South Korean private equity firm IMM Private Equity is planning to sell its Taihan Electric Wire shares. It bought 67.1 percent of the electric wire manufacturers’ shares in 2015. The possibility that the shares could be bought by Chinese capital is rising along with concerns over technology leakage.
At present, the extra-high voltage cable market is being led by South Korean companies such as Taihan Electric Wire and LS Cable & System. Taihan Electric Wire developed 500 kV cables for the first time in South Korea in 2010 and the item has been the company’s major export item since then. 500 kV is the maximum voltage that is currently commercially available for underground cables and a very small number of South Korean, European and Japanese companies are currently capable of manufacturing that type of cables.
Market research firm Goulden recently said that the global extra-high voltage power transmission cable market is estimated to grow from US$35.5 billion in 2017 to US$43.3 billion in 2022 with advanced economies placing more and more demands to replace aerial cables with underground cables.
“Extra-high voltage cables in general have a power transmission capacity of 6.6 kV or more and Taihan Electric Wire and LS Cable & System are supplying 500 kV products as industry leaders,” said an industry source, adding, “Although Chinese companies are trying to catch up with the South Korean suppliers, their capacity still stands at 300 kV or so.”
As in the case of display and semiconductor, the electric wire industry is one of those where the Chinese government is trying to grow local companies to an internationally competitive level. “The Chinese government is trying to accelerate the growth of the local electric wire industry by, for example, amending relevant laws so that only high-purity copper is used for higher-quality electric wires,” the industry source explained, continuing, “If Taihan Electric Wire is taken over by China, price dumping will follow within a few years.”