[From Top Engineers]⑥ "While Everyone Looks to Jung, We Prepared for the US"... LS Elec's 'US Pass' Secured 10 Years Ago Paid Off

Jangcheol Seo, CTO of LS Electric, Interview
"The Key is R&D... Over 5% of Sales Consistently Invested"
Prepared UL Certification, 10 Years Later, Competitiveness in the US Market
Focusing on the Distribution Market, Larger in Scale than Transmission

Editor's NoteSouth Korea's industry is facing a comprehensive crisis. The surge in raw material prices, the restructuring of global supply chains, and the US-China trade conflicts have all combined to worsen the business environment. The key to overcoming this crisis ultimately lies in technology. Technology is the lifeline and the value of a company’s existence. This is why companies are placing greater emphasis on the role of Chief Technology Officers (CTOs). CTOs have established themselves not merely as developers of new technologies but as strategists who analyze changing markets and present future visions for their companies. Asia Economy met with CTOs of major domestic companies to hear about the core technologies and differentiation strategies that each industry is focusing on. Through the technology strategies of leading companies, we seek ways to enhance the competitiveness of our industries and create future value.

Seo Jang-cheol, CTO of LS Electric, is being interviewed by Asia Economy at LS Yongsan Tower in Yongsan, Seoul. Photo by Jo Yong-jun

In the early 2010s, China was at the center of the global power infrastructure market. The United States received little attention except for equipment replacement demand. However, LS Electric began securing UL (Underwriters Laboratories) certification targeting the US market across various product lines from that time.

Generally, the IEC (International Electrotechnical Commission) standards are used in the global power equipment market, but to enter the US market, UL certification, which is essential for local distributors or consumers, must be obtained. UL certification is granted by UL, a private safety certification organization in the US, after testing and evaluation, guaranteeing that electrical and electronic products can be used safely without risks such as fire or electric shock.

Especially in the North American market, distribution itself is difficult without UL certification, making it a practical 'market entry right.' UL certification demands higher safety standards, such as insulation, than typical standards. In the market, it is said that obtaining UL certification for existing production items requires efforts comparable to developing new products. LS Electric committed to acquiring certifications for entry into the North American market even before the US power infrastructure market gained attention, and after 10 years, it has become the only domestic company holding UL certification for distribution boards, successfully establishing itself in the US market.

Seo Jang-cheol, CTO of LS Electric, is being interviewed by Asia Economy at LS Yongsan Tower in Yongsan, Seoul. Photo by Jo Yong-jun

Jangcheol Seo, Chief Technology Officer (CTO, Executive Director) of LS Electric, said in a recent interview with Asia Economy at LS Yongsan Tower in Seoul, "From the early 2010s, we anticipated the growth potential of the US market and dedicated the entire company to securing UL certification," adding, "This became a stable foothold for entering the North American market."

Last year, LS Electric secured contracts worth 1.3 trillion KRW in the North American market, steadily increasing its market share centered on US big tech companies. Following a contract exceeding 90 billion KRW for a 'data center project' last year, it signed a sales and supply contract worth approximately 162.5 billion KRW in March this year.

LS Electric has long invested a fixed portion of over 5% of its total sales into research and development (R&D). The company's sales last year reached 4.5518 trillion KRW, the largest among the domestic 'Big 3 Power Companies.' Applying the 5% figure, LS Electric's annual R&D budget amounts to at least 228 billion KRW.

CTO Seo presented three axes for R&D direction leading future markets: short-term, mid-term, and long-term. He said, "LS Electric’s first-mover initiatives, such as superconducting power systems and semiconductor transformers, are product groups that even the global Big 4 companies do not possess," adding, "We believe these will become game changers in the power market in the future, and we are conducting the first demonstrations and creating standards and regulations."

The technology he focuses on is high-efficiency power conversion, regarded as a core technology in the next-generation energy industry. The company is concentrating on developing technologies that increase power density while maximizing efficiency. A roadmap for the next five years has been established, including ▲improvements in high-efficiency power modules ▲commercialization of next-generation semiconductor technologies ▲expansion of eco-friendly energy solutions. CTO Seo mentioned, "We are also having 'concrete discussions' with domestic data centers."

Susol DC Circuit Breaker and Switchgear of LS Electric. Provided by LS Electric

According to CTO Seo, the recent power infrastructure 'boom' is shifting from transmission to distribution. While demand for ultra-high voltage transformers exploded to bring power from power plants to data centers, the next focus is distribution boards. If power has been brought in, the next step is the logic of how, where, and how much to distribute and use that power. The distribution market is typically 2 to 3 times larger than the transmission market. Due to the development of the artificial intelligence (AI) industry and the surge in data centers, its scale is expected to grow to more than six times that of transmission.

LS Electric has strengths in the 'distribution board' product group compared to competitors. CTO Seo said, "The market combined with distribution boards is the largest, and it will take other companies, such as those in Japan, more than 4 to 5 years to catch up," expressing confidence, "DC circuit breakers and switches are so competitive that they rank among the top three in the global market." He added, "Large markets like the US see a surge in transmission volume during aging infrastructure replacement issues, but after this cycle, demand fluctuates. We can flexibly respond to market volatility with transmission strategies aligned with market trends and strong distribution technology."

LS Electric has set a specific goal of '10 trillion KRW in sales by 2030.' CTO Seo explained, "Our goal is to achieve 10 trillion KRW in sales by 2030 by riding two super cycles: transmission and distribution."

The company is also targeting the European market, which has strong environmental regulations. Although many European companies excel in energy storage systems (ESS), LS Electric is currently the only supplier of DC circuit breakers and switches. Anticipating that the 'aging power grid replacement demand' that brought a boom to the US power infrastructure market will soon appear in Europe, preparations have begun. CTO Seo said, "Developing technologies to proactively respond to new regulations is directly linked to market entry," adding, "In material conversion, transformers have been switched to plant oil and are being supplied to Europe and domestically, and we maintain the top position in eco-friendly transformers, including molded transformers."

Seo Jang-cheol, CTO of LS Electric, is being interviewed by Asia Economy at LS Yongsan Tower in Yongsan, Seoul. Photo by Jo Yong-jun

CTO Jangcheol Seo cited 'K-Culture' as a reason for building trust in the global market in addition to technology development. He explained that the company approached the market with a mindset of 'going anywhere when customers call,' and as word of mouth spread, the number of customers seeking LS Electric gradually increased.

He emphasized that the industry is now in an era of 'national competition.' Since companies in countries like the US and China leverage government support to target markets, the government's role in strengthening the competitiveness of our industry is also important. He said, "Companies can no longer fight alone. We need the speed of rapid policy implementation and the budget execution capability to support it," adding, "We look forward to policies where the government and companies cooperate wisely."