HD Hyundai Electric, LS ELECTRIC, and Hyosung Heavy Industries are among the South Korean power equipment companies that are consecutively securing orders for ultra-high voltage transformers in the United States. The ultra-high voltage transformer market in the U.S. is experiencing a boom due to the replacement of aging power equipment and the demand for new data centers.
According to the industry on the 17th, power equipment companies have also secured quantities to be delivered in 2031. An industry official noted, "It typically takes about nine months to manufacture ultra-high voltage transformers, but due to increased demand, there is a shortage of materials, so it actually takes about two years," adding, "In the U.S., orders are being received even for quantities to be delivered in 2031."
The market share of South Korean corporations in the U.S. ultra-high voltage transformer market is estimated to be around 25%. Unlike Korea, the U.S. structure has private power companies issuing bid announcements, so accurate statistics are not available.
Among South Korean corporations, HD Hyundai Electric has the highest market share based on sales. HD Hyundai Electric has been producing ultra-high voltage transformers since building a factory in the U.S. in 2011. It has the longest history of entering the U.S. market among domestic corporations. The company plans to invest 185 billion won to expand its North American factory.
Hyosung Heavy Industries took over the ultra-high voltage transformer factory of Japan's Mitsubishi in Memphis, Tennessee, for $46.5 million (about 6.45 billion won) in 2019 and has been operating it since 2020. The company is currently undergoing a second expansion. LS ELECTRIC is set to complete its production and research facility, known as the "Bastrop Campus," in Texas and will produce power equipment, including ultra-high voltage transformers.
According to the Korea International Trade Association, the export ratio of transformers from Korea to the U.S. has increased from 32.3% in 2010 to 63.3% last year. A significant reason is that about 66% of U.S. transformers are due for replacement because the American power grid is aging. According to the U.S. Department of Energy, the average age of ultra-high voltage transformers used in plants in the northeastern U.S., including Pennsylvania and Ohio, has exceeded the service life of 40 years.
The main factors for the recognition of South Korean power equipment in the U.S. are technological capability and adherence to delivery dates. An industry official mentioned, "When a blackout occurs, significant damage can happen, so technology that can ensure safety has to be in place."