As domestic power equipment companies move to expand in the global market, orders from Europe are expected to take up a larger share this year following the previously key U.S. market. This is because there is strong investment in eco-friendly and renewable energy and rising demand to replace aging power grids. In contrast, the share from the Middle East, where Chinese companies are entering, is likely to shrink.
According to the power equipment industry on the 27th, major power equipment makers such as HD Hyundai Electric, Hyosung Heavy Industries, and LS Electric expect their European sales to increase this year.
Kim Young-gi, CEO of HD Hyundai Electric, said at an institutional investor meeting on the 14th, "The current share of orders is 40% in the United States, 20% in the Middle East, 10% in Europe, and 10% in the domestic market," adding, "The share of Europe is expected to grow rapidly and surpass the Middle East."
HD Hyundai Electric, focusing on eco-friendly transformers and high-voltage circuit breakers in Europe, posted sales of 127.5 billion won in the third quarter of last year, up 84.5% from the previous quarter and 76.1% from a year earlier. Order volume reached $164 million (about 237.4 billion won), up 49.1% from the previous quarter and 168.9% from a year earlier.
Hyosung Heavy Industries also expanded orders in Europe by signing contracts worth about 230 billion won in the United Kingdom, Sweden, and Spain in Dec. 2025. To strengthen competitiveness in next-generation products such as eco-friendly gas-insulated switchgear (GIS), Hyosung Heavy Industries established an R&D hub in the Netherlands.
LS Electric opened the door to Europe by signing a contract earlier this month with RWE, Germany's largest private power generator, to supply extra-high-voltage transformers worth 62 billion won.
Europe is at the center of the transition to eco-friendly and renewable power. It is also cited, along with the United States, as one of the regions where power grid aging is most severe. In April last year, large-scale blackouts occurred in Spain, Portugal, and the Czech Republic.
According to market research firm Mobilityforesights, the European power grid market is expected to grow at an average annual rate of 9.2%, from $312.4 billion (about 458 trillion won) in 2025 to $528.9 billion (about 775 trillion won) in 2031. The drivers include rising power consumption, expanded adoption of renewable energy, and demand to replace aging grid facilities.
Meanwhile, the share of orders and sales in the Middle East is declining. According to the Korea International Trade Association, Korea's transformer exports to the Middle East in 2025 were $269 million (about 394.4 billion won), down 6.3% from the previous year. This reversed the trend of increases of 86.6% and 17.5% in 2023 and 2024, respectively. Exports fell 19.8% to Kuwait and 83.3% to Qatar.
In the third quarter of last year, HD Hyundai Electric's Middle East sales were 209.6 billion won, down 23.6% from the first quarter of the same year. Order volume was $78 million (112.9 billion won), down 66.2% over the same period.
In particular, the industry expects full-fledged competition with Chinese power equipment companies to begin in the Middle East. As Chinese companies with strong cost competitiveness begin to enter the region, Korean companies are focusing on high value-added products where they hold a technological edge over China, such as extra-high-voltage circuit breakers.
An industry official said, "As Chinese companies actively enter the Middle East market, we are shifting transformer product orders toward Europe," adding, "In Europe, confidence in Chinese technology is still low, so we have a competitive edge."
Kim Kwang-sik, an analyst at Kyobo Securities, said, "Chinese companies are advancing into the Middle East and some Eastern European countries," adding, "Premium products still do not use Chinese products, so strategies are being drawn up to focus on those items."