Power equipment makers race to expand US capacity amid AI boom

Power equipment manufacturers are rapidly expanding U.S. production and obtaining significant supply contracts as the artificial intelligence (AI) data center surge fuels demand for a wide range of equipment, from high-voltage transformers to distribution gear. This intensifying competition among suppliers for major contracts has prompted companies like HD Hyundai Electric, LS Electric, and Hyosung Heavy Industries to boost their investments in domestic manufacturing to meet the increasing demand from U.S. tech firms constructing AI data centers.

HD Hyundai Electric recently announced plans to build a second plant in Alabama, set for completion in April. This expansion is projected to increase the company's extra-high-voltage transformer production capacity by approximately 50 percent and allow it to manufacture transformers rated up to 765 kilovolts. In July, the company secured a substantial supply contract worth 1.12 trillion won ($836.8 million) with a global technology firm.

The contract includes 567.3 billion won ($423.7 million) in payments for power equipment and 553.9 billion won ($391.1 million) for distribution equipment, all intended for data center construction. HD Hyundai Electric reported a revenue of 1.18 trillion won and an operating profit of 284.5 billion won in the third quarter of the year.