Secures $46 Million U.S. AI Power Grid Project
Essential Infrastructure for Data Center Power Supply
Microgrid Market Expected to Expand
Technical Expertise and Brand Recognition Fuel Hopes for Additional Contracts
LS Electric announced on September 3 that it has recently signed a contract to supply power distribution solutions as part of a power infrastructure project for a hyperscale artificial intelligence (AI) data center in the United States. The contract is valued at 46 million dollars (approximately 64.1 billion won).
This project is aimed at supplying power to the AI data center of a major global big tech company. LS Electric will be responsible for providing power distribution solutions for the gas power generation facilities within the microgrid. The project period is scheduled from February to July next year, during which LS Electric will sequentially supply power distribution panel packages.
Currently, the United States is experiencing a surge in demand for AI and cloud computing, which has led to challenges in ensuring a stable power supply for data centers. With power shortages and an aging transmission grid, newly built data centers are increasingly favoring microgrids based on distributed energy, which allow them to generate and use electricity more efficiently on-site, rather than relying solely on existing power systems.
LS Electric is recognized for its global competitiveness in direct current (DC) power devices required for distributed power sources. Leveraging this project, the company plans to accelerate its expansion into the North American market by leading with power distribution solutions optimized for data center microgrids.
Over a decade ago, LS Electric became the only domestic heavy electric equipment company to obtain the essential 'UL certification' for entering the U.S. power distribution market. Since then, the company has expanded its North American business by building power infrastructure for local facilities of major Korean companies such as LG, Samsung, SK, and Hyundai Motor.
Recently, LS Electric has also been expanding its business to local distribution networks, focusing on increasing its market share in distributed energy, data centers, and manufacturing plants. In particular, the company has concentrated on the data center power infrastructure market and has been supplying power distribution equipment to major big tech companies since last year.
Last year, LS Electric's North American sales reached approximately 1.3 trillion won, with over 70% coming from power distribution systems such as medium- and low-voltage power devices, including circuit breakers, switchgear, and power distribution panels.
With the recent expansion of the North American data center market, interest in LS Electric's power distribution solutions has grown, leading to ongoing discussions with multiple big tech companies regarding power infrastructure projects. The company expects that winning this AI data center project will enable it to fully launch its business in this sector.
As the data center and power infrastructure businesses grow, demand for large-scale power infrastructure and power systems, such as power distribution panels, is expected to increase explosively. The global data center power demand is estimated to grow at an average annual rate of 11% from 2023 to 2028. When including the data power demand from energy-intensive industries like AI servers, the annual growth rate is projected to reach 26-36%. LS Electric's strategy is to continuously expand its market share in this sector.
According to industry sources, global investment in power grids is expected to grow from 235 billion dollars last year to 532 billion dollars by 2030 and 636 billion dollars by 2050, tripling over the next 30 years. With worldwide power demand expected to grow rapidly, LS Electric plans to maintain its leadership in the power distribution market by leveraging its robust production infrastructure, efficient inventory management, and additional investments in major global hubs to further strengthen its delivery competitiveness.
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