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HD Hyundai Heavy to Invest 834 Billion Won in New Power Engine Factory Amid AI Demand
HD Hyundai Heavy Industries announced on Thursday it will invest 833.6 billion won ($600 million) to construct a new factory for large-scale power-generation engines, a strategic move to meet surging global electricity demand driven by the artificial intelligence boom.
Investment Details
The plan, approved by the company's board of directors, will fund the acquisition of land, the construction of a new factory, and the installation of production equipment. According to a company statement, the total investment represents 8.92% of the company’s equity capital.
The project is scheduled to run from September 10, 2026, through May 31, 2028, although the company noted the timeline and investment amount could be adjusted based on business conditions. Following the announcement, shares in Hyundai Heavy Industries (KS:329180) closed 1.6% higher, outperforming the broader KOSPI index.
Tapping the AI Power Boom
The expansion is a direct response to the expanding market for land-based power generation, particularly for energy-intensive data centers that support AI and cloud computing. This move strategically diversifies the company’s revenue streams, which have historically been concentrated in marine engines for the shipbuilding industry.
AdHD Hyundai Heavy recently secured its largest-ever power-generation engine order, agreeing to supply 1,000 megawatts of capacity to U.S. energy infrastructure developer Corban Energy Group for data centers. This underscores the growing demand the new facility aims to meet.
Industry Context and Outlook
The investment comes as the global AI buildout places unprecedented strain on power grids. The South Korean government, for example, expects AI-related expansion by Samsung Electronics and SK Hynix, along with new data centers, to add 25-30 gigawatts to national power demand.
HD Hyundai Heavy had previously stated its current HiMSEN engine capacity was around 3 gigawatts and that it was reviewing further expansion due to a strong pipeline of orders. This new factory solidifies the company's commitment to capturing a larger share of the essential infrastructure market supporting the global technology sector.
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