The domestic wire industry has secured order backlogs at record-high levels, driven by surging power demand from AI (artificial intelligence) data centers. Notably, even after delivering contracts worth trillions of won, the order backlog increased significantly. With power infrastructure demand expected to expand workloads in the medium to long term, companies are also accelerating their production capacity expansion.
According to semi-annual reports released by the wire industry on the 26th, LS Cable & System's order backlog as of the end of June this year reached 7.8336 trillion won. This follows an upward trend from 5.906 trillion won at the end of June 2024 and 5.6463 trillion won at the end of last June. Daesung Electric Power Corporation's order backlog also steadily increased, rising from 2.054 trillion won at the end of June 2024 to 2.8907 trillion won at the end of last June, and further to 4.0629 trillion won as of the end of June this year.
Notably, both companies delivered existing orders worth trillions of won yet saw their order backlogs grow annually. The order backlog refers to the value of contracted goods that have not yet been delivered to customers. For example, if a company secures a 10 billion won contract and delivers goods worth 3 billion won, that portion is recognized as revenue and removed from the order backlog. Without additional orders, the remaining backlog would shrink to 7.83 trillion won. As of the end of June this year, LS Cable & System and Daesung Electric Power Corporation had already delivered 1.8056 trillion won and 2.2917 trillion won, respectively, yet their order backlogs increased by 38.7% and 40.5%, respectively, compared to the same period last year.
The primary driver behind the rising order backlog is the increased demand for power infrastructure due to the spread of AI data centers. In February this year, LS Cable & System signed a contract worth 700 billion won to supply ultra-high-voltage cables in North America. Its subsidiary, Gaon Cable, also recently agreed to supply distribution cables worth approximately 50 billion won for a power plant construction project by a major U.S. tech company. Daesung Electric Power Corporation secured a contract last month for about 45 billion won to build 300kV (kilovolt) class power infrastructure for three AI data centers in Australia. Additionally, demand to replace aging power grids in North America and Europe has further boosted wire demand.
As existing orders are fulfilled while new work continues to accumulate, earnings visibility has also improved. Since the order backlog represents goods that will be converted into revenue upon delivery, it serves as a foundation for future performance. Investments in power infrastructure driven by AI data centers and the replacement and expansion of aging power grids have translated short-term demand into medium- to long-term workloads.
Power demand related to AI data centers is expected to persist in the future. Foxconn, a Taiwanese AI server manufacturing and assembly company, forecasts that global data center investment will reach 1.6 trillion U.S. dollars (approximately 2,115 trillion won) by 2030. Computing demand from data centers is projected to rise from 64 gigawatts (GW) in 2024 to 174 GW in 2030—an increase of about 2.7 times. To support this growth, analysis indicates that an additional power supply capacity of 18 GW per year will be required by 2030. In simple terms, this means the need to newly expand 18 units of 1 GW-class power generation facilities annually.
Both companies are expanding production capacity in line with their growing order books. LS Cable & System has begun construction of a submarine cable production base in Virginia, U.S., targeting operations in the first quarter of 2028. Domestically, it completed the fifth building at its Donghae facility last year and broke ground on the sixth building this year. Daesung Electric Power Corporation also started construction of a 400kV ultra-high-voltage cable factory in Vietnam last March, aiming for operations next year.
An industry official stated, "The fact that order backlogs are increasing even as existing orders continue to be fulfilled indicates the strength of power infrastructure demand, including from AI data centers." They added, "With the added demand for replacing aging power grids, medium- to long-term workloads have become more substantial."
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