Korean Energy Giants Capitalize on US Grid Expansion Surge
Expansion of South Korean Power Equipment Industry in the U.S. Market
South Korea’s LS ELECTRIC, a subsidiary of the LS Group specializing in power and automation systems, has recently secured a significant contract worth 170 billion won ($123 million) to supply ultra-high-voltage transformers to renewable energy facilities across several western states in the United States. The company plans to manufacture these components at its domestic facilities and initiate shipments in 2027. This development marks an important milestone for the company as it expands its global footprint.
The South Korean power equipment industry, traditionally focused on domestic markets and sectors such as automobiles and semiconductors, is now experiencing a surge in global demand. This shift is driven by the increasing need for grid modernization, which is being fueled by the rapid growth of artificial intelligence and the expansion of hyperscale data centers.
A senior industry official in Seoul noted that as the U.S. turns to Korean shipbuilders and Europe to Korean defense contractors, there is growing anticipation that Korean power infrastructure firms will become a major player in the global market. This sentiment reflects the broader trend of South Korean companies diversifying their operations and tapping into international opportunities.
In the U.S., aging power grids are struggling to keep up with the demands of digital expansion. Even in tech hubs like Silicon Valley, outdated infrastructure frequently leads to blackouts. The construction of massive data centers by big tech companies is significantly increasing the demand for high-capacity electrical systems. According to the International Energy Agency (IEA), global electricity consumption from data centers is expected to more than double by 2030, surpassing Japan’s current national usage.
The IEA also highlighted concerns that 20 percent of planned data centers may not operate as intended due to insufficient grid infrastructure. Recent reports from the Financial Times indicate that U.S. utilities are facing an unprecedented number of grid connection requests, creating serious challenges for expansion efforts.
Amid this backdrop, Korean manufacturers are witnessing a sharp increase in orders. LS ELECTRIC’s North American revenue rose from 13 percent of total sales in the first quarter of 2023 to 24 percent during the same period this year. The company reported that more than half of its new orders for switchboards and high-voltage transformers in Q1 originated from North America.
Another major player, Hyosung Heavy Industries, recently secured a 264.1 billion won order for ultra-high-voltage circuit breakers from a U.S. utility—the largest single contract in the company’s history for that product line. As of the first quarter, Hyosung’s power equipment backlog stood at 10.4 trillion won, while LS ELECTRIC followed with 3.9 trillion won. HD Hyundai Electric reported a backlog worth $6.16 billion, or about 8.4 trillion won. Combined, the three firms now hold more than 22 trillion won in outstanding orders.
To meet rising demand, Korean companies are investing heavily in local production within the U.S. HD Hyundai Electric is investing 185 billion won to expand its plant in Alabama. Hyosung plans to double capacity at its Memphis, Tennessee, site, and LS ELECTRIC has completed construction of its “Bastrop Campus” in Texas to supply power systems for large-scale tech data centers.
What sets these companies apart is their technological expertise. High-voltage transmission requires sophisticated engineering to minimize energy loss, and Korean firms are recognized for their ability to design and deliver advanced systems at scale. Additionally, geopolitical factors play a role, as the power sector is often tied to national security. This has led U.S. and European buyers to favor firms based in allied nations. Korean companies are also gaining recognition for their reliability in delivery and execution, which is crucial in an era of tightening energy timelines.