HD Hyundai Heavy Industries is accelerating its push into the AI-era power infrastructure market by supplying large-scale power generation equipment for US Big Tech companies’ data centers.
HD Hyundai Heavy Industries announced on August 10 that it signed a contract on August 7 (local time) in Panama with Corban Energy Group, a US energy infrastructure developer, to supply a total of 1,000 megawatts (MW) of power generation equipment worth 956 billion won (approximately $675.4 million). This is HD Hyundai Heavy Industries’ largest-ever engine supply contract, following a 627.1 billion won (approximately $443.0 million) deal signed in April with US energy infrastructure firm AEG for data center power equipment. So far this year, the company’s US data center-related power equipment orders have reached a total of 1.58 trillion won (approximately $1.1 billion).
Corban Energy Group is a specialized firm that supplies gas, liquefied natural gas (LNG), and power products for various infrastructure projects, including data center construction and US Department of Defense (DoD) projects. The equipment supplied by HD Hyundai Heavy Industries will be directly used as a power source for local Big Tech companies’ data centers.
The products being delivered are power generation units based on 9.6MW-class HiMSEN gas engines. As large-capacity medium-speed engines, they feature high output and high efficiency, enabling stable 24-hour operation. A key technical strength is their ability to respond rapidly to the frequently fluctuating power demands of data centers. Industry experts noted that “these performance metrics met the data center reliability requirements of the world’s top-tier companies.” An HD Hyundai Heavy Industries official said, “The continuous stream of collaboration inquiries in the data center power engine market is proof that the HiMSEN engine’s technology and reliability have been validated. We will explore various business opportunities to expand our presence in the power equipment market.” Building on this contract, the two companies plan to expand cooperation beyond power engines into follow-up projects.
The US data center power equipment market is growing rapidly due to the expansion of AI services and increased investment in cloud infrastructure. The US Electric Power Research Institute (EPRI) projects that data centers’ share of total US electricity consumption could more than triple by 2030 compared to current levels. Amid this surge in demand, the importance of stable and reliable backup power systems is rapidly emerging.
HD Hyundai is strengthening its group-wide push into the data center power infrastructure market. HD Korea Shipbuilding & Offshore Engineering (009540), the intermediate holding company for the shipbuilding division, is focusing on developing core technologies for floating data centers (FDCs) that use seawater as a coolant. HD Hyundai Electric (267260) is expanding its supply of distribution and power equipment, while HD Hyundai Marine Solution (443060) is growing its power engine maintenance and repair business, building a one-stop solution spanning from orders to maintenance.
Meanwhile, the expansion of AI data center investment is expected to become a new growth driver for South Korea’s steel industry. AI data centers carry heavy loads from graphics processing unit (GPU) servers, cooling equipment, and uninterruptible power supplies (UPS), significantly increasing the use of structural steel products such as large H-beams, thick plates, and rebar. Hyundai Steel estimates that approximately 180,000 to 200,000 tons of steel products are required for the construction of 1GW of data center capacity. A single memory semiconductor fabrication plant (fab) uses about 100,000 tons of steel. KB Securities analyzed that if South Korea’s domestic AI data center investments proceed as planned, steel demand could increase by up to 1.5 million tons.
Major steelmakers posted mixed second-quarter results. POSCO recorded revenue of 9.41 trillion won (approximately $6.7 billion) in the second quarter, up 5.2% year-on-year, but operating profit fell 46.6% to 274 billion won (approximately $193.6 million). Hyundai Steel also saw revenue rise 2.7% to 6.11 trillion won (approximately $4.3 billion), but operating profit dropped 43.3% to 57.7 billion won (approximately $40.8 million). In contrast, Dongkuk Steel saw improved profitability, posting revenue of 995.5 billion won (approximately $703.3 million), up 11.4%, and operating profit of 45.6 billion won (approximately $32.2 million), up 52.3%, driven by the seasonal peak period and expanding demand from industrial infrastructure such as semiconductors and AI data centers.
The steel industry views the normalization of selling prices in the second half and mega projects centered on AI and semiconductors as key factors for earnings improvement. POSCO is normalizing selling prices through price negotiations with downstream industries such as automotive and shipbuilding, while Hyundai Steel is reflecting automotive steel sheet price increases starting in August and is also pursuing higher prices for shipbuilding thick plates. However, the continued influx of low-priced Chinese steel products and the prolonged domestic construction slump remain burdensome factors.
Securities analysts expect the steel industry to enter a phase in the second half where both selling price recovery and sales volume growth occur simultaneously. The outlook is that investment in advanced industries such as AI data centers and semiconductor clusters will create new demand, gradually making the steel industry’s earnings improvement more pronounced.