Undersea cable manufactuered by LS Cable & System is shipped at a port near its plant in Donghae, Gangwon Province in this 2023 photo. Korea Times file

Shares of wire and cable manufacturers are on the rise, driven by the accelerated growth of artificial intelligence (AI), which requires more electricity to carry out data processing, and the price hike of copper, which accounts for 90 percent of wire and cable production.

LS, one of the world's biggest cable makers, gained more than 20 percent on the benchmark KOSPI since the beginning of 2024.

A fiber optic cable company, Taihan Cable & Solution, advanced nearly 30 percent over the same time period, while two other market players — Gaon Cable and Daewon Cable — gained nearly 90 percent and 110 percent, respectively.

"Generative AI models and relevant data centers require much more energy than in the past, and accordingly, demand for electric wires and cables will increase," Shinhan Securities analyst Kim A-ram said.

Kim noted data centers are anticipated to account for more than 4.5 percent of global energy usage by 2025, up from 0.9 percent in 2015.

Lee Min-jae, an analyst at NH Investment & Securities, said that digital technology firms in the United States and Europe are considering expanding data-related infrastructure around 2027.

"The expanded investment is optimistic for Korean wire and cable manufacturers as the quality of their product is globally recognized," Lee said.

Market observers pointed out that the higher price of copper is also pulling up prices of wires and cables and subsequently, the shares of the corresponding companies.

According to the London Metal Exchange, the price of copper increased 11 percent since the beginning of 2024 to $9,434 per ton as of April 17. This was the highest in the past 12 months.

Hwang Soo-wook, a Meritz Securities analyst, estimated that 3 million tons of copper may be needed for AI data centers by 2027.

"Such a possible scenario means the annual copper price may go up by 24 percentage points on average," Hwang said.