Shares of South Korea's three major system integration (SI) companies have surged, breaking free from their previous undervaluation as they were often seen merely as internal trading firms. The shift in global artificial intelligence (AI) investment from hardware, particularly semiconductors and servers, to the software and infrastructure needed to implement AI in real-world applications has positioned Samsung SDS, LG CNS, and Hyundai AutoEver as key players in the AI transformation era.
According to the Korea Exchange, as of 2 p.m. on June 1, Samsung SDS shares rose 25.8% to 376,000 won. Hyundai AutoEver saw a 4.6% increase, reaching 974,000 won, while LG CNS climbed 17.2% to 133,400 won, leading the overall strength in the SI sector.
The emergence of AI has been driven by infrastructure companies focused on graphics processing units (GPUs), servers, and networking equipment, primarily led by Nvidia. However, as businesses move beyond merely considering the adoption of generative AI to actively implementing it across factories, logistics centers, and data centers, the role of SI companies in building and operating these systems is becoming increasingly significant.
Analysts note that the benefits of AI investment are shifting from hardware to software and system integration. There is growing demand for AI data center construction, smart factory enhancements, and the development of robotic control platforms, all of which require the expertise of SI firms.
The revenue structures of SI companies are also undergoing rapid changes. Previously, they relied heavily on maintenance-focused business models after system implementation, which limited their corporate valuation. In contrast, businesses related to AI data centers, AI transformation, and robotic operation platforms have high technological entry barriers and long-term contracts, allowing for stable revenue generation. Continuous operational and management revenue post-implementation is expected to enhance profitability and growth compared to the past.
Samsung SDS is accelerating its push into the infrastructure market by expanding its AI data center business, leveraging its capabilities in enterprise cloud and high-performance computing (HPC). As the adoption of generative AI becomes more widespread among companies, the demand for data centers for AI training and inference is expected to grow significantly.
LG CNS is emerging as a leader in the 'physical AI' sector, which involves AI controlling robots and equipment in real-world environments. The company is expanding its platform business that connects AI and robotics, drawing on its digital transformation experience in manufacturing and logistics. The rapid increase in the proportion of AI and cloud business indicates a shift from traditional SI services to AI service-oriented operations.
Hyundai AutoEver is expected to benefit from the transition to software-defined vehicles (SDVs) and the expansion of its robotics business. As the Hyundai Motor Group increases its investments in autonomous driving and robotics, the demand for vehicle software and robotic operating systems is also rising. The market anticipates that as robotics become more prevalent, robotic control platforms will emerge as a new growth driver, generating recurring revenue.
An industry insider commented, "The recent surge in stock prices signals a shift in how the market evaluates SI companies. Previously, reliance on affiliates was seen as a discount factor for corporate value, but in the AI era, the ability to implement AI in industrial settings and operational experience has become the key competitive advantage."
* This article has been translated by AI.
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