As South Korea prepares to announce a significant energy investment in the United States, the cable industry is emerging as a key beneficiary, particularly with Gaon Cable, the only domestic cable manufacturer with a power cable production facility in the U.S. The company is well-positioned to respond directly to the expanding local power infrastructure investments.
According to industry sources on September 16, the government is actively pursuing investment projects in the U.S., which prominently include large-scale gas combined cycle power plants and nuclear power construction. The expansion of power sources is crucial to meet the rapidly increasing electricity demand driven by the proliferation of artificial intelligence data centers (AIDC) in the U.S.
As investments in power generation facilities rise, there will also be a corresponding increase in investments in transmission and distribution networks that connect the generated electricity to data centers and industrial facilities. The demand for power cables is expected to grow as the number of power sources, including solar, nuclear, and gas, increases.
Gaon Cable's strength lies in its local production capabilities in the U.S. Its subsidiary, LSCUS, produces power cables in Tarboro, North Carolina. Gaon Cable is the only domestic cable manufacturer with a power cable production facility in the U.S.
To meet the rising electricity demand in the U.S., Gaon Cable is investing an additional $50 million in LSCUS and is more than doubling its local power cable production capacity. This local production not only reduces tariffs and logistics burdens but also enhances delivery times and supply stability, adding to its competitive edge.
The growth of Gaon Cable's U.S. operations is reflected in its financial performance. LSCUS recorded approximately 470 billion won in revenue last year and is expected to double that figure this year, driven by increased supply of power cables for U.S. solar power plants and AIDC.
Gaon Cable supplies underground residential distribution (URD) cables for solar power plants in the U.S., and as solar power expands, the supply volume is also increasing. Exports of cables for AIDC and solar power networks from Gaon Cable's headquarters are projected to rise from about 100 billion won last year to around 200 billion won this year.
As solar power becomes a major component of new power generation facilities in the U.S., solar power plants have become a solid foundation for Gaon Cable's growth. With the anticipated acceleration of nuclear and gas power construction through South Korea's investments in the U.S., the potential for expanding demand sources is significant.
AIDC represents another growth avenue. Gaon Cable supplies distribution cables for not only global big tech data center power networks but also for its own power plant projects aimed at AIDC power supply. LSCUS's bus duct sales are also expected to increase from hundreds of billions of won last year to thousands of billions this year.
For Gaon Cable, the expansion of investments in specific power sources is not the only focus. Whether it is solar, nuclear, or gas power, as power generation facilities increase, investments in power networks to deliver the generated electricity to demand sources must follow.
Gaon Cable is expanding its business scope from URD cables for solar power plants to cables for power plants and transmission networks, as well as internal bus ducts for data centers, creating a comprehensive power infrastructure that connects generation, transmission, and AIDC.
The expansion of its U.S. operations is also contributing to overall revenue growth. In the first half of this year, consolidated revenue reached 1.633 trillion won, a 27.3% increase compared to the same period last year. Operating profit rose to 64 billion won, marking a 41.8% increase and setting a record for the highest performance in a half-year.
A securities industry official stated, "Investments in nuclear and gas power in the U.S. are likely to lead to follow-up investments in transmission and distribution networks. Gaon Cable, being the only domestic cable manufacturer with a local power cable production base in the U.S. and already showing rapid growth in solar and AIDC, should be recognized as a key beneficiary of the expansion in U.S. power infrastructure investments."
* This article has been translated by AI.
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