Hyosung chairman's bet on power biz hits stride amid AI boom

Hyosung Group Chairman Cho Hyun-joon, left, poses with U.S. Secretary of Energy Chris Wright during the Cherry Blossom Policy Summit in Washington, March 31. Courtesy of Hyosung Group

Hyosung Group Chairman Cho Hyun-joon’s vision for proactive investment in power grid equipment is bearing fruit, as the global artificial intelligence (AI) boom fuels soaring demand for high-voltage power supply.

His 2020 decision to acquire an extra-high-voltage transformer plant in Memphis, Tennessee, has helped propel the group’s power equipment unit to record earnings in recent months, with the company now targeting 5 trillion won ($3.62 billion) in annual revenue this year.

According to Hyosung Heavy Industries, it logged 1.08 trillion won in sales and 102.4 billion won in operating profit in the first quarter of this year, achieving 9.3 percent and 82.2 percent year-on-year increases, respectively.

The numbers are the highest first-quarter earnings for the company and widely accepted as an earnings surprise, as it surpassed brokerages' consensus of an operating profit of around 90.1 billion won.

The company set new highs in its annual earnings in 2024, logging 4.9 trillion won in sales and 362.5 billion won in operating profit, up 13.8 percent and 40.6 percent respectively from a year earlier.

These improvements were driven by a surge in orders for extra-high-voltage power equipment, particularly in the United States, as well as expanded sales in global markets including Europe, the Middle East and Oceania. The expansion in power equipment sales in overseas market has also driven the company’s business to hit its stride.

Hyosung Heavy Industries' plant in Memphis, Tenn. / Courtesy of Hyosung Heavy Industries

Playing a key role in Hyosung Heavy Industries’ rise is the 2020 acquisition of the Memphis plant from Japan’s Mitsubishi at $46.5 million.

Despite various risks at the time, Hyosung recognized the need for a local manufacturing base in the U.S. and moved forward with the acquisition after highly acknowledging the plant’s scalability and proximity to nearby railways and waterways.

Since then, the company has invested over $150 million to scale up operations at its Memphis plant. It is the only plant in the U.S. capable of producing extra-high-voltage transformers up to 765 kilovolts. The company is currently expanding its testing and production facilities, with completion targeted for 2026. Once completed, the plant’s production capacity is expected to more than double.

Backed by stable and high-margin orders in North America, Hyosung Heavy Industries’ Memphis plant is expected to see a 170 percent year-on-year rise in sales in the first half of this year. Gross profit is expected to jump over 300 percent during the same period.

Employees inspect an extra-high-volatage transformer at Hyosung Heavy Industries' plant in Changwon, South Gyeongsang Province, in this undated photo. Courtesy of Hyosung Heavy Industries

The 2020 investment is widely seen as a stroke of genius for Hyosung, as the global power transformer market enters a super cycle. AI data centers' skyrocketing power demand overlaps with the 30-year replacement cycle for aging power grids.

By establishing local production of power equipment in the U.S. early on, Hyosung Heavy has also positioned itself to be relatively insulated from the risks from the Donald Trump administration’s unpredictable tariff policies.

Along with the U.S. market, Hyosung Heavy is expanding its transformer and switchgear exports toward the European market. After making its entry to the region in 2010, the company has secured power equipment orders from Sweden, Iceland, Finland and France.

Hyosung Group Chairman Cho Hyun-joon, right, poses with U.S. Secretary of Housing and Urban Development Scott Turner during the Cherry Blossom Policy Summit in Washington, March 31. Courtesy of Hyosung Group

As investments in Hyosung Heavy pay off, Cho decided to directly engage in the company’s management, joining its board as a director in March.

“Cho plans to expand Hyosung’s presence in emerging power markets by leveraging his strong global network and lead proactive investments,” a Hyosung official said. “He also seeks to take a more direct role in managing Hyosung Heavy Industries, to position the company as a global leader in the power sector, which is becoming a critical pillar in the AI era.”

Under Cho’s management, Hyosung Heavy is considering additional expansions of the Memphis plant to establish the world’s biggest capacity. Based on this plan, Cho aims to grow the company as the largest power equipment company in North America by 2027 and transform it into a total solutions provider for the AI industry by 2030.

“Hyosung Heavy Industries is a key player in the AI industry,” Cho said. “Power infrastructure is essential for the AI era, and this is why the U.S. view the AI and power sectors as one. Hyosung Heavy Industries must embrace this view and be prepared for what it entails.”

Hyosung Group Chairman Cho Hyun-joon, right, speaks with U.S. Senator Bill Hagerty of Tennessee during the Cherry Blossom Policy Summit in Washington, March 31. Courtesy of Hyosung Group

Cho's vision

Cho took the helm of Hyosung Group in 2017 as the third chairman of the textiles, petrochemicals and power equipment conglomerate.

He graduated from Yale University in the U.S. and earned a master’s degree from Keio University in Japan. Before joining Hyosung, he worked at Mitsubishi Corp. and the Japan office of Morgan Stanley.

Based on this background, Cho has maintained close and consistent ties with key political and business figures in Washington and Tokyo, assisting the group’s overseas businesses as well as serving a private role in the Korea-U.S. and Korea-U.S.-Japan relations.

In recent months, Cho has been making efforts to help Korea to navigate the impact of U.S. tariff policies.

On March 31, Cho attended the Cherry Blossom Policy Summit in Washington, D.C., hosted by Sen. Bill Hagerty of Tennessee and others. Invited as a leading Korean business figure, Cho engaged with key U.S. officials, including Trump administration’s Energy Secretary Chris Wright, Housing and Urban Development Secretary Scott Turner and Sen. Marsha Blackburn of Tennessee.

The discussions touched on the U.S. administration’s evolving perspective on the Indo-Pacific region, as well as strategies Hyosung and the broader Korean economy may need to pursue in response to emerging challenges.

Hyosung Group Chairman Cho Hyun-joon, right, poses with U.S. Senator Marsha Blackburn of Tennessee during the Cherry Blossom Policy Summit in Washington, March 31. Courtesy of Hyosung Group

In April, Cho also met with former U.S. National Security Adviser Jake Sullivan in Washington, D.C., sharing their opinions on the relations between the U.S. security and electricity industries, according to the group.

Cho also visited Spain in March as the chairman of the Korea-Spain Economic Partnership Committee, stressing that Hyosung Heavy can offer solutions that can ensure grid reliability amid Europe’s growing reliance on renewable energy.

During those visits, Cho met local Hyosung employees in the U.S. and Spain, emphasizing the strategic importance of AI in their businesses.

“In the U.S., building stable power infrastructure is seen as the most essential element for the AI industry,” Cho said. “Because data protection is directly tied to the national security, the power sector is increasingly viewed as part of the defense industry. In short, AI means power.”