Smart Factory
LS ELECTRIC is establishing its first North American production base in the state of Texas in the U.S. This move comes as demand for distribution systems, an essential power infrastructure for factories, is rapidly increasing. This is due to Korean companies in the semiconductor, automobile, secondary battery, and home appliances sectors collectively building production plants in the U.S. amid escalating U.S.-China tensions.
According to industry sources on July 9, LS ELECTRIC purchased land and associated facilities spanning 46,000 m² in southern Bastrop, Texas, on June 23. A building of 3,700 m² is situated on this plot. LS ELECTRIC plans to refurbish the building for production and expand the factory onto the vacant land in the future. A research and development (R&D) center will also be established.
LS ELECTRIC acquired MCM Engineering II, a power distribution panel manufacturer in Utah, the U.S., last year, but it is a small-scale company mainly producing military supplies, so this is the first time that LS ELECTRIC has set up a proper distribution system production plant in the U.S. Until now, the company’s overseas factories were only located in Asia, including China, Vietnam, and Japan.
The distance between the factory site purchased by LS ELECTRIC this time and the Samsung Electronics Foundry factory in Taylor, Texas, which is currently under construction, is only about 55 km. LS Electric had previously signed a contract in November last year to supply a distribution system worth 174.6 billion won (US$134.0 million) to Samsung Electronics’ Taylor factory.
In addition to Samsung Electronics, LG Energy Solution, SK on, and POSCO Chemtech, which have production bases in North America, are expected to be major customers of the LS ELECTRIC Texas factory. LS ELECTRIC is actually supplying distribution systems to the electric vehicle battery joint factory that SK on and Ford are building in Kentucky, the U.S., and to the joint factories that LG Energy Solution and GM are building in Ohio, Tennessee, and Michigan. Thanks to such aggressive orders, the company's North American sales in the first quarter increased by 368.3% year-on-year to 923 billion won.
LS ELECTRIC’s electric vehicle parts subsidiary, LS e-Mobility Solutions, is also preparing to build a production base in Mexico this year and target the North American electric vehicle market. The factory here, with an annual area of 35,000 m², will start the mass production of core electric vehicle parts such as EV relay and BDU from next year.
In addition, LS Group’s U.S. affiliate, Superior Essex, succeeded in raising US$150 million through domestic private equity funds and others in May. Superior Essex, the fourth largest telecommunications line in North America, plans to invest this capital in expanding its telecommunications cable business in the U.S.