Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Hyosung, HD Hyundai, LS benefit from AI supercycle
Hyosung Heavy Industries' 765-kilovolt ultrahigh-voltage transformer intalled at a power grid in the United States / Courtesy of Hyosung Heavy Industries
By Lee Min-hyung
Big 3 power equipment makers achieve triple-digit stock growth in a year
Three leading power equipment makers here — Hyosung Heavy Industries, HD Hyundai Electric and LS Electric — are expected to post unprecedentedly strong earnings this year, as booming artificial intelligence (AI) data centers fuel explosive demand for power infrastructure, according to data and industry officials Thursday.
Because hyperscale AI data centers, particularly in North America, require far greater power consumption than conventional cloud services, demand for electricity-related equipment is sharply increasing.
Korean power solutions players are considered one of the biggest beneficiaries of the ongoing AI frenzy, along with chipmakers, as evidenced by their solid earnings and stock growth for the past year.
According to data from market researcher FnGuide, the three firms are forecast to report around 17.9 trillion won ($12.3 billion) in combined sales this year. Their combined operating profit is also projected to reach around 3 trillion won during the same period.
Specifically, Hyosung Heavy Industries, the largest power equipment maker by sales here, is expected to report operating profit growth of 46.5 percent this year from a year earlier, with that of LS Electric and HD Hyundai Electric projected to soar 51.3 percent and 25.8 percent, respectively, during the same period.
The robust outlook is being driven by strong demand for ultrahigh-voltage transformers and next-generation high-voltage direct current systems — all considered essential for expanding and modernizing power grids.
An extra-high-voltage transformer of LS Power Solution, an affiliate of LS Electric / Courtesy of LS Electric
Hyosung Heavy Industries is pursuing a strategy to enhance its competitiveness in conventional power equipment, such as ultrahigh-voltage transformers and circuit breakers, and achieve profitable growth, with a particular focus on premium product sales.
LS Electric and HD Hyundai Electric are also following a similar path, with plans to expand their production capacity to meet surging demand from overseas clients.
Jumping on the AI boom, the three firms also reported sharp stock growth for the past year.
Shares of Hyosung Heavy Industries surged more than 700 percent in a year, with those from LS Electric and HD Hyundai Electric soaring over 600 percent and 300 percent, respectively, during the same period.
Industry officials said demand for power solutions will continue to remain solid, as more industries rapidly embrace AI.
“Demand for power equipment, particularly in the United States, remains robust, and supply shortages will continue, allowing the Korean firms to gain an edge in selling their products to major clients abroad,” an industry official said.
Hyosung Heavy Industries plans to strengthen its position as a reliable energy solutions provider by expanding its lineup of next-generation technologies, including solid-state transformers.
LS Electric is expanding its investment to widen switchboard production capacity. HD Hyundai Electric also pledged to solidify its position in North America with a diverse power solutions lineup encompassing power transmission and distribution.