As the investment frenzy in artificial intelligence (AI) data centers reshapes the corporate value of the cable industry, Gaon Cable (000500.KS), which has secured a series of large-scale long-term supply contracts with global Big Tech firms in the United States, is emerging as a key player in AI data center power grids, moving beyond its role as a traditional cable maker.
According to industry sources on the 9th, Gaon Cable's U.S. subsidiary LSCUS has recently secured a series of long-term contracts to supply busduct for data centers with global Big Tech companies, expanding its presence in the North American AI data center market.
Busduct is an assembled power distribution device that places copper or aluminum conductors in a metal case to stably distribute large-capacity power. As a core power device for AI data centers with high power consumption, LSCUS is reported to have signed a busduct supply contract worth about 1.2 trillion won over three years with one global Big Tech firm, followed by a framework agreement worth about 4 trillion won over five years with another Big Tech firm, a contract format that sets long-term supply volumes.
These contracts carry significant weight because they are long-term supply agreements rather than one-off orders. Since the structure allows additional supply volumes to be added in line with customers' AI data center investments and new campus construction plans, there is speculation that the actual contract value could exceed the currently known figures.
Considering that Gaon Cable's consolidated revenue is around 2 trillion won, the recently secured long-term contract value far exceeds twice its annual revenue. Given the nature of framework contracts, additional orders are possible depending on customers' expansion plans, and the company is seen as having secured a foundation for mid- to long-term earnings growth.
The market is paying attention to how the key beneficiary industry of the AI era is expanding beyond semiconductors to power infrastructure. As competition intensifies to advance AI models and build ultra-large data centers, each data center requires anywhere from hundreds of megawatts (MW) to as much as 1 gigawatt (GW) of power, making the securing of transformers, power cables, and busduct essential.
Gaon Cable is also strengthening its AI power infrastructure value chain through synergy with LS Group affiliates. LS Cable & System is expanding its core power infrastructure businesses for the AI era, including extra-high-voltage cables, submarine cables, high-voltage direct current (HVDC) cables, and busduct, while also pushing ahead with the construction of a submarine cable plant in Virginia, U.S. In addition, LS Materials is targeting the data center, power grid, and energy storage system (ESS) markets with ultracapacitor products that compensate for power fluctuations.
The industry believes that the more AI data center investment expands, the higher the likelihood that Gaon Cable's corporate value will be assessed by a new standard. "In the past, data center beneficiary stocks were centered on semiconductor companies, but now market interest is shifting to infrastructure companies that supply and distribute power," an industry official said. "Since the long-term supply contracts LSCUS has secured carry more meaning than simple orders, Gaon Cable is highly likely to be reassessed as an AI data center infrastructure company."
