Chair Cho Hyun-joon pledges $157 million to boost US power-grid capacity as AI, data centers drive electricity demand
Hyosung Heavy Industries said Tuesday that it will invest an extra $157 million in expanding its high-voltage transformer manufacturing plant in Memphis, Tennessee, to turn it into the largest transformer production facility in the United States.
According to Hyosung, the expansion will increase the Memphis site’s production capacity by 50 percent through 2028. This is expected to solidify the Korean firm’s top leadership in the US market as the sole player capable of designing and manufacturing 765-kilovolt ultra-high-voltage transformers in the country.
The additional investment was made by Hyosung Group Chair Cho Hyun-joon, who called for the prompt establishment of a supply system amid rising demand for infrastructure to power artificial intelligence.
“The future of the electricity industry depends not only on facilities, but also on the capabilities to control the power flow, storage and safety altogether,” said Cho.
“With this expansion, we will cement our position as the global No. 1 total solution provider based on our status in the US market.”
Hyosung is estimated to have supplied nearly half of all 765kV transformers installed throughout the American power grid since 2010. After announcing its decision to acquire the Memphis facility from Japan’s Mitsubishi Electric Power Products in 2019, Hyosung has since committed over $300 million into the transformer plant.
According to Hyosung, the chair pushed for the acquisition despite internal concerns over various takeover risks; he deemed securing a local production site essential based on the future growth of the US power market and the usability of the Memphis site’s wide land.
Cho has also been using his worldwide network to search for new business opportunities in the global power market. He discussed changes in the energy industry and business cooperation with various leaders and high-profile figures this year, such as US Energy Secretary Chris Wright; Qatar Minister of Energy Al Kaabi; Safra Catz, former CEO of Oracle and now executive vice chair of the Oracle board of directors; and Fatih Birol, executive director of the International Energy Agency.
Electricity demand has surged in the US amid the need to replace the country's aged power grid and the spread of AI data centers. According to Global Market Insights’ report, the US transformer market is projected to reach $25.7 billion in 2034 from $12.2 billion in 2024 with a compound annual growth rate of 7.7 percent. Wood Mackenzie expects US power companies to secure a new electricity supply of 116 gigawatts for data centers, and to push for 309GW more by 2040.
Hyosung underlined that the additional spending at the Memphis site will bolster its local production and supply capabilities to preemptively cope with US clients.
Meanwhile, Hyosung Heavy Industries logged 1.6 trillion won ($1.1 billion) in revenue and 219.8 billion won in operating profit in the third quarter of this year, posting record-high quarterly figures. The company’s global backlog order stood at 11 trillion won, up 52 percent from the same period last year.
hwkan@heraldcorp.com
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