Shares of South Korean cable and power equipment makers, including Gaon Cable (000500.KS), surged after Amazon signed a deal with U.S. generator maker Generac to supply power equipment for its data centers. Investors read the deal as a signal that artificial intelligence data center spending is spreading beyond chips and servers into power generation and transmission gear.
Gaon Cable traded at 316,000 won as of 2:13 p.m. on the 18th, up 21.31% from the previous close, according to the Korea Exchange. Taihan Cable & Solution (001440.KS) rose 9.89% to 31,100 won. Large-cap power equipment makers also advanced, with LS (006260.KS) up 5.84%, LS Electric up 3.71%, Sanil Electric (062040.KS) up 4.23%, Iljin Electric (103590.KS) up 8.83%, Hyosung Heavy Industries (298040.KS) up 1.47% and HD Hyundai Electric (267260.KS) up 2.53%.
The rally was sparked by an Amazon contract announced overnight on the New York market. Generac, a U.S. generator maker, said it will supply backup generators for Amazon's data centers from next year through 2028 in a deal worth $2.4 billion, with purchase agreements running as high as $8 billion over the longer term. Generac shares jumped more than 20% that day. Analysts said the deal lifted sentiment across South Korea's power value chain because it showed Big Tech data center spending beginning to translate into actual orders for power infrastructure.
Cable makers are rallying because the sector is directly exposed to U.S. demand, analysts said. Surging data center power consumption, combined with demand to replace aging U.S. grids, is driving more orders for transmission and distribution cable. Gaon Cable and Taihan Cable already run projects in the U.S., putting them in line to benefit directly.
Sentiment is also supported by the government's push for investment projects in the U.S., where energy infrastructure is cited as a core business. More nuclear and gas-fired generation capacity in the U.S. would inevitably require larger investment in transmission and distribution networks.
Earnings back up the expectations. Gaon Cable's consolidated revenue for the first half of this year rose 27.3% from a year earlier to 1.633 trillion won, while operating profit climbed 41.8% to 64 billion won, a record for a half-year period. The gains came from increased supply of power cables and bus ducts for U.S. solar farms and AI data centers.
