As the artificial intelligence market undergoes explosive growth and power supply shortages intensify, South Korea’s shipbuilding industry is emerging as a potential game-changer. The sector is not only supplying marine engines for data center power generation but is also expanding into floating data centers (FDCs) — literally placing data centers on the ocean — as competition to capture the next-generation infrastructure market heats up.
According to industry sources on July 9, Hanwha Engine is set to complete a four-stroke medium-speed engine plant in Changwon, South Gyeongsang Province, this August. The company has historically produced two-stroke low-speed engines primarily used for ship propulsion, but the new facility will allow it to directly manufacture power generation engines, broadening its business scope. Industry observers are placing significant weight on the possibility that Hanwha Engine will sell engines produced at this plant for AI data center applications.
Marine power generation engines are rapidly emerging as a new alternative amid a supply bottleneck for power generation equipment driven by the AI data center construction boom. Orders for existing power generation equipment, including conventional diesel engines and gas turbines, have surged, causing severe delivery delays. For gas turbines, the order backlog is so serious that current orders face lead times of 60 months or more from placement to operational deployment. In contrast, marine power generation engines are capable of 24-hour continuous operation with high output, making them well-suited as a stable power source for AI data centers.
HD Hyundai Heavy Industries has already proven this in the U.S. market. In April, the company signed a ₩627.1 billion (approximately $414.6 million) contract with AEG, a U.S. energy infrastructure developer, to supply power generation equipment based on its 20-megawatt (MW) “HiMSEN Engine.” This marks the first successful entry into the data center market by a South Korean marine engine manufacturer, raising expectations for additional orders going forward.
The shipbuilding industry’s appeal extends well beyond power generation engines. The sector is actively pursuing the relocation of data centers to the ocean to address the chronic problems facing land-based facilities. Onshore data centers face challenges related to land acquisition, power supply, and enormous cooling costs. Floating data centers on the ocean can draw power from renewable energy sources such as offshore wind while using abundant seawater to cool server heat, offering the potential to dramatically improve energy efficiency.
Major South Korean shipbuilders are accelerating FDC technology development. HD Korea Shipbuilding & Offshore Engineering announced on July 8 that it had signed a memorandum of understanding (MOU) with Schneider Electric, a global data center infrastructure solutions company, to jointly develop power and cooling infrastructure technology optimized for maritime environments. Samsung Heavy Industries moved even earlier, securing approval in principle for its 50 MW-class FDC concept design from the American Bureau of Shipping (ABS) and Lloyd’s Register (LR) at the “2026 Data Center World” conference held in Washington, D.C., this past April. The model is a barge-type design that uses liquefied natural gas (LNG) as fuel for self-generation to operate the data center. Samsung Heavy Industries signed a joint development agreement last month with U.S. AI server company Supermicro and is targeting commercialization in the second quarter of 2028.
The shipbuilding industry’s focus on the FDC market is driven by high profitability potential. According to DS Investment & Securities, the construction cost of a conventional onshore data center, excluding land and graphics processing units (GPUs), ranges from $800 million to $1.2 billion per 100 MW. An FDC is a high-value-added structure that adds seawater cooling systems and various safety equipment, and is therefore expected to command significantly higher vessel prices and profitability than standard commercial ships. International credit rating agency Moody’s has projected that up to $3 trillion will be invested in AI data center infrastructure construction by 2030.
“Shipyards with large docks capable of building large-scale FDCs are limited globally to just South Korea, China, and Japan,” a shipbuilding industry official emphasized. “The experience gained from designing and constructing offshore plants will also be an important competitive advantage.”
However, significant hurdles remain before FDCs can fully establish themselves as next-generation infrastructure. International standards and safety regulations have yet to be developed, and there is insufficient empirical data on the impact of maritime conditions — including vibration, tilt, salt, and humidity — on expensive AI servers and data center equipment. Another industry official noted, “Current cooperation between shipbuilders and data center companies is at the stage of developing technologies for maritime positioning control and salt and humidity protection, and verifying whether AI servers can be operated stably in actual maritime environments. Additional testing and standard-setting are needed before commercialization can occur.”