The company will invest a total of KRW1.7tn ($1.3bn) in phases to build the plant in Seremban until its completion in 2025.
The Samsung SDI Energy Malaysia (SDIEM) factory will manufacture PRiMX 21700 cylindrical batteries, with production expected to begin in 2024.
Samsung SDI president and CEO Yoonho Choi said: “Today’s groundbreaking ceremony will serve as a starting point for realising our vision to become a Global Top Tier Company by 2030.
“With successful completion and early stabilisation of Plant II, we will make SDIEM the centre of the global battery industry.”
The company said it had decided to build its second factory in Malaysia following a recent increase in demand for cylindrical batteries.
The global cylindrical battery market is estimated to grow at an annual rate of 8% on average, reaching 15.11 billion cells in 2027 from 10.17 billion cells at present.
Samsung SDI’s new plant will produce batteries for a variety of applications, including electrical tools, micro-mobility and electric vehicles (EVs).
The firm’s first Malaysian factory produces cylindrical batteries for EV customers, according to Reuters. The company also has production sites in the US, South Korea, China and Hungary.
Negeri Sembilan First Minister Aminuddin Harun said: “Investments from high-impact industries such as Samsung SDIEM are integral to our vision of driving robust economic growth in Malaysia and Negeri Sembilan, which is outlined in our Malaysia Vision Valley 2.0 plan.
“Samsung SDIEM’s investment to be the pioneer in EV battery cell manufacturing in Seremban will continue to create jobs for the youth and spur more opportunities for local businesses.”