Riding the U.S. Power Supercycle, Hyosung Heavy Industries Eyes Global Top 3 by 2031

[Korea Financial Times, Jung Jina] Hyosung Group Chairman Cho Hyun-joon plans to use a U.S. power supercycle, the first in 60 years, as a growth engine to lift Hyosung Heavy Industries into the ranks of the world's top three companies in its field.

To that end, Chairman Cho invested 13 times more than planned in new and expanded facilities in the first half of this year alone, and also created a Data Center Business Team. The "total solution" strategy he has emphasized since May last year appears to be entering a concrete execution phase, in the form of investment and organizational restructuring, about a year after it was first laid out.

Targets sharpened as power demand grows

Hyosung Heavy Industries recently won two ultra-high-voltage transformer supply contracts from two U.S. Big Tech companies through its U.S. sales subsidiary, HICO America Sales & Technology. The contracts are worth a combined KRW 386.59 billion, consisting of KRW 220.07 billion for 765kV transformers and KRW 166.52 billion for 345kV transformers.
Both contracts are for building out power grids in certain regions of the United States. Under the structure, Hyosung Heavy Industries supplies equipment for projects that HICO America Sales & Technology secured locally. The 765kV transformer contract runs through February 2029 and the 345kV transformer contract through August 2028, making both multi-year supply deals. The equipment in both cases will go to AI (artificial intelligence) data centers, which require enormous amounts of electricity.

Power demand from AI data centers is expected to keep rising. "No matter how many data centers you build, they are useless without a power supply," Chairman Cho said, stressing that "the AI data center business must be developed into the group's future growth pillar."

Hyosung Heavy Industries' growth plan has been refined accordingly. In May last year, the company set goals of becoming No. 1 in North American market share by 2027 and a leading total solutions provider by 2030. In November of the same year, while announcing an expanded investment in its Memphis plant, it said it would "firmly establish its position as the global No. 1 total solution provider."

This month, it set a new goal: "to rise into the global top three within five years." The aim is to leap into the global top tier on the strength of its "total solution" competitiveness, which spans not only transformers and circuit breakers but also power stabilization systems such as HVDC (high-voltage direct current), STATCOM (static synchronous compensators) and ESS (energy storage systems).

Expanding capex and organization

Moves toward becoming a "global top three" company are now well underway. Hyosung Heavy Industries' investment in new and expanded facilities in the first half of 2026 totaled KRW 69.2 billion, roughly 13 times the KRW 5.2 billion originally planned. Total capital expenditure for the first half also nearly doubled to KRW 94.6 billion from KRW 48.3 billion in the same period a year earlier.
At the ultra-high-voltage transformer plant in Memphis, Tennessee, two large-scale expansion projects with total investment of $247 million are underway. Once the expansions are complete, the Memphis plant will have the largest ultra-high-voltage transformer production capacity in the United States.


In July, the company set up an ultra-high-voltage circuit breaker joint venture with Quanta Services, a leading North American energy infrastructure solutions company, establishing a local production system for circuit breakers following transformers.

Alongside infrastructure, the company is also building out its organization. Earlier this month, it established the Data Center Business Team, which brings together design personnel for power equipment such as transformers and circuit breakers and for stabilization solutions such as STATCOM and ESS. The team is tasked with meeting the differing power needs of each data center operator through tailored combinations of power equipment and stabilization solutions.

Since 2019, Hyosung Heavy Industries has also been jointly developing and operating data centers through an equity joint venture with a Singapore-based data center specialist. The new team is therefore seen as an attempt to combine the business experience accumulated so far with its power equipment sales.

Growing footprint amid the U.S. power supercycle

These efforts, coinciding with the U.S. power boom, are creating growth opportunities for the group. Commenting on the latest orders, Chairman Cho said, "With the arrival of the AI era, demand for power infrastructure has exploded, bringing a supercycle for the first time in 60 years."

Global investment bank Goldman Sachs projects that U.S. data center power demand will grow at an average annual rate of 15% through 2030, and that about $50 billion will be invested in new power infrastructure to support it.

Hyosung Heavy Industries, which has spent more than 20 years laying groundwork in the market, is also reaping results during this expansion phase. After establishing a U.S. subsidiary in 2001, it exported its first 765kV ultra-high-voltage transformer to the United States in 2010, and in 2020 acquired the plant in Memphis, Tennessee, putting a local production system in place.

As a result of localizing by transplanting the technology and know-how built up at its Changwon plant to the Memphis plant, the company has held the No. 1 market share in the U.S. 765kV ultra-high-voltage transformer market since the early 2010s. Roughly half of the 765kV transformers currently installed on the U.S. transmission grid are Hyosung Heavy Industries products.

The company also offers an ultra-high-voltage circuit breaker lineup covering 72.5kV to 800kV, and orders for STATCOM, a power stabilization system, are on the rise. Its long-built trust in the local market and broad product portfolio are cited as the reasons behind the latest orders.

Including these contracts, Hyosung Heavy Industries' cumulative new orders stand at about KRW 9.69 trillion, already exceeding its full-year order intake for last year.

The company raised its annual order target to KRW 12 trillion from the previous KRW 8.4 trillion.

Results must follow: expansions, JV and new team still need to take root

The "top tier" vision Chairman Cho presented a little over a year ago has entered a concrete stage, now supported by the twin pillars of investment and organization. But fully proving it in numbers has only just begun.

Of the two Memphis plant expansions, one runs through the end of this year and the other through June 2028. Even the project nearing completion still has about $36 million remaining, while the project running through 2028 has $129 million, more than 70% of its total investment, yet to be executed.

The Quanta joint venture launched in July and the Data Center Business Team in early September, meaning both are less than three months old and it is too early for them to demonstrate results in earnings. The raised annual order target of KRW 12 trillion is also a projection based on results through August (KRW 9.3 trillion), so actual order flow over the remaining four months will need to be watched.

With the "global top three within five years" deadline itself still in its early days, whether the investment and organizational overhaul translate into an actual change in market position is expected to become clear through future results.



Jung Jina (urzinnie@fntimes.com)