Analysis byKathryn Clay: Key Takeaways
Subsea high-voltage direct current (HVDC) cables are becoming strategic infrastructure. What began as niche island interconnections are now systems that enable cross-border electricity trade, offshore wind integration, and long-distance grid resilience.
Subsea power cable technology has crossed an inflection point.Advances in insulation materials and power electronics over the past decade have enabled subsea systems capable of transmitting gigawatts across hundreds of miles.
Demand is outpacing supply. Global manufacturing capacity for advanced subsea cables is oversubscribed. Bottlenecks are driving delays and escalating costs.
U.S. manufacturing capacity remains limited and uncertain. The United States relies largely on imports for advanced subsea HVDC systems. While Nexans has established a U.S. facility and LS GreenLink is investing heavily in Virginia, other efforts — notably Prysmian’s Brayton Point project — have stalled amid permitting delays and offshore wind uncertainty.
China is building an integrated industrial ecosystem. The country is rapidly scaling high-voltage subsea cable manufacturing capacity, supported by domestic offshore wind deployment, state-backed financing and vertical integration across materials, components, and installation capability.
Intro: U.S. could find itself dependent on foreign suppliers
Over the past 70 years, subsea power cables have grown from small regional connections into major infrastructure projects that can carry gigawatts of electricity across hundreds of miles of ocean. The technology improved incrementally for decades, until breakthroughs in the last decade have opened up possibilities for far longer, more powerful interconnections.
While the market for high-voltage subsea cables today is dominated by wind farms, this is changing. The state-of-the-art HVDC subsea cables can now connect systems over distances of several hundred miles. In Europe and in China, they are allowing electricity to be traded between countries — and are strengthening grid reliability by linking distant regions.
As offshore wind expands and countries look to move power over longer distances, the ability to manufacture high-voltage subsea cables at scale is becoming a strategic industrial capability. U.S. manufacturing capabilities in this area are thin. The factories that make the most advanced cables are in Europe and, increasingly, in China. As manufacturing leadership consolidates overseas, the United States could find itself dependent on foreign suppliers for critical components needed to update and improve our electrical grid.
Analysis: Subsea cables are key assets enabling electricity trading across growing distances
The modern era of submarine power cables began in 1954, with a 60-mile line connecting the Swedish island of Gotland to the Swedish mainland. This cable provided only about 20 megawatts of power, but it was enough to allow the island’s population to switch from diesel-burning generators to Sweden’s plentiful, hydropower-generated electricity.
Technological progress on subsea power cables was incremental for several decades. Over the last decade, however, breakthroughs in insulating materials and power electronics have opened up new possibilities for linking electricity markets separated by hundreds of miles of ocean.
Natasa Piles, then serving as the Cypriot Energy Minister, is shown here speaking at a 2022 announcement of the European Union’s commitment of $736 million for the construction of a a 2,000 megawatt undersea electricity cable linking the power grids of Israel, Cyprus and Greece. (Petros Karadjias / AP)
At the 2021 opening of the first subsea power cable manufacturing facility in the United States, Nexans then-CEO Christopher Guérin spoke about the scale of the market opportunity. He noted: “The world will require more than 4,000 miles of similar subsea cables to amplify global interconnection.”
In the last five years, major project announcements have followed quickly, involving the nations of Europe, Asia and the Middle East. The United States is conspicuously absent, both in installation of projects and in developing a manufacturing base.
Sam Salustro, senior vice president of market and policy strategy for the Oceanic Network, a trade group representing the renewable maritime energy industry, describes the current situation as “an enormous global supply chain crunch.”
“We have always viewed the need for greater coordinated or planned transmission as a necessity to really unleashing this industry,” Salustro said. Without regulators of the regional grids within the United States working together, a predictable market for offshore HVDC is unlikely to emerge. Without this, U.S. investment in the sector will falter, he added.
Global manufacturing capacity for subsea power cables is oversubscribed, and more growth is expected.
As offshore wind and long-distance power transmission grow, demand for these cables is rising sharply. The global HVDC market was about $8.2 billion in 2018. By 2024, the market size more than doubled to $19.57 billion and then to $20.79 billion in 2025. It is projected to rise to $33.63 billion by 2033, growing at a compound annual growth rate of 6.2 percent.
