LS Materials has begun supplying desulfurization system components through its subsidiary LS Alsco to a global hydrogen fuel cell company, marking its entry into the power supply chain for AI-driven data centers.
The company announced on April 1 that LS Alsco has started delivering desulfurization modules to a fuel cell provider that has been supplying distributed power solutions to major North American data centers. With electricity demand surging due to the rapid expansion of AI infrastructure, fuel cells are emerging as a key alternative power source.
The deal is notable as it connects LS Materials directly to the energy supply chain supporting AI data centers, going beyond a typical component supply agreement. The desulfurization modules developed by LS Alsco remove sulfur compounds from fuel, a critical process that enhances both the lifespan and efficiency of fuel cells. The company emphasized that it has achieved localization of the technology while securing both cost competitiveness and supply stability.
Revenue from the desulfurization modules is expected to exceed 15 billion won (approximately $11 million) this year, accounting for around 10% of LS Materials’ projected consolidated revenue for 2025. Alongside ultracapacitors (UC), the segment is expected to become a key driver of the company’s growth.
LS Materials CEO Hong Young-ho said the company plans to expand its presence in the AI data center power supply market following the initial supply of desulfurization modules. He added that discussions are underway to supply ultracapacitor products within the year.
Hydrogen fuel cells are gaining attention as a next-generation distributed power solution for data centers, offering low carbon emissions and high energy efficiency. Industry estimates suggest that the global fuel cell market will grow from approximately $5.6 billion in 2025 to around $18 billion by 2030, reflecting strong demand driven by the expansion of digital infrastructure.
