Samsung C&T eyes US data center development business

Samsung C&T's trading unit is moving into US data center development, with the most likely approach being to secure sites in advance, build out initial infrastructure and then sell the assets. The push aims to capture a share of the rapidly expanding American data center market driven by AI growth.

The trading unit is expected to keep broadening its business beyond traditional commodity trading, expanding into new areas including data centers and hydrogen trading.

According to industry sources Tuesday, Samsung C&T's trading unit has identified data centers as a key future growth engine and is discussing strategies to pursue development projects in the United States.

The business model mirrors the unit's existing solar power operations. The plan calls for securing sites expected to host data centers, obtaining the necessary permits, and then selling operational rights to global big-tech companies or asset managers during the early infrastructure phase. The local networks the trading unit built through its US solar business are expected to prove useful in the data center development push.

Synergies with Samsung C&T's construction unit are also anticipated. The construction arm has been seeking data center project contracts to offset an earnings slump caused by a slowdown in the domestic construction market. Once the trading unit's data center development business reaches full stride, the construction unit would handle EPC — engineering, procurement and construction — while the trading unit focuses on site sourcing.

The rationale behind the US data center push is closely tied to AI growth. As the AI market expands rapidly, demand for data centers — the core infrastructure underpinning it — has surged. Large-scale data centers are being built at an especially concentrated rate in North America, home to many of the world's leading technology companies.

According to market research firm Mordor Intelligence, the North American data center market was valued at $153.87 billion (236 trillion won) last year and is projected to grow at a compound annual rate of 10.5 percent, reaching $253.35 billion (388 trillion won) by 2030.

The move is also part of a broader effort to build a new growth foundation. Samsung C&T's trading unit has pursued various new businesses to move beyond its trading-heavy structure, with its solar power operations — launched in 2010 — being the prime example. The challenge is that solar growth has slowed in recent years.

Last year, the trading unit posted $79 million (120 billion won) in solar development and divestiture gains — nearly four times the $21 million (32.1 billion won) recorded in 2021, but only 2.6 percent above the prior year's $77 million (117.6 billion won). While the long-term potential of solar remains significant given the green energy trend, Samsung C&T now needs to cultivate new revenue streams as a hedge against any further slowdown.

Samsung C&T's trading unit plans to further strengthen its new-business portfolio beyond data center development. Hydrogen is a leading example. In March, the unit signed a $3 billion (4.6 trillion won) green ammonia purchase agreement with Reliance Industries, India's largest conglomerate, marking its entry into hydrogen trading.

Efforts to grow the solar business will continue in parallel. Whereas the unit has focused primarily on development and divestiture, it plans to increase the solar infrastructure it operates directly going forward.

The unit also intends to pursue solar projects more aggressively outside the United States. In February, it sold its solar and energy storage system project in Queensland, Australia, to the Australian subsidiary of British firm Octopus Group — the first time Samsung C&T has generated solar revenue from a market outside the US.

A Samsung C&T spokesperson said the company has "nothing decided" regarding entry into the data center development business.