Amprius Expands Korea Alliance: Incremental Manufacturing Boost Amid Persistent Risks

What happened

Amprius Technologies announced the expansion of its Korea Battery Alliance by adding three new contract manufacturers after a successful launch event in Daejeon, South Korea. This move reinforces the company's asset-light strategy to scale production of its silicon-anode batteries, as noted in filings that highlight contract manufacturing for up to 800 MWh pouch and 1 GWh cylindrical capacity. However, the expansion does little to address the deep-seated risks flagged in the DeepValue report, including unproven high-volume yields, persistent cash burn, and reliance on dilutive equity financing. While it may enhance supply-chain flexibility and support near-term revenue growth, especially for SiCore products, the core challenges of achieving cost competitiveness and sustainable profitability remain unchanged. Thus, this development is a positive but incremental step that fails to alter the high-risk investment profile centered on execution and valuation concerns.

Implication

Adding three contract manufacturers could increase production capacity and diversify the supply chain, potentially aiding revenue growth from SiCore batteries. Yet, this deepens reliance on external partners, exposing Amprius to geopolitical risks and operational vulnerabilities in key regions like South Korea. Near-term, it may improve order fulfillment but is unlikely to significantly reduce cash burn or accelerate the path to operating breakeven, as the company continues to report losses and negative free cash flow. Investors should monitor whether this leads to tangible margin improvements or new customer contracts, aligning with the report's watch items on manufacturing scale-up and customer traction. Ultimately, without evidence of sustainable positive cash flow and reduced dilution, the stock's rich valuation after a 415% run remains unjustified, reinforcing the 'WAIT' stance.

Thesis delta

The DeepValue report maintains a 'WAIT' recommendation due to Amprius's elevated valuation, unproven industrialization, and funding risks. This news of expanding the Korea Alliance aligns with the asset-light scaling strategy but does not mitigate core challenges like profitability or cash burn. Therefore, no shift in thesis is warranted; the stock remains a high-beta technology option with a thin margin of safety.