'Power struggle' intensifies among Korean transformer makers in US

LS Electric Chairman Koo Ja-kyun speaks during a ceremony marking the completion of the company's Bastrop Campus in Texas, Monday (local time). Courtesy of LS Electric

Korean manufacturers of power transformers and switchgear systems are ramping up efforts to increase their production in the United States to counter lingering uncertainty over the Donald Trump administration's tariff policies.

LS Electric said Wednesday it has completed construction of its manufacturing facility in Texas, which is expected to begin full-scale production this year of medium- and low-voltage power equipment and switchgear systems for data centers operated by major U.S. tech firms.

The company expects the new plant to mitigate risks related to U.S. tariffs and trade barriers by producing strategic power products locally.

"We will invest an additional $240 million by 2030 to expand production facilities, hire local talent and grow the campus into a North American power solutions hub that thrives alongside the local community," LS Electric Chairman Koo Ja-kyun said Monday (local time) during a ceremony marking the completion of the company's Bastrop Campus.

With its switchgear manufacturing subsidiary in Utah, LS Electric aims to close the gap with Schneider, Siemens, Eaton and ABB in U.S. market share and generate 70 percent of its revenue from overseas sales.

"The U.S. market and the Bastrop Campus will serve as a solid stepping stone for LS Electric to become a global enterprise," Koo said.

HD Hyundai Electric and Hyosung Heavy Industries, the two other major Korean transformer makers, already produce their products at factories in Alabama and Tennessee, respectively. Amid Trump's push for greater U.S. investment, both companies have expanded production capacities at their American plants.

Earlier this month, they were exempted from the U.S. Commerce Department's 16.87 percent antidumping tariffs on large power transformers imported from Korea between August 2022 and July 2023.

Given that LS Electric is still subject to the duty, Washington's decision was interpreted as favorable treatment toward firms increasing U.S. investments.

However, LS Electric denied any connection between the antidumping tariffs and the recent construction of its Texas plant.

"The Bastrop Campus will focus on producing switchgear systems instead of high-voltage transformers," a company official said. "We had already planned the investment before the antidumping tariff was imposed."