Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
ESG, supply chain stability loom large in subsea cable sector amid tech theft dispute
An overview of LS Cable & System's production line in Donghae, Gangwon Province / Courtesy of LS Cable & System
By Lee Min-hyung
As the ongoing investigation into Taihan Cable & Solution’s alleged theft of LS Cable & System’s submarine cable technology moves to prosecutors, the global energy market is closely watching how the legal outcome will reshape the international competitive landscape.
The submarine cable sector is currently riding an unprecedented supercyle driven by a surge in artificial intelligence data centers, ultrahigh-voltage transmission networks and offshore wind power developments.
Mega-sized projects using high-voltage direct current systems are expanding rapidly across Europe and the United States, driving a steep increase in global demand.
Unlike conventional manufacturing, submarine cable contracts are uniquely forward-looking, with suppliers typically locked in three to four years before actual construction begins. Because of this multiyear timeline, project owners place heavy emphasis on a manufacturer's long-term production viability, financial health and operational reliability.
Modern procurement standards have evolved beyond mere pricing and technical specifications. Environmental, social and corporate governance (ESG) compliance and supply chain security are now paramount evaluation criteria.
"Major utilities in Europe and the U.S. are consistently increasing the weight of ESG compliance in their bidding processes," an official from the cable industry said. "A supplier's risk management capabilities and long-term project continuity have become decisive factors."
Another official said that while an active investigation does not bar a company from bidding, global clients are highly sensitive to legal exposure.
"For massive infrastructure ventures, clients conduct comprehensive audits on a supplier's legal risks. It is only natural that they are tracking this case with keen interest," the official added.
The importance of ESG is growing rapidly in the global cable industry, as the market sharply expands.
LS Cable & System recently secured a massive 2.5 trillion won ($1.62 billion) international supply contract, while Gaon Cable clinched a 4 trillion won deal via its U.S. subsidiary to power a data center from a big tech firm there.
Given the soaring strategic value of ultrahigh-voltage infrastructure, experts suggest that any ensuing civil litigation over trade secret misappropriation could trigger unprecedented financial fallout. With current market valuations factored in, some critics project that potential damages could realistically escalate into the trillions of won.
"The global submarine cable market has entered an era of unparalleled growth," an industry official said.
"The market pays sharp attention to the trajectory of the investigation at a time when sustainable governance and supply chain stability are evaluated as key factors along with technical prowess.”