Top Korea Power Firm Revs Up US Growth Betting on AI Supercycle
(Bloomberg) — HD Hyundai Electric Co., South Korea’s largest power equipment maker, is accelerating its U.S. expansion, betting that demand for transformers and switchgear will rise as the artificial intelligence “super cycle” triggers a new wave of power consumption.
The company cites the convergence of factors driving large-scale grid investments—artificial intelligence and data centers, a revival in U.S. manufacturing, aging grid infrastructure, and the shift to renewable energy. These trends are pushing HD Hyundai to deepen its footprint in America, which it sees as a long-term industry advance.
“We believe this superbike will last much longer than expected,” HD Hyundai Electric America president Kang Sungsoo said in an interview with Bloomberg News.
HD Hyundai has an estimated 15% to 20% share of the U.S. high-voltage transformer market and operates the nation’s largest ultra-high-voltage transformer facility in Alabama. The company is in talks with five or six of the world’s leading “Big Tech” companies, some supply agreements have been signed and the first shipments will begin towards the end of this year.
“Some have tripled their volume requirements compared to 2024 to support new data centers and on-site energy generation,” Kang said, without naming the companies.
To accommodate growing orders, the company broke ground on a second 130,000-square-foot (32-acre) facility in Alabama on Friday. The $200 million project, expected to be completed in April 2027, is expected to increase annual production capacity by 50% and increase annual revenue by approximately 200 billion won ($136 million); That’s roughly 5% of last year’s sales.
“The additional capacity of the new facility has already been exhausted for years, so we are not worried about what some call the AI bubble,” Kang said ahead of the groundbreaking ceremony.
Kang dismissed concerns that AI-related energy demand could be nearing its peak, saying current growth is still largely driven by reshoring, grid upgrades and renewable expansion. The impact of AI will intensify as large-scale data centers come online later this year.
Hyundai Electric shares have nearly quadrupled in the past year, making it one of the biggest winners of the Kospi’s big rally. The increase underscores a widening supply gap as AI-connected data centers proliferate and the U.S. faces a shortage of domestic transformer capacity.
The new facility will be one of the few domestic manufacturers of 765 kilovolt transformers, which are critical for long-distance extra-high voltage transmission. Hyosung Heavy Industries Corp., which operates a plant in Memphis. is currently the only other US-based supplier.
Alabama operations also provide protection against trade fluctuations because the company sources key materials, including copper and steel plates, from the United States.
HD Hyundai developed the 765 kilovolt transformer for nuclear reactors in South Korea in the late 1990s. The equipment has since become a preferred option for U.S. grid operators transferring power from remote facilities to energy-intensive data centers, said Kang Jinho, president of HD Hyundai Power Transformers USA.
In September, the company signed a 278 billion won deal with Texas’ largest utility to supply 765 kilovolt transformers; this was the largest single order in history.
HD Hyundai supplies at least 30 of the largest U.S. utilities, and Kang Sungsoo said the company will review whether further capacity expansion is needed later this year or early next year.
“We are one of the few manufacturers that can meet the safety, quality and technical standards that customers require,” he said. “The market is expanding and we aim to capture the most attractive opportunities.”
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