Gaon Cable to Double U.S. Production Capacity, Eyes Gains from Power Grid Investment

Supplying URD Cables to U.S. Solar Power Plants
Growing Demand for Power Generation and Grid Cables Anticipated
KRW 500 Billion in Exchangeable Bonds Issued, Increasing Circulating Shares

As investment in power infrastructure expands in the United States, Gaon Cable is seeing more opportunities for its local business. In addition to supplying power cables to solar power plants, the company is now responding to demand related to nuclear and gas power generation, as well as artificial intelligence (AI) data centers.

The rise of AI data centers is driving up power demand in the United States, leading to simultaneous investments in both power generation facilities and transmission and distribution networks. As facilities for solar, nuclear, and gas power generation increase, building power grids to transmit the generated electricity to data centers and industrial facilities becomes essential.

Gaon Cable supplies underground residential distribution (URD) cables to solar power plants in the United States. URD cables are used to collect electricity generated in power plants and send it to the distribution grid.

The company has also established a local manufacturing base in the United States. Its subsidiary, LS CUS, produces power cables in Tarboro, North Carolina. Among Korean cable manufacturers, Gaon Cable is the only one producing power cables locally in the United States.

LSCUS, Gaon Cable's production subsidiary in the United States. Gaon Cable.

LS CUS will invest an additional $50 million to more than double its power cable production capacity. Local manufacturing enables the company to reduce tariffs and logistics costs and shorten delivery times.

Gaon Cable has also secured track records in supplying cables for power plants. The company will supply distribution cables worth approximately KRW 50 billion to a power plant project initiated by a major U.S. tech company for supplying electricity to its AI data center. It is also working on supplying busducts for data centers.

Accordingly, Gaon Cable's supply areas are expected to expand to include power plants, transmission and distribution networks, and data centers. Domestically, the company recently expanded its cable applications by supplying them to floating solar projects, having previously focused on ground-based solar installations.

If investments in nuclear and gas power generation in the United States accelerate, demand for power cables is highly likely to increase. This is because constructing a new power plant requires the simultaneous buildup of both internal distribution grids and external transmission and distribution networks.

In the stock market, there is speculation about a possible increase in the volume of shares available for trading. On September 11, the largest shareholder, LS Cable, announced plans to issue KRW 500 billion worth of exchangeable bonds (EB) using 1,851,851 shares of Gaon Cable that it holds as the underlying asset for the exchange. The exchange price is KRW 270,000 per share.

Since EB does not involve issuing new shares, the total number of Gaon Cable's outstanding shares does not increase even when the exchange rights are exercised. This structure enables LS Cable's shares to be distributed in the market without diluting the stakes of existing shareholders.

An industry official from the securities sector said, "Investments in power generation facilities in the United States will inevitably lead not only to the procurement of equipment for nuclear and gas plants, but also to investments in transmission and distribution networks. Gaon Cable is expected to benefit from the expansion of power infrastructure investment, given its local U.S. production base and supply track record for power plants."

This content was produced with the assistance of AI translation services.