The South Korean government plans to significantly adjust its approach to grid expansion: the number of new transmission towers will be reduced by up to 40%, with more new transmission lines being laid underground to accelerate the overall speed of grid expansion.

The direct trigger for this adjustment is the continuous rise in electricity demand from data centers and semiconductor factories—these two types of major electricity consumers have much higher requirements for power access speed and stability compared to ordinary residents and commercial users. Traditional overhead transmission lines have long been constrained by land acquisition and resident opposition along the route, resulting in lengthy approval cycles. Underground lines can bypass many ground land acquisition coordination steps, becoming an alternative solution to speed up access.

The unit cost of underground lines is typically significantly higher than that of overhead lines, which is a well-recognized rule in the transmission industry. South Korea is clearly opting for "higher unit costs" in exchange for "faster construction speed and lower ground resistance," representing a proactive concession in cost structure rather than a simple technical upgrade choice.

Data centers and semiconductor manufacturing are the direct beneficiaries of this round of grid acceleration—South Korea is a core production hub for global memory chips, with major foundries like Samsung Electronics and SK Hynix located domestically. Coupled with the recent surge in AI computing power demand driving the construction of new data centers, these facilities have a much more urgent need for power access than what previous grid planning cycles could accommodate.

Reducing the number of transmission towers means less land occupation and visual resistance along the route in the future, but underground lines involve more complex geological exploration, municipal coordination, and longer construction periods for each segment. Whether the goal of "accelerating expansion" can truly be achieved depends on whether the capacity for underground engineering can keep pace with the expansion rhythm.

Mechanically, the direct beneficiaries of the grid acceleration are data center operators and semiconductor manufacturing companies, as the reduction in waiting time for power access directly impacts the production rhythm of their new capacity. The pressure falls on the entities responsible for grid construction and operation, which need to absorb the much higher construction costs of underground lines compared to overhead lines. This portion of the cost is likely to be passed on to electricity consumers and residents through electricity prices or special power infrastructure fees in the long term. For the transmission equipment supply chain, this represents a structural shift in demand—from traditional transmission towers and overhead wire suppliers to underground cable and utility tunnel engineering equipment suppliers.

Source: Public Information