The global demand for power infrastructure has sparked a surge in transformer exports, particularly from South Korean firms like Hyosung Heavy Industries, LS Electric, and HD Hyundai Electric. These companies, specializing in medium- and large-sized transformers crucial for power grids, have seen their exports increase significantly. From January to May this year, exports of ultra-high-voltage transformers over 10,000 kVA totaled $394.74 million, marking a 47.8% rise from the previous year.

This growth trend reflects a broader supercycle in electric transformers, driven by a surge in orders from the United States amid a replacement cycle for aging transformers and incentives like the Inflation Reduction Act. A typical transformer lasts 20 to 30 years, and with many US transformers nearing the end of their lifespan, demand has intensified.

To meet this demand, South Korean firms are ramping up production capacities. HD Hyundai Electric is investing in plants in Ulsan and Alabama to expand capacity by 20%, while Hyosung Heavy Industries is investing around 100 billion won to increase its ultra-high voltage transformer production by over 40%. LS Electric is also investing 80 billion won in its Busan plant for similar expansions.

Analysts foresee continued strong demand for power equipment, driven by trends such as the AI boom boosting data center growth and thus increasing power consumption. While concerns about future oversupply exist, companies are currently focused on meeting the immediate and growing global demand for transformer infrastructure.

Source: chosun.com