"If short-term financial performance had been our goal, we would have given up quickly. We took on the challenge with the mindset of becoming a local operator in Indonesia."
On the 29th, Chae Min-young, Head of Data Center Business Division at LG CNS (LG Cee En Ess), said this at the "2026 AI Infrastructure Frontier Conference" held in Hall B of COEX in Seoul Samsung-dong. On that day, Division Head Chae shared his experiences and know-how regarding LG CNS's entry into the Indonesian AIDC (AI Data Center) market.
LG CNS was the first domestic company to win a contract for an Indonesian AIDC construction project. The company is currently on the verge of completing the Phase 1 project, which has a capacity of 30 MW (megawatts), and is in the design stage for Phases 2 and 3. LG CNS positioned Indonesia as a hub for expanding into Singapore and other countries. Division Head Chae stated, "Singapore has recently gained attention, but due to a surge in data centers leading to power shortages, it declared a 'data center moratorium.' Indonesia is close to Singapore, and cables, which serve as the lifelines of AIDCs such as submarine cables, are on an increasing trend."
A modular approach is also necessary. In September last year, LG CNS unveiled a "prefab (prefabricated) modular data center," in which standardized modules containing GPUs (Graphics Processing Units), servers, and power and cooling equipment are pre-manufactured and then installed on-site. This method reduces on-site construction processes to shorten the build period and allows for scale expansion by adding modules in response to increasing AI demand. Division Head Chae explained, "Modular construction has the advantage of speed, but it also saves the trouble of securing local labor by sending factory-made modules overseas." He added, "In overseas markets such as the United States and Japan, modular methods are being considered even for ultra-large-scale AIDCs."
Four decades of domestic data center business operation experience is a weapon. LG CNS built Korea's first dedicated data center in Incheon in 1992, and in 2019, it was the first to introduce the DBO (Design, Build, Operate) business model domestically, which involves handling everything from design to construction and operation of customer-invested data centers. Currently, the scale of data centers operated by LG CNS for external customers is approximately 350 MW. In the first half of this year, the company won a large-scale DBO project worth over 1 trillion won, including the Samsong Data Center in Goyang-si, Gyeonggi Province.
LG CNS started from scratch. Division Head Chae said, "We started in a country where people thought LG CNS was a refrigerator manufacturer." He explained, "In a state where we had very little, we went out with just one thing: 'operation.'" While global big tech companies sometimes design, build, and operate data centers themselves, most companies use data centers operated by specialized firms. LG CNS sells "operation" to its clients.
The key was collaboration with local partners. Rather than unilaterally transferring its advanced technology, the company seeks excellent local partners to work with. LG CNS provided know-how in operation, design, and construction, as well as modular manufacturing capabilities, while local partners handled permits and investment attraction. Division Head Chae stated, "A model where local partners fill our gaps and help expand the business is faster and has a higher success rate."
Although they received power from the Indonesian government, they plan to resolve future needs through the BYOP (Bring Your Own Power) method. Division Head Chae said, "We must pay attention to generation methods such as SMRs (Small Modular Reactors) for the entire project to run smoothly." He added, "'Mutual benefit,' where operators provide electricity when the power grid is strained, is also necessary."
in TECH
