■ Secures $46 million 'U.S. AI Data Center Power Network Project' to be delivered by February next year
■ Microgrid deemed essential infrastructure for data center power supply, anticipating market expansion
■ Potential for additional orders leveraging technical capabilities and brand recognition; fast-growing momentum in the U.S. market
LS ELECTRIC has recently announced a contract to supply distribution solutions valued at $46 million (approximately 64.1 billion won) for a U.S. hyperscale AI data center power infrastructure project.
This project is for providing power supply to a global major big tech company's AI data center, with LS ELECTRIC responsible for the distribution solutions for gas power facilities within the microgrid. The project period is from February to July next year, during which they will sequentially supply the distribution switchgear package.
Currently, in the U.S., there is a surge in demand for AI and cloud computing, causing issues with stable power supply for data centers. Due to a lack of power and an aged transmission network, newly constructed data centers prefer microgrids that generate their own electricity and use it more efficiently rather than connecting to existing power systems.
As a representative company in Korea's smart grid and microgrid sector, LS ELECTRIC is evaluated to have global competitiveness in DC (direct current) power devices required for distributed power. Thus, through this project, they plan to accelerate their penetration of the North American market with distribution solutions optimized for data center microgrids.
LS ELECTRIC, having been the only domestic heavy electrical company to acquire the essential UL certification for entry into the U.S. distribution market over a decade ago, has expanded its North American business through power infrastructure projects accompanying the local facility investments of major Korean companies like LG, Samsung, SK, and Hyundai.
Recently, they have been focusing on expanding their business targeting local distribution networks while increasing their market share in decentralized energy, data centers, and manufacturing plants. Since last year, they have been supplying distribution power devices to major big tech companies, concentrating on the data center power infrastructure market.
Their North American sales last year were approximately 13 trillion won, with over 70% being accounted for by distribution systems such as medium- and low-voltage power devices and distribution switchgear like circuit breakers and switches.
Amid the recent expansion of the North American data center market, interest in LS ELECTRIC's distribution solutions has increased, leading to ongoing discussions with multiple big tech companies about establishing power infrastructure. With the contract for the AI data center project, the company anticipates officially embarking on business.
With the growth of data center and power infrastructure businesses, a rapid increase in demand for large-scale power infrastructure, distribution switchgear, and other power systems is expected. The annual growth rate of global data center power demand is estimated at 11% from 2023 to 2028. When combined with the power demand from energy-intensive AI (artificial intelligence) servers, it is expected to increase by an average of 26-36% per year. Thus, the company plans to continuously expand its share in this market.
According to the industry, the global power grid investment is expected to triple from $235 billion last year to $532 billion by 2030 and $636 billion by 2050. With such a rapid increase in global power demand, LS ELECTRIC plans to maintain its leadership in the upcoming distribution market, ensuring delivery competitiveness through a firm production infrastructure and efficient inventory management, along with additional investments in major global bases.
An LS ELECTRIC official stated, "Though a big tech company is the final client, we cannot disclose specific names due to NDA (Non-Disclosure Agreement)." He added, "Nevertheless, being selected as a supplier of power infrastructure for the large-scale AI data center of a representative global IT company proves our technical reliability in the global market."
He continued, "With the growing spotlight on microgrid-based power infrastructure due to the AI data center-induced power supply shortage, follow-up orders from the same client are likely within this year. Similar projects are scheduled across the U.S., offering significant growth momentum in the North American distribution market."