LS ELECTRIC announced on October 19 that it has concluded a long-term supply agreement with a US big tech company for power distribution solutions destined for North American data centers. The deal is valued at roughly USD 126.75 million and spans the two years from 2027 to 2028.

The stated contract figure reflects the volume scheduled to be delivered in 2027, while the 2028 portion will be determined through further discussions with the customer.

38kV switchgear to anchor AI data center power

Under the agreement, LS ELECTRIC will provide 38kV-class high-voltage switchgear, which the company describes as core power infrastructure for data centers. The equipment distributes high-voltage electricity stably across facilities and protects equipment from power anomalies.

AI data centers require uninterrupted, large-scale electricity delivery around the clock, so the company states that its products must meet demanding reliability and quality standards.

Procurement moving toward long-term commitments

LS ELECTRIC observed that the world's major big tech firms increasingly prefer long-term supply agreements when securing the power solutions they consider essential for building AI data centers.

While concerns about a possible artificial intelligence bubble have surfaced, the company anticipates that competition among global big tech players to secure data centers will intensify, further pushing power solution procurement toward long-term contract structures.

Talks underway on extra premium equipment

Beyond the high-voltage switchgear, LS ELECTRIC is negotiating to supply additional premium power equipment tailored for data centers.

The items under discussion include low-voltage switchgear, distribution-class transformers, and RMUs, or Ring Main Units, which are high-voltage gas load break switches.

US production footprint credited for the win

The company attributed the contract to its ability to satisfy customers' stringent quality standards, respond quickly on delivery, and manage customers closely through localization.

LS ELECTRIC said it has established a customer-tailored response system that runs from design through production, delivery, and commissioning, reinforcing its capacity for stable supply.

Anchored by LS ELECTRIC Utah in Cedar City, Utah, and the Baytown Campus in Texas, the company operates a locally complete value chain spanning sales, design, production, and service, allowing it to react promptly to local customer demand.

Revenue base expansion planned

An LS ELECTRIC official said the long-term supply agreement came about thanks to the company's world-class data center solution technology and the trust accumulated through executing customer-tailored data center projects.

The official added that the company intends to broaden its supply of high value-added products for data centers to build a stable revenue base and maximize profitability.