HD Korea Shipbuilding & Offshore Engineering is moving to expand production capacity for its proprietary medium-speed engine, the HiMSEN, seizing on explosive power demand from the artificial intelligence and data center markets as a new growth engine. During a second-quarter earnings conference call on the 29th, the company stated, “Given current orders and customer inquiries, expanding production capacity is clearly necessary,” adding that it is “reviewing the matter from multiple angles.”<\/p>\n
HD Korea Shipbuilding’s current annual HiMSEN engine production capacity stands at approximately 3 gigawatts (GW). While the company did not disclose specific expansion figures, it indicated plans to sequentially increase output while monitoring market conditions and order trends. Notably, the company intends to apply an integrated production system\u2014handling everything from raw material input to finished product output\u2014at any new plant, while also pursuing a specialization strategy that allocates ship engines and power generation engines among its existing Ulsan plant, the HD Hyundai Marine Engine plant in Mokpo, and the new facility.<\/p>\n
The expansion push coincides with a surge in power infrastructure demand driven by increased AI data center investment. As bottlenecks emerge in the global gas turbine supply chain, medium-speed engines capable of rapid start-up and 24\/7 uninterrupted operation are emerging as a viable alternative. In April, HD Hyundai Heavy Industries signed a contract to supply 33 units of 20-megawatt (MW) HiMSEN engines for data center power to U.S. energy infrastructure developer Aperion Energy Group (AEG). The engines offer an advantage in carbon emission reduction as they can run on dual fuels, including diesel and liquefied natural gas (LNG).<\/p>\n
The company has designated offshore data centers as a core future business and is accelerating commercialization efforts. The short-term plan involves using HiMSEN engines as the primary power source for offshore data centers, with a mid-to-long-term vision of transitioning to a carbon-free data center model combining offshore wind power and small modular reactors (SMRs).<\/p>\n
Lee Tae-won, Senior Vice President of Offshore Energy Sales at HD Hyundai Heavy Industries, said during the call, “We are in close and detailed discussions with several related companies regarding offshore data centers,” adding that the company is “striving to produce tangible results.” Offshore data centers are expected to employ various structural types\u2014including floating, fixed-platform, and semi-submersible designs\u2014depending on weather conditions and scale at the installation site.<\/p>\n
In the SMR sector, cooperation with U.S.-based TerraPower is a key pillar. HD Hyundai Heavy Industries signed a memorandum of understanding with TerraPower in May for the fabrication and supply of core SMR reactor equipment, securing preferred bidder status. Lee added that the company is “preparing to develop various forms and types of SMR power generation facilities based on SMR power modules,” with several technology developments underway, including SMRs designed for installation on car carriers.<\/p>\n
The second-quarter earnings released by HD Korea Shipbuilding on the same day underpin its confidence in expanding AI and data center businesses. Consolidated revenue reached 8.93 trillion won (approximately $6.2 billion), up 20.2% year-on-year, while operating profit surged 72.5% to 1.65 trillion won (approximately $1.1 billion), setting a new quarterly record.<\/p>\n
The earnings improvement was driven by an increased revenue share from high-priced vessels and enhanced productivity. Revenue in the core shipbuilding division reached 7.45 trillion won (approximately $5.1 billion), with an operating profit of 1.4 trillion won (approximately $964.4 million), yielding an operating margin of 18.8%. Notably, HD Hyundai Samho achieved a high operating margin of 22.5% by advancing its construction schedule by approximately 10 days to two weeks ahead of plan. The engine and machinery division also saw operating profit rise 33.6% to 268.6 billion won (approximately $185.2 million), buoyed by strong sales of eco-friendly dual-fuel engines and land-based power generation HiMSEN engines.<\/p>\n
Looking at second-quarter performance by major affiliates, HD Hyundai Heavy Industries posted revenue of 6.33 trillion won (approximately $4.4 billion) and operating profit of 1.04 trillion won (approximately $717.0 million). HD Hyundai Marine Engine recorded revenue of 128.1 billion won (approximately $88.3 million) and operating profit of 31.3 billion won (approximately $21.6 million), maintaining a 24.4% operating margin. HD Hyundai Energy Solutions also reported revenue of 165 billion won (approximately $113.8 million) and operating profit of 36.1 billion won (approximately $24.9 million), helped by expanded overseas sales.<\/p>\n
First-half order intake is also on a strong trajectory. HD Korea Shipbuilding’s shipbuilding affiliates secured a total of $16.38 billion in orders in the first half alone, already achieving 96.2% of their annual target. HD Hyundai Heavy Industries reached its annual order target early. The company has secured an order backlog of over 500 vessels, representing roughly three and a half years of work, centered on high-value ship types including 38 very large gas carriers (VLGCs) and 17 LNG carriers.<\/p>\n
The company plans to maintain its selective order strategy focused on maximizing profitability rather than expanding volume in the second half. HD Korea Shipbuilding stated, “As the merchant ship division has already secured a solid order volume, we will focus on high-value gas carriers that can generate the highest revenue and profitability per slot.” Despite second-half uncertainties including the geopolitical situation in the Middle East, the company assesses that structural ordering drivers\u2014tightening environmental regulations and replacement demand for aging vessels\u2014remain intact.<\/p>\n
Below is a summary of second-quarter results for HD Korea Shipbuilding and its major affiliates.<\/p>\n
CompanyRevenue (100M KRW)Operating Profit (100M KRW)Operating MarginHD Korea Shipbuilding (Consolidated)89,27016,45118.4%HD Hyundai Heavy Industries63,32210,39916.4%HD Hyundai Samho23,7145,34122.5%HD Hyundai Marine Engine1,28131324.4%<\/p>\n
Note: HD Korea Shipbuilding’s consolidated results include all business segments, including shipbuilding, engine and machinery, offshore plants, and energy solutions.<\/p>\n","protected":false},"excerpt":{"rendered":"HD Korea Shipbuilding & Offshore Engineering is moving to expand production capacity for its proprietary medium-speed engine, the…\n","protected":false},"author":2,"featured_media":102914,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[53289,716,717,19060,6630,11382,6746,295,1992,13707,27239,14727],"class_list":["post-102913","post","type-post","status-publish","format-standard","has-post-thumbnail","category-hd-hyundai-heavy","tag-aperion-energy-group-aeg","tag-hd-hyundai-heavy","tag-hd-hyundai-heavy-industries","tag-hd-hyundai-marine-engine","tag-hd-hyundai-samho","tag-hd-korea-shipbuilding-offshore-engineering","tag-himsen-engine","tag-hyundai","tag-lng-carrier","tag-offshore-data-center","tag-small-modular-reactor-smr","tag-terrapower"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/102913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=102913"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/102913\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/102914"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=102913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=102913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=102913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}