Cho Hyun-joon positions Hyosung Heavy Industries for US power boom
Summary
Hyosung Heavy Industries is expanding its U.S. power infrastructure business as AI data center demand and grid replacement boost the market. Chairman Cho Hyun-joon’s localization strategy is driving investment in Memphis and a joint venture with Quanta. The company says it is building U.S. production capacity for both transformers and circuit breakers. It aims to strengthen its role as a major supplier to the U.S. power grid.
Key Facts
- Hyosung Heavy Industries says it accounts for nearly half of the U.S. market for 765kV ultra-high-voltage transformers.
- The company has invested a total of $300 million in acquiring and expanding its Memphis, Tennessee plant through three rounds of expansion.
- Hyosung plans to increase production capacity at the Memphis plant by more than 50 percent from current levels by 2028.
- A joint venture with Quanta is scheduled to begin local production in October, making Hyosung the first Korean power equipment maker with U.S. production capabilities for both transformers and circuit breakers.
Hyosung Group Chairman Cho Hyun-joon speaks during an opening ceremony of Hyosung-STT GDC's artificial intelligence data center in Seoul, June 16. Courtesy of Hyosung Group
Hyosung Heavy Industries is strengthening its foothold in the U.S. power infrastructure market as soaring electricity demand from artificial intelligence (AI) data centers and efforts to replace aging power grids drive a rapid expansion of the country's power infrastructure.
The company said Tuesday that its localization strategy, spearheaded by Hyosung Group Chairman Cho Hyun-joon, is beginning to bear fruit as demand rises for ultra-high-voltage power equipment in the United States.
Cho anticipated the growing importance of power infrastructure amid the rapid development of AI and has called on Hyosung Heavy Industries to become a "game changer" in the power infrastructure market driving the transformation of global industries.
The United States is expanding its 765-kilovolt (kV) ultra-high-voltage transmission network to accommodate rising electricity demand, including from AI data centers. Such networks enable the long-distance transmission of large amounts of electricity with lower losses.
Hyosung Heavy Industries currently accounts for nearly half of the U.S. market for 765kV ultra-high-voltage transformers. It also offers ultra-high-voltage circuit breakers ranging from 72.5kV to 800kV.
Building on its ultra-high-voltage transformer plant in Memphis, Tennessee, the company has established a local production base for ultra-high-voltage circuit breakers with capacity of up to 800kV. The move allows the company to manufacture and supply key equipment for 765kV transmission networks locally, strengthening its position as a major supplier to the U.S. power grid.
A view of Hyosung Heavy Industries’ ultra-high-voltage transformer plant in Memphis, Tenn. / Courtesy of Hyosung Heavy Industries
Cho identified a U.S. manufacturing base as a key source of future competitiveness in the power equipment market and decided in 2020 to acquire an ultra-high-voltage transformer plant in Memphis.
Despite concerns surrounding the acquisition at the time, he determined that securing a local production base was essential given the growth potential of the U.S. power market and the plant's ample land, which offered room for future expansion.
Hyosung Heavy Industries has invested a total of $300 million in acquiring the plant and carrying out three rounds of expansion. It plans to increase production capacity by more than 50 percent from current levels by 2028.
Once the expansion is completed, the Memphis plant is expected to have the largest ultra-high-voltage transformer production capacity in the United States.
The plant is currently the only facility in the U.S. capable of producing 765kV-class ultra-high-voltage transformers. Such transformers require highly sophisticated design and manufacturing capabilities, and Hyosung Heavy Industries has maintained its top position in the U.S. 765kV ultra-high-voltage transformer market since the early 2010s.
Hyosung Heavy Industries is now expanding its U.S. production capabilities beyond transformers through a joint venture with Quanta, a North American energy infrastructure solutions provider, to manufacture ultra-high-voltage circuit breakers.
The joint venture is scheduled to begin local production in October. Once operational, it will make Hyosung Heavy Industries the first Korean power equipment maker with U.S. production capabilities for both transformers and circuit breakers, according to the company.
The partnership was driven by Cho, who determined that cooperation with Quanta would be crucial to responding to the expansion of the U.S. power market. He met with Quanta's CEO and other key executives in the United States in March to finalize the joint venture agreement.
Quanta has an extensive business base and customer network spanning power and energy infrastructure projects across the United States, including utilities, power generation, energy storage systems and data centers.
Hyosung Heavy Industries plans to combine its power equipment technology with Quanta's infrastructure solutions capabilities to expand its U.S. business beyond the supply of individual pieces of equipment and into broader power infrastructure solutions.
"The future of the power industry lies not only in equipment but also in the ability to comprehensively manage power flow, storage and stability," Cho said. "Building on our position in the North American market, we will firmly establish ourselves as the world's No. 1 total solution provider."
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