable production system." The representative added, "Since attracting government investment, internal morale has risen, and other financial institutions have begun to offer additional funding proposals."

At the end of February, Kwon Daeyoung, Vice Chairman of the Financial Services Commission, visited the Isu Specialty Chemical Onsan plant—the only direct visit among companies invested in by the National Growth Fund—and toured the facility for about an hour. It is said that Vice Chairman Kwon handed his business card, with his personal contact information, to the plant's finance team leader who guided him, urging them to reach out at any time if difficulties arose. On-site, this was seen as a symbolic gesture demonstrating the government's strong commitment to support. The staff member said, "The advantages of low interest rates and long-term loans were so significant that I worked tirelessly since March last year to attract investment from the National Growth Fund. Being selected as an initial investee, and having Vice Chairman Kwon visit the plant and promise support, provided a huge boost."

This investment is regarded as a case in which policy finance proactively filled the funding gap at the initial technology mass-production stage, known as the "Death Valley," where private capital is difficult to attract. The decision to invest from the National Growth Fund was underpinned by the company's exceptional technological capabilities. Isu Specialty Chemical possesses hydrogen sulfide refining technology and holds patents for the production of high-purity lithium sulfide. Lithium sulfide is a core material for solid electrolytes in all-solid-state batteries and is considered a strategic material that will determine the success or failure of next-generation secondary battery commercialization.

Unlike conventional lithium-ion batteries, all-solid-state batteries use solid electrolytes instead of liquid electrolytes, greatly improving both safety and energy density. The industry anticipates commercialization by 2027, with Samsung SDI targeting mass production by then. Lithium sulfide accounts for about 40% of the cost of all-solid-state batteries, so demand is expected to surge as the market develops.

A company official stated, "China is catching up with aggressive price competition, but lithium sulfide is one of the few areas where Korean companies maintain a technological edge. With government support, we will rapidly build a large-scale mass production system and secure a lead in the high-quality all-solid-state battery materials market with unrivaled technology." The official added, "We are determined to make this business a success so that lithium sulfide can become a national strategic resource for Korea, comparable to China's rare earth elements."

Isu Specialty Chemical is also cited as a model case in the ongoing restructuring of the petrochemical industry. The company has upgraded its business structure by moving away from commodity products and commercializing high value-added chemical materials in oligopolistic sectors such as TDM, NOM, and NDM. This stands in stark contrast to the conventional petrochemical industry, which is struggling with oversupply. Such proactive business restructuring is believed to have positively influenced the National Growth Fund's investment decision.

Currently, there is a surge in demand for funding from the National Growth Fund. As of March, 181 investment requests, totaling 210 trillion won, had been received from companies, local governments, and related ministries.

An official from the Financial Services Commission stated, "Through the National Growth Fund, we will proactively invest in companies with funding needs, thereby driving the inflow of private capital and the growth of innovative companies. We plan to continuously expand funding across the entire spectrum of innovative industries."

This content was produced with the assistance of AI translation services.