The dispute between LS Cable and Daehan Cable over technology leaks has escalated beyond a simple criminal case, reflecting intensified competition for dominance in the domestic undersea cable market. As global investments in offshore wind and power networks increase, undersea cables have emerged as a key growth area in the wire and cable industry, heightening tensions between industry leader LS Cable and challenger Daehan Cable.
On May 28, the Southern Gyeonggi Provincial Police Agency referred 13 individuals, including an executive from Daehan Cable, as well as three corporations—Daehan Cable, Gaun Architectural Firm, and a construction company—to prosecutors for violating laws on unfair competition and trade secret protection.
This development is expected to further escalate the conflict between the two companies. According to industry sources, LS Cable has effectively led the domestic market in the undersea cable sector. High-voltage undersea cables require significant investment in large-scale facilities and extensive production and construction experience. Competing in this market involves more than just manufacturing products; it requires expertise in cable design, insulation technology, operation of manufacturing facilities, quality verification, and experience in offshore installation. As a result, it has been viewed as a market where latecomers struggle to gain a competitive edge in a short time.
Daehan Cable has recently expanded its investments, positioning undersea cables as a future growth driver. The company has established a production base for undersea cables in Dangjin, South Chungcheong Province, and has entered the global bidding competition, directly challenging LS Cable. Industry analysts suggest that the movement of personnel from LS Cable and the use of related technologies have sparked tensions as Daehan Cable accelerates its entry into the undersea cable market.
To support its entry into the undersea cable market, Daehan Cable has made substantial investments. Following the establishment of its first undersea cable factory near the Godeabu Pier in Dangjin, the company is also pursuing additional investments aimed at producing high-voltage direct current (HVDC) undersea cables. Daehan Cable has been working to secure dedicated cable-laying vessels and expand international certifications, striving to broaden its foundation for winning global projects. However, if the ongoing investigation leads to prosecution and subsequent trials, it could burden Daehan Cable's accumulated investment achievements and credibility in securing contracts.
LS Cable has raised concerns that Daehan Cable's expansion into the undersea cable business may infringe upon its core technologies and know-how. The company argues that information related to the design and production processes of undersea cable factories is not merely documentation but trade secrets accumulated over years of trial and error. In contrast, Daehan Cable contends that it has pursued its business through independent investments and technology development.
In response to the referral to prosecutors, LS Cable claimed it has suffered damages amounting to billions of won due to the situation, while Daehan Cable has reportedly denied the allegations, asserting that the contested information does not qualify as trade secrets.
Industry observers note that the fundamental reason for the ongoing conflict is the expanding market itself. Undersea cables are critical infrastructure connecting offshore wind farms to onshore power grids. Demand for power network expansion is growing not only in Europe and the United States but also in Asia, making this a market that domestic wire and cable companies cannot afford to overlook. Securing a supply record can influence subsequent project bids, making technological leadership and trust essential in the competition.
There are concerns that this dispute could become an unexpected variable in the government's energy highway policy. The energy highway aims to expand large-scale power networks connecting renewable energy generation sites with power demand areas, with undersea cables and high-voltage transmission networks as key components. If the technological dispute between domestic companies drags on, it could raise concerns about supply stability and impact decisions on project orders, certifications, and delivery timelines.
The possibility of a prolonged legal battle between the two sides is also being discussed. This could involve ongoing police investigations, prosecutorial judgments, civil claims for damages, and further disputes over trade secret violations. A key issue will be determining the extent to which undersea cable technology is considered a trade secret and how to distinguish between accumulated experience and company-owned technology during personnel transitions.
If the conflict continues, it could impose burdens on the entire domestic undersea cable industry. In the global market, European and Chinese companies are competing for large projects. A prolonged legal battle between domestic firms could raise questions about technological stability and supply reliability in bidding processes.
An industry insider remarked, "Undersea cables are set to become the most important growth market for the wire and cable industry, so the clash between leading and emerging companies was somewhat anticipated. This issue has escalated beyond the question of specific personnel or document leaks to encompass the leadership of the domestic undersea cable market and the stability of the national power grid project."
* This article has been translated by AI.
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