LS Cable & System Ltd. is set to receive 136 billion won ($98.62 million) in tax credits from the United States federal government to build a new submarine cable factory in the country. With the United States poised to witness a significant uptick in demand for power cables, driven by advancements in artificial intelligence (AI), semiconductor, and electric vehicle factories, the submarine cable market is projected to grow at a robust average annual rate of 30 percent over the next decade.

The United States Department of Energy (DOE) announced on Friday that LS GreenLink USA Inc., LS Cable & System’s U.S. corporation, secured a tax credit amounting to nearly $99 million for its investment in the new submarine cable factory under Section 48C of the U.S. Inflation Reduction Act (IRA).

With advances in AI and EV plants, demand for power cables is likely to surge further fueled by the expansion of offshore wind power projects, making the submarine cable market one of the key sectors in the United States as well as Europe and China. But few companies are capable of mass-producing submarine cables in the United States, thus opening opportunities for LS Cable & System.

LS Cable & System anticipates leveraging its early entry into the U.S. market to gain a significant competitive advantage while exploring opportunities to build submarine cable plants in Europe and Vietnam as well as in the United States.

LS Eco Energy Ltd., an affiliated energy firm in which LS Cable & System holds a majority stake, inked a memorandum of understanding (MOU) with PetroVietnam Technical Services Corporation (PTSC), a subsidiary of Vietnam‘s state-owned oil and gas giant PetroVietnam, to collaborate in the submarine cable sector in 2023. PTSC’s involvement in constructing offshore wind farms in southern Vietnam, as part of the government‘s ambitious plan to develop approximately 6 GW of offshore wind farms by 2030, is also suggestive of continued opportunities for LS Cable & System to grow beyond expectations.

By Choi Hyun-jae and Han Yubin

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