South Korea’s leading power equipment manufacturers are expected to post a more than 40 percent increase in combined operating profit in the first half of this year, fueled by surging electricity demand driven by artificial intelligence (AI) and large-scale power grid modernization projects in North America.
According to industry sources on Wednesday, the combined first-half operating profit of manufacturers of ultra-high-voltage transformers, circuit breakers, and other power distribution equipment, including HD Hyundai Electric Co, LS Electric Co., Hyosung Heavy Industries Corp, and Iljin Electric Co., is projected to reach 1.36 trillion won ($875.3 million).
Including LS Cable & System Ltd., Taihan Cable & Solution Co., and Gaon Cable Co., which produce ultra-high-voltage power cables, the combined operating profit of the seven companies is expected to total 1.7 trillion won, up about 41 percent from a year ago.
Korean companies are strengthening their position across the entire power transmission value chain.
Electricity is delivered through four stages – generation, transmission, substations, and distribution – before reaching homes, factories, and AI data centers. Korean manufacturers have become key suppliers at each stage by combining high-value products with industry-leading production capacity and delivery schedules.
While many overseas competitors currently quote delivery times of roughly two years, Korean companies are often able to deliver in less than half that time, making them the preferred choice for customers seeking to commercialize projects quickly.
The strongest momentum has been in the substation equipment market, particularly for ultra-high-voltage transformers, which increase or reduce voltage during electricity transmission.
Years of underinvestment in power grids across the United States and other major markets, combined with aging infrastructure, renewable energy expansion, and AI data center construction, have pushed demand well beyond available supply.
This has created significant opportunities for Korean manufacturers of 765-kilovolt ultra-high-voltage transformers.
Orders continue to surge.
In the first quarter, HD Hyundai Electric, LS Electric, Hyosung Heavy Industries, and Iljin Electric secured a record 8.3 trillion won in new orders, lifting their combined order backlog to 34.02 trillion won.
Hyosung Heavy Industries set an industry record in February by signing a 787 billion won power equipment supply agreement with a major U.S. transmission grid operator – the largest single contract ever secured by the company.
LS Electric also received 1.2 trillion won in new orders from North American technology companies through June, already exceeding its total for all of last year, which stood at 800 billion won.
The power distribution equipment market is expected to accelerate rapidly this year as AI data center construction gains momentum.
Distribution equipment delivers electricity safely from substations to end users while protecting facilities from electrical faults such as overloads and short circuits.
“In the U.S. market, AI-related demand has begun expanding in earnest this year, driving strong growth in demand for power distribution equipment,” said Lee Chang-ho, executive vice president of HD Hyundai Electric. “Orders are increasing this year, while the associated revenue should begin contributing meaningfully next year.”
Power cable manufacturers are also enjoying strong growth as demand rises for ultra-high-voltage transmission cables needed to carry electricity from large nuclear power plants and other generating facilities, while data centers create additional demand.
In power generation, Doosan Enerbility Co. is expanding its presence in the U.S. market with large nuclear reactors, small modular reactors, and gas turbines.
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