Trump Declares 'National Emergency'... Are There Stocks Set to Profit? [Weekend Money]
National Emergency Declared for Large-Scale Power Grid
"China to Be Excluded from AI Industry’s Power Supply Chain"
Korean Secondary Battery Makers Expected to Benefit
As U.S. President Donald Trump has declared a national emergency regarding the power grid system, analysts suggest that Korean secondary battery companies are expected to benefit from the decision.
Lee Chungjae, a research analyst at Korea Investment & Securities, projected, "With this measure, China will be completely excluded from the power supply chain for the U.S. artificial intelligence (AI) industry."
On August 26 (local time), President Trump declared a national emergency for large-scale power grid systems. The proclamation stated that "certain foreign entities" are exploiting vulnerabilities in major U.S. power systems, posing a serious threat to national security. Large-scale power systems are defined to include battery energy storage systems (BESS), uninterruptible power supplies (UPS), transformers, inverters, and other charging equipment.
Following the declaration of emergency and the issuance of executive orders, companies related to large-scale power systems in the U.S. must immediately take safety measures, such as removing and replacing equipment built by 'adversary foreign entities' designated by the Secretary of the Department of Energy. The import or use of products from these suppliers is also prohibited. Addressing this, Lee pointed out, "This might create additional replacement demand for secondary batteries and charging equipment included in large-scale power systems in the U.S." He added, "Excluding the European Union (EU), Korea, and Japan, China is essentially the only country worldwide capable of manufacturing secondary batteries and large-scale chargers."
He particularly emphasized that the possibility of Chinese secondary batteries being installed in BESS for U.S. data centers has now completely vanished. He stated, "Given the situation of the U.S. power industry, BESS is essential for operating new data centers," and "This measure has effectively made it impossible for Chinese competitors to enter the U.S. market." He further explained, "This will significantly enhance the bargaining power of Korean secondary battery manufacturers, and is rapidly improving the operating rates and profitability of Korean secondary battery production facilities constructed in North America."
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Lee maintained a 'Buy' rating for both LG Energy Solution and Samsung SDI.
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