Despite this strong growth, there are a limited number of vessels and skilled operators capable of laying and maintaining submarine cables. Offshore cable installation is a highly technical process requiring specialized vessels and expertise. Only around 60 vessels worldwide can handle these tasks, and many have already been in service for decades — which adds to the constraints.
Specialized vessels designed for laying and maintaining deep sea cables — like this one shown docked in Singapore — are in short supply globally. Growing demand for subsea systems linking national grids across hundreds of miles of ocean will require new investments in similar vessels and a skilled workforce to crew them. (Ore Huiying / for The Washington Post)
Permit delays and uncertain prospects for offshore wind present challenges for the U.S.
The United States has relied to date on imports for subsea HVDC cable systems. In the last few years, three notable efforts to establish U.S. manufacturing have been met with mixed results.
When Nexans officially opened the first U.S. subsea HVDC cable plant in Charleston, South Carolina, in 2021, it made an investment of more than $200 million. The facility was adapted from an existing high-voltage transmission plant to produce subsea HVDC cables to supply East Coast offshore wind projects as well as international customers.
The most prominent project underway is a large subsea cable manufacturing campus in Chesapeake, Virginia, being developed by LS GreenLink USA, a subsidiary of South Korea-based LS Cable & System. In 2025, the company held a groundbreaking for what it describes as the largest subsea cable factory in the United States, backed by roughly $680 million to $700 million in capital and expected to be fully operational by 2028.
In a statement, LS Cable President and CEO Bon-Kyu Koo noted that the facility would bring the United States to the cutting edge of power cable technology. “This state-of-the-art facility represents our commitment to pushing the boundaries of technology and engineering,” he said.
Prysmian Group, an Italy-based global producer of energy and telecommunications cables, had planned to build a new subsea power cable manufacturing plant at the former Brayton Point power station site in Somerset, Massachusetts. The project was announced as a roughly $200 million investment intended to localize production of high-voltage submarine cables in the United States to support offshore wind projects along the East Coast. Prysmian abandoned the project in 2025 due to permit delays and diminished prospects for U.S. offshore wind under the Trump administration.
Salustro said manufacturers in foreign countries are expected to serve their own domestic markets first. This means that the United States could be left with long wait times or even a lack of access to subsea power cables when it does decide to invest in this infrastructure. “We view it as a necessity to get as many manufacturers in the United States as we can, to make sure that we’re not victim to that when this industry does ramp up.”
China is positioning to dominate manufacturing of key subsea system components.
While European firms pioneered many of the technical breakthroughs in undersea cables, Chinese companies are rapidly closing the gap, and in some instances moving into the lead.
Since entering the market in 2018, Chinese manufacturers have become world-class producers of the most technically advanced cables, those with voltages of 600 kilovolts or more. Over the past decade, Beijing has aligned state financing and grid-expansion goals to accelerate domestic capability in ultra-high-voltage transmission. The result is a vertically integrated ecosystem: Chinese firms produce copper and aluminum conductors, advanced materials for insulating high-voltage cables, converter components, and large cable-laying ocean vessels.
China’s extensive network of offshore wind facilities provides a reliable home market for scaling production. Meanwhile, Beijing’s aggressive export financing supports overseas expansion, including prominent projects in the Middle East. Therefore, China is well positioned to become dominant in key components of subsea systems that are essential to key pathways for long-distance electrification.
China has been laying the groundwork for submarine dominance since 2006 with its 11th Five-Year Plan — the first such plan to include a focus on marine industries. Subsequent national strategy created local marine development zones with funding at the national and local levels, and brought in research collaboration with national universities.
That framework created national corporate “champions” that, with 2015’s Belt and Road Initiative, were supported to international relevance — in step with government objectives. One such champion, Orient Cable, which represents 39 percent of the Chinese domestic cable market, was able to manufacture its first 500 kilovolt cable in 2018, the result of government support dating back to 2005. Since then, China has moved into the manufacturing of ultra-high-voltage (UHV) transmission cables, operating at 800 to 1,100 kilovolts for long-distance onshore power lines.
