LS Cable abandons round wire to focus on higher-value EV wire

LS Cable & System Ltd. has decided to give up the round wire business to concentrate on higher-value-added products used in electric vehicles (EV).

In a regulatory filing on Wednesday, the South Korean electric cable maker disclosed that it would stop producing and selling round wire, a form of magnet wire, starting Friday.

Up to now, LS Cable has produced three kinds of magnet wires for EV driving motors: round wire, flat and rectangular wire and high-function wire.

Round wire is the most widely used magnet wire, but it has faced limits in improving the space factor for enhanced efficiency.

The growth of the EV market has boosted demand for high-voltage, high-output, and large-capacity motors, leaving little room for round wire and providing more opportunities for flat and rectangular wire and high-function wire that can withstand higher usage.

"Round wire has limited use and low added value, limiting growth. But flat and rectangular wire has high density and high efficiency, so the market is growing rapidly," an LS official said.

LS is the exclusive supplier of flat wire for Hyundai Motor Co.'s Ioniq 5 and Kia Corp.'s EV6 vehicles.

"The decision will contribute to improving our profitability over the mid- to long-term. We will focus on flat rectangular wire and high-function wire," he added.

LS recently established LSEVC (LS EV Core) by separating its flat rectangular wire business unit, and decided to sell a 44.09% stake in the unit. It will use the proceeds to finance expansion of the business.

Last year, LS recorded 228.3 billion won ($180 million) of sales in the round wire business, which accounted for 3.7% of its consolidated sales.

Write to Seo-Woo Jang at suwu@hankyung.com