By Dr. Raj Talluri, President and CEO
Recently, we announced the acquisition of Routejade, a well-established coating and battery pack manufacturing company based in South Korea. This acquisition offers many strategic advantages that will prove instrumental in our journey to scale as a vertically integrated high volume battery manufacturer.
Routejade is a fantastic company that’s been making batteries for 20 years. The team is comprised of 168 people who share our manufacturing excellence mindset. They have two factories housing four battery production lines and two electrode coating lines. Routejade has an established customer base in IoT and the South Korean military and more than 90 global patents and patent applications.
As a newer entrant, we can learn a lot from them. They are experts in electrode coating and pack manufacturing, which are strategic imperatives to Enovix’ long-term success. They also have the ability to make different sizes and shapes of batteries, all of which are incredibly complementary to Enovix.
What is coating?
Batteries are made up of electrodes — a cathode and an anode, plus a separator. Simply put, battery electrodes are made starting with a dry powder that is mixed and turned into a slurry that’s coated on metal foils, dried, then rolled up and sold. Coating is a core technology in the manufacturing process and most successful battery manufacturers have this capability in-house.
Before acquiring Routejade, we received “coated rolls” from them and a few other suppliers. Now, having this capability in-house, we will save time and costs. As a material agnostic battery manufacturer, it’s even more critical that we have the ability to try out the latest and greatest materials to offer a superior battery technology in terms of energy density and capacity to our customers. With Routejade’s expertise and equipment, we now have the ability to coat in-house and purchase powder directly from raw material suppliers, so we’re not relying on so many third-party vendors.
What are packs?
Another strategic advantage of acquiring Routejade is their ability to make battery packs. Many consumer electronics companies don’t want to purchase separate battery cells and assemble them into packs themselves. Packs are comprised of several cells with electric circuitry to create a battery. Now we have the ability to offer complete pack solutions to our customers built fully in-house, further saving time and costs and increasing revenue opportunities.
Where does coating and pack manufacturing fit into our manufacturing process?
With this acquisition, we’re lowering our costs, speeding up R&D, enhancing our manufacturability and growing our footprint in Asia. It’s a win-win-win-win.
If you’d like to hear more details about this news, listen to our podcast: https://www.buzzsprout.com/2240960/13634798 or find the press release here: https://ir.enovix.com/news-releases/news-release-details/enovix-acquire-routejade
Forward-Looking Statements
This blog contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about us and our industry that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “will,” “goal,” “prioritize,” “plan,” “target,” “expect,” “focus,” “look forward,” “opportunity,” “believe,” “estimate,” “continue,” “anticipate,” and “pursue” or the negative of these terms or similar expressions. Forward-looking statements include, but are not limited to, statements regarding our expectations regarding, and our ability to respond to, market and customer demand, our customers’ releases of products using our batteries, our financial and business performance, projected improvements in our manufacturing, commercialization and R&D activities. Forward looking statements also include the following regarding the acquisition of Routejade: our expectations regarding Routejade’s coating capabilities, the business expectations of Routejade, the ability to realize synergies from Routejade, the ability to accelerate product development, the ability to realize materials cost-down efforts, the reduction of future capital expenditures by $35 million for coating capacity, the ability to realize accretive battery business focused on Military and IoT end markets with growth potential and opportunity to convert customers to premium silicon cells. Actual results could differ materially from these forward-looking statements as a result of certain risks and uncertainties, including, without limitation, our ability to improve energy density among our products, our ability to establish sufficient manufacturing and optimize manufacturing processes to meet demand, sourcing or establishing supply relationships, adequate funds to acquire our next manufacturing facility, market acceptance of our products, changes in consumer preferences or demands, changes in industry standards, the impact of technological development and competition, and global economic conditions, including inflationary and supply chain pressures, and political, social, and economic instability, including as a result of armed conflict, war or threat of war, terrorist activity or other security concerns or trade and other international disputes that could disrupt supply or delivery of, or demand for, our products. For additional information on these risks and uncertainties and other potential factors that could affect our business and financial results or cause actual results to differ from the results predicted, please refer to our filings with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q and other documents that we have filed, or that we will file, with the SEC. Any forward-looking statements made by us in this release speak only as of the date on which they are made and subsequent events may cause these expectations to change. We disclaim any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise, except as required by law.
