Only Korean cable maker with a US power cable factory

Expanded local production expected to ease tariff burden

Infrastructure investment set to grow if Korea-US energy projects proceed

A view of LSCUS, Gaon Cable's US manufacturing subsidiary. [Gaon Cable]
A view of LSCUS, Gaon Cable's US manufacturing subsidiary. [Gaon Cable]

Gaon Cable, a subsidiary of LS Cable & System, announced Friday it will invest $50 million in its US subsidiary LSCUS to more than double local cable production capacity.

Gaon Cable is the only Korean cable maker with a power cable factory in the United States. The investment is expected to reduce tariff and logistics costs while improving delivery times and supply stability.

The company also anticipates indirect benefits from South Korea's large-scale energy investment push into the United States.

Projects under consideration as part of the government's US investment drive include large combined-cycle gas power plants and nuclear power plant construction. As power generation investment picks up, demand is expected to grow not only for nuclear and gas power equipment but also for transmission and distribution networks connecting generated electricity to data centers and industrial facilities — all of which would boost demand for the power products Gaon Cable mass-produces.

Orders are already coming in. Gaon Cable is supplying underground distribution URD cables to solar power complexes in the United States and providing distribution cables for private power plant projects serving AI data centers. On the back of consecutive orders, the company's exports of cables for AI data centers and solar power grids to the US market are forecast to grow from about 100 billion won ($73.1 million) last year to 200 billion won this year.

The string of orders has driven sharp earnings growth. LSCUS sales this year are expected to roughly double from last year's 470 billion won. Bus duct sales are also projected to rise from the hundreds of billions of won last year to the trillions of won range this year.

Driven by strong US business performance, Gaon Cable's consolidated sales for the first half of this year reached 1.63 trillion won, up 27.3 percent from the same period a year earlier. Operating profit hit a record 64 billion won for a half-year period, up 41.8 percent year on year.

To sustain the momentum, the company plans to expand its business scope. Using its US production base, Gaon Cable intends to build a value chain spanning power generation, transmission and distribution, and AI data centers — covering URD cables for solar farms, cables for power plants and grid networks, and bus ducts inside data centers.

"US investment in nuclear and gas power generation is likely to trigger follow-on investment in transmission and distribution networks," a securities industry official said. "Gaon Cable is the only Korean cable maker with a local power cable production base in the United States, and it is already posting sharp growth in solar and AI data center segments. It deserves attention as a prime beneficiary of expanding US power infrastructure investment."


yeongdai@heraldcorp.com