Korea Investment Securities has recommended increasing stakes in Hyosung Heavy Industries, a transformer manufacturer, on September 16. The firm believes that concerns over the re-entry of Chinese equipment into the market have eased due to an executive order from the Trump administration, which may alleviate fears of a slowdown in high-voltage transformer demand.
Jang Nam-hyun, a researcher at Korea Investment Securities, stated, "Large-scale data centers must secure stable grid power in the long term, even if they have their own power sources. Recently, data center operators have begun to bear the costs of investing in transmission networks and substation facilities themselves."
Hyosung Heavy Industries continues to secure large orders in the North American market. The company announced on September 15 that it had signed two contracts for the supply of high-voltage transformers in the U.S., specifically for 765kV and 345kV transformers, with a combined contract value of 386.6 billion won. The market views these large orders as a sign that concerns over a peak-out in transformer demand have been somewhat alleviated.
The upward trend in high-voltage transformer demand is expected to continue for the time being. Jang emphasized, "In addition to the demand for replacing aging power grids, the expansion of regional transmission networks due to the construction of AI data centers by big tech companies will contribute to ongoing shortages in high-voltage transformers. Consequently, the growth in order backlogs for domestic power equipment companies, including Hyosung Heavy Industries, HD Hyundai Electric, and LS Electric, is also expected to persist."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.