LS Electric quietly dominating key U.S. sector, sets sights on Texas data centers

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LS Electric quietly dominating key U.S. sector, sets sights on Texas data centers

Published: 10 Nov. 2025, 07:00

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

LS Electric's switchgear [LS ELECTRIC]

[NEXT CHIP]

For decades, semiconductors and automobiles have dominated Korea’s exports, driving growth and defining its global trade identity. But as shifting global dynamics and mounting uncertainty over U.S. tariffs unsettle traditional trade patterns, a new industrial order is taking shape. Sectors such as shipbuilding and defense are emerging as the next engines of growth. In our “Next Chip” series, we examine the rise of these industries and their potential to reshape Korea’s economic future.

As Korea channels billions of dollars into U.S. investments year after year, a Korean electrical equipment company has been quietly accruing comparable profits with understated precision while it prepares for the next shift in the market.

LS Electric commands over 90 percent of Korean firms’ North American orders for switchgears, which are panels or assemblies equipped with circuit breakers, disconnectors and other protective devices used to control, protect, measure and distribute electricity safely within power systems.

The Korean switchgear makers' orders in the United States are surging, driven by the recent boom in AI and ensuing spike in data centers that fuel the demand. LS Electric’s switchgear order backlog stood at 70 percent for the first half of the year. In the second quarter alone, switchgear sales grew 45 percent year-on-year, outpacing transformers, which rose 30 percent.

Fortunately for the company, alternatives have been scarce in the U.S., a market worth roughly 30 trillion won ($20 billion). LS Electric stands out as the only Korean electrical equipment firm to hold UL certification, making it virtually indispensable for domestic companies establishing factories stateside when it comes to switchgear supply.

While switchgear is less costly than transformers, which other Korean firms concentrate on, its applications are far broader, making it essential in virtually every building. Switchgear is also not subject to 50 percent tariffs, in contrast to what transformers face under Donald Trump’s new tariff policies.

“LS Electric has been preparing for its North American expansion for over a decade by securing UL certification for this mature and highly regulated market, which also comes with formidable barriers to entry,” said Lee Chung-hee, senior vice president leading LS Electric Americas, a division responsible for all U.S. operations, in a written interview with the Korea JoongAng Daily.

Lee Chung-hee, senior vice president leading LS Electric Americas [LS ELECTRIC]

From Texas to the whole U.S.
Based in Texas, a recognized tech hub, LS Electric has set its sights on luring U.S. Big Tech firms, as the state is already home to mega-scale data centers by Microsoft, Google and Meta.

Its Texas Bastrop campus, completed in April and spanning 3,300 square meters, is slated to commence full-scale production of medium- and low-voltage electrical equipment and switchgear destined for local data centers operated by Big Tech.

“LS Electric plans to invest an additional $240 million in the United States by 2030 to expand its U.S. production facilities and strengthen its capacity to support local projects,” Lee said.

“Recently, we have succeeded in supplying power infrastructure for ‘microgrid’ systems that use distributed energy to serve data centers.”

LS Electric's manufacturing plant in Texas, where it produces medium- and low-voltage electrical equipment and switchgears for local clients. [LS ELECTRIC]

LS Electric is also open to mergers and acquisitions, following the history of its successful acquisition of MCM Engineering, a California-based switchgear manufacturer. Acquired in 2022, LS plans to invest 350 billion won by 2030 to expand its plant's capacity.

“We are keeping several options open and conducting a wide-ranging review regarding the acquisition of local power equipment companies and the expansion of our sales subsidiaries,” Lee said.

LS Electric operates a Western office in California, a Chicago-based subsidiary in Illinois and a subsidiary dedicated to energy storage system business in North Carolina, along with a sales and distribution network covering about half of the United States.

LS Electric's manufacturing plant in Texas, where it produces medium- and low-voltage electrical equipment and switchgears for local clients. [LS ELECTRIC]

Expanding into high-voltage transformers
Having made its mark in switchgear, LS Electric is now stepping up its game, broadening its portfolio to high voltage transformers.

The surge in so-called “electricity-hungry” data centers has driven strong demand for transformers, which is also coupled with the need to replace aging power infrastructure in the United States. A 2020 report by the U.S. Department of Energy (DOE) revealed that nearly 70 percent of large power transformers nationwide have been in service for more than 25 years, with the average life expectancy being between 38 and 40 years.

However, supply is struggling to keep pace with demand, leading to a growing imbalance in the market. While the closure of aging power plants is accelerating, the development of renewable energy is largely concentrated in only Sun Belt states such as Texas, California, Arizona and Florida. Meanwhile, data centers are heavily clustered in Virginia, creating a notable supply-demand mismatch.

“One U.S. client, investing heavily in building a large language model machine learning data center to compete with OpenAI, faced indefinite delays in receiving electrical equipment from a major European supplier,” Lee said.

“They eventually contacted us; we successfully delivered the equipment within a three-month period, which later enabled us to become the preferred bidder for the client’s mega-scale AI data center. This has in turn linked to deals sized hundreds of millions of dollars,” Lee added.

LS Electric currently holds an order backlog, meaning orders that have been made by customers but not yet delivered, of 3.9 trillion won, with more than half of that coming from North America. Of this, the order backlog for high-voltage transformers alone is reaching 1.8 trillion won, showing it will be a significant and growing part of LS Electric's business going forward.

While the backlog varies by product, it roughly represents about five years’ worth of work for the company.

BY SARAH CHEA [[email protected]]