LS Cable & System Breaks Ground on First U.S. Submarine Cable Plant... Road Named '1 LS Way'

At a time when the need to establish a local supply chain in the United States has emerged due to the Trump administration's tariff policies, LS Cable & System has begun construction of a submarine cable factory. This is the first case of a Korean company breaking ground after the launch of the Trump administration's second term. While there are concerns that tariffs on copper, the raw material for submarine cables, could have a negative impact, LS Cable & System plans to respond by leveraging local infrastructure competitiveness and growing product demand.

On the 28th (local time), at the groundbreaking ceremony of the LS Greenlink factory in Chesapeake, Virginia, USA, attendees including Glenn Youngkin, Governor of Virginia (fifth from the right), Bonkyu Koo, CEO of LS Cable & System, and Rick West, Mayor of Chesapeake, are taking a commemorative photo. LS Cable & System

원본보기 아이콘

LS Greenlink, a subsidiary of LS Cable & System, held a groundbreaking ceremony for its submarine cable manufacturing plant on the 28th (local time) in Chesapeake, Virginia. This plant, with a total investment of $681 million (approximately 1 trillion KRW), is scheduled for completion in the third quarter of 2027 and aims to begin mass production in the first quarter of 2028. It is expected to create more than 330 jobs.

LS Cable & System stated, "Through this investment, we plan to proactively respond to the U.S. supply chain independence strategy and establish a foothold to lead the global energy infrastructure transition," adding, "Given that the infrastructure for submarine cable production in the U.S. is extremely limited, this move holds significant strategic value in terms of expanding local procurement and ensuring supply chain stability."

◆Tariffs and Tax Credit Variables= Although the company is securing a local supply chain, concerns remain. The Trump administration is expected to impose tariffs on copper, the raw material for cables. Bonkyu Koo, CEO of LS Cable & System, said at a press conference, "Tariffs could be an issue, but currently, there are not many places in the U.S. that can manufacture cables like this. Even if tariffs are imposed, there will still be a market, and prices will be adjusted."

Tax credits are another variable. LS Cable & System is expected to receive about $48 million in subsidies and tax benefits from the state government of Virginia. Including the $99 million investment tax credit from the federal government under the Inflation Reduction Act (IRA), the total support amounts to $147 million (about 203.6 billion KRW). However, since President Trump is critical of the clean energy industry, there are concerns that the IRA tax credit could be abolished after his inauguration.

Shim Yoonchan, head of external relations at LS Greenlink, said, "The IRA tax credit was one of the reasons we chose the U.S. as an investment destination," adding, "We have been actively engaging with both parties in Washington, DC, and have received bipartisan support."

Aerial view of LS Greenlink's submarine cable factory in Virginia, USA. LS Cable & System

원본보기 아이콘

◆The Largest Submarine Cable Factory in the U.S.= Once completed, the new plant will become the largest submarine cable production facility in the United States. It will be built on a 396,700-square-meter site near the Elizabeth River, with a total floor area of about 70,000 square meters. LS Cable & System also plans to expand its facilities in response to global demand in the future. The site will include a dedicated port facility and a 200-meter-high power cable production tower, which is expected to become the tallest structure in Virginia.

Submarine cables are used to transmit electricity produced at offshore wind farms from the sea to the land. LS Cable & System is building its submarine cable plant in Chesapeake, near the eastern coast of the U.S., because most of the country's offshore wind farms are being developed along the East Coast.

However, LS Cable & System explained that, as President Donald Trump reversed energy policies during the Biden administration, the U.S. plant will focus primarily on products for export to Europe, rather than for domestic use, for the time being. Kim Kisoo, head of LS Greenlink, added that the company has already secured orders for 18 months' worth of products for export to Europe.

◆Even the Road Is Named '1 LS Way'= The groundbreaking ceremony was attended by Glenn Youngkin, Governor of Virginia, Tim Kaine, U.S. Senator, Rick West, Mayor of Chesapeake, and others. Bonkyu Koo, CEO of LS Cable & System, stated, "The construction of this plant marks a turning point for LS Cable & System to become a global energy infrastructure company," adding, "We will efficiently respond to the rapidly growing global demand for submarine cables based on the world's best manufacturing infrastructure."

Governor Youngkin praised the project, saying, "The groundbreaking of LS Greenlink is a symbolic example that demonstrates Virginia's innovation and manufacturing competitiveness. It will create hundreds of jobs and present a sustainable economic growth model." Mayor West announced that the road leading to the factory entrance has been named '1 LS Way' and presented the road sign as a gift to CEO Bonkyu Koo.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.