LS Cable & System (006260.KS) has won a 4 trillion won order from a major US Big Tech firm to supply power equipment for artificial intelligence (AI) data centers. The deal marks the largest single order ever in Korea's cable and power equipment industry. Led by LS Cable & System, LS Group affiliates including LS Electric and LS Eco Energy (229640.KS) are spearheading the booming AI power equipment market, signing successive supply contracts worth hundreds of billions of won at overseas data center hubs.
LS Cable & System announced Tuesday that its subsidiary Gaon Cable (000500.KS) has signed a five-year long-term supply contract worth 4 trillion won with a major US cloud service provider (CSP) to deliver busducts, or power distribution equipment, for data centers. The customer is reportedly Meta, the Big Tech firm that operates Facebook.
Under the contract, LS Cable & System will supply busducts needed for dozens of data centers Meta plans to build in the United States over the five-year period through 2030. The products will be manufactured at LS Cable & System's Indong plant in Gumi, with production capacity to be expanded through the company's Mexico subsidiary, a 230 billion won facility set for completion this year, and the expansion of Gaon Cable's Jeonju plant.
LS Cable & System emphasized that the contract is the largest supply deal ever secured by a Korean cable or power equipment company. The single contract alone amounts to roughly half of last year's record annual revenue of 7.5882 trillion won and is equivalent to half of the company's order backlog of 7.63 trillion won.
Busducts are devices installed in grid patterns on data center ceilings to efficiently distribute electricity. They are considered essential equipment for large-scale data centers because they have lower power loss, heat generation and fire risk than ordinary cables. LS Cable & System has built recognition in the North American market under its "Busway" brand, and in November last year, it also signed a 500 billion won busduct supply contract with a US Big Tech firm.
LS Cable & System is also expanding supply of extra-high voltage cables, another essential piece of data center equipment. After winning a 700 billion won order in the United States in February, the company secured Kitanihon Electric Cable, which works with major Japanese utilities, as a customer, marking its first entry into the demanding Japanese market. LS Cable & System has also signed an extra-high voltage cable supply contract with Vietnam's Vingroup for the Haiphong new town project and partnered with a Malaysian data center operator, expanding into Southeast Asia. The company's Vietnam subsidiary LS-VINA holds an 80 percent share of the local extra-high voltage cable market.
LS Electric, which supplies transformers, switchgear and other essential data center equipment, is also reaping the benefits of the power equipment boom. LS Electric announced Tuesday that it has signed a $70 million (approximately 105 billion won) switchgear supply contract for a US Big Tech firm's data center. The company plans to also deliver vacuum circuit breakers (VCB), a key device for protecting high-voltage power grid systems, to demonstrate its technological capabilities.
Last month, LS Electric also successively secured a $220 million (approximately 330 billion won) contract with Bloom Energy, a 170 billion won contract with AWS, and a $70.26 million (approximately 105 billion won) contract with another energy infrastructure company.
The industry expects power equipment makers' orders to keep growing as Big Tech firms expand data center investments. Capital expenditure (CAPEX) by the four major CSPs — Amazon, Microsoft, Alphabet and Meta — is projected to reach $725 billion (approximately 1,090 trillion won) this year, up 77 percent from last year.
In response, LS Cable & System is pushing ahead with plans to build a submarine cable plant in Virginia at a cost of about 1 trillion won. LS Eco Energy, a subsidiary that previously focused on the Southeast Asian market, is also preparing to enter the North American market. LS Electric decided early this year to invest an additional $168 million (approximately 250 billion won) in its switchgear manufacturing subsidiary in Cedar City, Utah, to strengthen its local infrastructure.
