Hyosung Heavy Industries' 765-kilovolt ultrahigh-voltage transformer intalled at a power grid in the United States / Courtesy of Hyosung Heavy Industries

Three leading power equipment makers here — Hyosung Heavy Industries, HD Hyundai Electric and LS Electric — are expected to post unprecedentedly strong earnings this year, as booming artificial intelligence (AI) data centers fuel explosive demand for power infrastructure, according to data and industry officials Thursday.

Because hyperscale AI data centers, particularly in North America, require far greater power consumption than conventional cloud services, demand for electricity-related equipment is sharply increasing.

Korean power solutions players are considered one of the biggest beneficiaries of the ongoing AI frenzy, along with chipmakers, as evidenced by their solid earnings and stock growth for the past year.

According to data from market researcher FnGuide, the three firms are forecast to report around 17.9 trillion won ($12.3 billion) in combined sales this year. Their combined operating profit is also projected to reach around 3 trillion won during the same period.

Specifically, Hyosung Heavy Industries, the largest power equipment maker by sales here, is expected to report operating profit growth of 46.5 percent this year from a year earlier, with that of LS Electric and HD Hyundai Electric projected to soar 51.3 percent and 25.8 percent, respectively, during the same period.

The robust outlook is being driven by strong demand for ultrahigh-voltage transformers and next-generation high-voltage direct current systems — all considered essential for expanding and modernizing power grids.

An extra-high-voltage transformer of LS Power Solution, an affiliate of LS Electric / Courtesy of LS Electric

Hyosung Heavy Industries is pursuing a strategy to enhance its competitiveness in conventional power equipment, such as ultrahigh-voltage transformers and circuit breakers, and achieve profitable growth, with a particular focus on premium product sales.

LS Electric and HD Hyundai Electric are also following a similar path, with plans to expand their production capacity to meet surging demand from overseas clients.

Source: Korea Times News