The engineering capabilities required for these systems — advanced insulation materials, high-precision manufacturing and the ability to manage extreme electrical stresses — are directly relevant to the next generation of subsea transmission. As a result, China’s progress in UHV technology is likely to spill over into the offshore cable sector, strengthening its competitive position as the global market for long-distance subsea power transmission expands.
“Demand for submarine HVDC cables, in manufacturing, deployment and installation, face very tight schedules, especially after the pandemic,” said Cartus Bo-Xiang You, a nonresident fellow at Taiwanese think tank DSET. “Chinese corporations have more capacity for manufacturing, and have expanded their overseas presence to fill those gaps.”
China accounts for over half of worldwide offshore wind capacity, with 42 gigawatts. Chinese manufacturers of subsea power cables scaled up rapidly to meet the demand created by offshore wind. As these domestic projects are fulfilled, China’s excess manufacturing capacity is becoming available to serve export markets.
Commodity research firm CRU projected that Chinese manufacturers will account for 80.6 percent of global HVDC excess manufacturing capacity by 2030. China will be well positioned to supply countries that are either unable to scale their own domestic production or cannot compete with local Chinese outposts.
This is already playing out in the Middle East. China’s leading cable manufacturers are increasingly establishing a presence in the region, forming joint ventures, technology partnerships and manufacturing investments aimed at supplying HVDC subsea cables for emerging interconnection projects in the gulf and the eastern Mediterranean.
Look Ahead: China’s strategy could be a replay of its path to solar cell manufacturing dominance
While Europe is the leader in implementing large- scale subsea power connections, the center of gravity for high-end cable manufacturing is shifting east.
China’s position today in subsea HVDC cable manufacturing resembles where it stood in solar panel production 10 to 15 years ago. At that time, solar technology had largely been developed in Europe, Japan and the United States. After 2008, China dramatically accelerated its efforts to build its manufacturing base for solar energy technologies. It invested heavily in factories, supported domestic firms with financing and policy backing, and expanded production capacity faster than competitors. Within a decade, China controlled the majority of global solar manufacturing.
A similar pattern may now be unfolding in subsea HVDC cables. The core engineering knowledge is international, and leading European and Japanese firms have long dominated the sector. But China is investing in large, modern cable factories, expanding high-voltage production capacity, and integrating cable manufacturing into its broader industrial and energy strategy.
The solar example shows how quickly leadership can shift. The question for the United States and its allies is whether subsea HVDC cables are heading down the same path. Early dominance in manufacturing scale can translate into lower costs, supply chain leverage and long-term market control.
Recommendations
1. Treat subsea HVDC cables as strategic infrastructure, not niche equipment. HVDC cables should be considered alongside semiconductors, transformers and grid control systems as critical industrial capabilities. National energy security planning should explicitly include advanced cable manufacturing capacity.
2. Prioritize policy measures that give clear market signals for this industry. Policy volatility in offshore wind and interregional transmission planning discourages capital investment in domestic production facilities. Clear, durable permitting and procurement frameworks are essential.
3. Support domestic installation capability. Cable production alone is insufficient. A limited number of installation vessels, insufficient port infrastructure and a lack of skilled operators are critical bottlenecks. Incentives for vessel construction and workforce development should accompany manufacturing expansion.
4. Encourage allied supply chain coordination. Europe remains technologically strong in high-voltage cable engineering. Coordinated investment among the U.S., Europe, Japan and South Korea could diversify supply chains while maintaining technical leadership.
5. Monitor China’s vertical integration strategy closely. China’s alignment of grid expansion, industrial financing and export promotion is accelerating capability development. Policymakers should track:
- Production milestones (e.g., announcements of higher voltages, 600 kilovolts or higher)
- Contracts to build new installation vessels
- Export financing for subsea power cables
- Acquisition of advanced materials supply chains
6. Avoid repeating the solar trajectory by default. In solar photovoltaic technology, rapid scale and cost reductions ultimately benefited deployment but left many Western manufacturers uncompetitive.
7. Focus on next-generation innovation. Investment in components or related equipment could pay off as the subsea power cable market grows. Examples include improved insulation materials and equipment, and software for advanced cable monitoring and diagnostics.
