Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Doosan on track for growth as portfolio aligns with AI industry
Doosan Group Chairman Park Jeong-won, left, poses with Nvidia CEO Jensen Huang during a Korea Baseball Organization game between the Doosan Bears and Kiwoom Heroes in Seoul, June 7. Courtesy of Doosan Group
By Nam Hyun-woo
CCL, gas turbines enjoy rosy outlook due to data center expansion
Doosan Group is expected to post strong growth as its key businesses are increasingly aligned with the core supply chain of the artificial intelligence (AI) industry.
According to market tracker FnGuide, the consensus estimate among brokerages for Doosan Corp.'s second-quarter earnings is 5.5 trillion won ($3.62 billion) in sales and 465 billion won in operating profit, up 3 percent and 30 percent year-on-year, respectively.
Doosan Corp. is the holding company of the conglomerate but is gaining market attention with its own electromaterials business, which supplies copper clad laminates (CCL) to chipmakers.
CCL is a key material used in advanced chip substrates and printed circuit boards found in virtually all electronic devices. As AI servers and high-performance computing systems require fast processing of massive amounts of data, demand is growing for high-frequency, low-loss CCLs.
In the first quarter of this year, the business group’s sales reached 617.3 billion won, growing 53.2 percent year-on-year to set a new record. Operating profit soared 59.9 percent year-on-year to stand at 185.6 billion won, while operating margin surpassed 30 percent.
To meet surging demand, the company decided to invest 180 billion won to build new a CCL plant at the Araya Industrial Park in Thailand, as well as expanding capacity of its main CCL plants in Jeungpyeong County, North Chungcheong Province.
"The company's Electro-Materials Business Group accounts for nearly half of its net asset value," Daishin Securities analyst Lee Kyung-yeon said. "We expect the recent investments to capture growing global demand for high-end CCLs used in next-generation AI accelerators, marking the beginning of a long-term growth cycle."
Doosan Enerbility's 380-megawatt natural gas turbine / Courtesy of Doosan Enerbility
Power infrastructure company Doosan Enerbility is also expected to post solid growth, as rising concerns over power supply for data centers drive strong demand for its gas turbine business.
In the first quarter alone, Doosan Enerbility secured contracts for 10 gas turbines for data centers, including locations in North America. Elon Musk's xAI added five 380-megawatt natural gas turbines from Doosan Enerbility to power its massive graphics processing unit clusters.
Additional steam turbine orders from North America have also followed to enable combined-cycle power generation.
Doosan Enerbility expects to secure cumulative orders for more than 100 gas turbines by 2034, generating annual revenue of 1 trillion won from services alone.
"Of the roughly 1,000 gigawatts of gas power plant projects currently under development worldwide, more than 70 percent have yet to announce or select their gas turbine suppliers," Kiwoom Securities analyst Cho Jae-won said.
"This highlights the size of the potential market that Doosan Enerbility can penetrate.… We expect order opportunities for gas turbines for on-site power generation at data centers to continue expanding, and the demand for steam turbines is also increasing."