The prolonged slump in the housing market and the shift in major reconstruction and redevelopment contracts towards large construction firms like Samsung C&T and Hyundai Engineering & Construction have prompted mid-sized construction companies to accelerate their search for new opportunities in non-residential sectors.
Samsung C&T has already established a substantial revenue and order base in high-tech semiconductor projects, while Hyundai Engineering & Construction has made significant strides in nuclear power and energy sectors. In contrast, companies such as Daewoo Engineering & Construction, DL E&C, GS Engineering & Construction, Hanwha's construction division, and Kolon Global are diversifying their business areas into various fields, including data centers, small modular reactors (SMR), liquefied natural gas (LNG), mixed-use developments, and advanced industrial facilities.
According to the construction industry on November 15, Samsung C&T's construction division reported third-quarter revenues of 4.465 trillion won and operating profits of 277 billion won, marking increases of 44.5% and 149.5%, respectively, compared to the same period last year. The company attributed its improved performance to the ramp-up of high-tech construction projects and favorable progress in overseas building projects.
The high-tech sector, including semiconductor factories, has transitioned from being a future prospect to a core business driving actual performance. Samsung C&T has also raised its annual order target from 23.5 trillion won to 30.1 trillion won, continuing its growth centered on non-residential projects.
Hyundai Engineering & Construction is experiencing similar growth. Its cumulative orders for the third quarter reached 28.8746 trillion won, a 10.6% increase from the previous year, with a backlog of 99.531 trillion won. Strategic projects, including an electric steel mill in the U.S. and an AI data center in Pohang, have supported its performance. The company is expanding into future growth areas such as large nuclear power plants, SMR, solar energy, offshore wind, data centers, and mixed-use developments.
In contrast, mid-sized construction firms are adopting strategies to reduce their reliance on housing by selecting markets where they have competitive advantages rather than focusing on a single sector.
Daewoo Engineering & Construction is emphasizing overseas LNG and plant projects. Its third-quarter revenue was 1.8424 trillion won, a 7.4% decrease from the previous year, but its operating profit surged by 223.7% to 183.2 billion won. As of the end of the third quarter, its order backlog stood at 54.855 trillion won, equivalent to approximately 6.8 years of annual revenue.
The future growth focus for Daewoo is overseas plants. The company is pursuing large project contracts, including LNG CPF in Papua New Guinea and the Rovuma LNG project in Mozambique. In addition to housing and maintenance projects, it is expanding its dedicated data center organization to target the domestic non-residential market.
DL E&C is simultaneously growing its energy and data center sectors. Its third-quarter revenue was 1.5065 trillion won, with an operating profit of 107.3 billion won. Although both revenue and operating profit decreased compared to the previous year, its cumulative new orders for the third quarter increased by 31% to 7.2154 trillion won. The company has secured financial resources with net cash of 1.1238 trillion won and a debt ratio of 79%.
DL E&C is particularly focused on North American energy, SMR, and data centers. It is bidding on a gas power project in Canada and exploring gas power and LNG infrastructure projects in the U.S. In the SMR sector, it is expanding cooperation with U.S.-based X-Energy.
In the data center business, DL E&C has secured a project pipeline worth approximately 2 trillion won, centered around locations such as Hanam, Bucheon, and Dangjin. The key for next year will be whether these projects translate into actual contracts and construction starts.
GS Engineering & Construction is implementing a strategy to offset declining housing revenues with growth in non-residential sectors such as plants and data centers. Until last year, the majority of its revenue came from construction and housing, but it has steadily increased its revenue from plants and new businesses. GS's plant revenue grew from 425.7 billion won in 2024 to 1.3201 trillion won last year, more than tripling, while new business revenue reached 1.7787 trillion won.
Recently, GS has been expanding collaborations with telecommunications and power companies to target the AI data center market, focusing on broadening its business scope beyond simple construction to include power infrastructure and operations.
Hanwha's construction division is prioritizing large mixed-use developments over data centers or nuclear power. The company believes that large-scale projects, such as those in the northern station area of Seoul and the Jamsil MICE complex, will help reduce reliance on housing and secure stable long-term revenues.
Kolon Global is seeking growth opportunities in advanced industrial facilities and asset management. It is expanding construction for industrial facilities, including an engine maintenance plant for Korean Air and production facilities for semiconductor equipment, while establishing a structure to secure operational profits post-construction through leisure and asset management projects.
A construction industry official stated, “Data centers are expected to become a common battleground for mid-sized construction firms, with growing market expectations due to the spread of AI.” However, he cautioned that securing large amounts of power, attracting primary tenants, and the substantial initial investment required mean that not all projects will lead to actual construction starts.
* This article has been translated by AI.
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