Hyosung Heavy Industries wins power equipment deal for massive India data center project

A 420kV extra-high-voltage circuit breaker made by Hyosung Heavy Industries. [Hyosung Heavy Industries]

Hyosung Heavy Industries has secured a power equipment supply deal for a large-scale data center project in India, with analysts crediting the company's dominant position in the local power equipment market as a key factor in winning the contract. As surging data center demand drives an explosion in orders for power equipment, Hyosung Heavy Industries, HD Hyundai Electric and LS Electric are all racing to expand production capacity.

Earnings outlook brightens on string of orders

According to industry sources Tuesday, Hyosung T&D India — the Indian subsidiary of Hyosung Heavy Industries — has agreed to supply 400-kilovolt gas-insulated switchgear for the Hyderabad CtrlS Chandanvelly Hyperscale Data Center Park project, described as India's largest next-generation digital infrastructure development. GIS safely cuts off electricity when a fault occurs in the power grid and is one of the key components in a switchboard system.

The project involves constructing a hyperscale data center complex near the Chandanvelly industrial park. The power demand required to operate the complex is estimated at 600 megawatts.

Hyosung Heavy Industries has been on a sustained order-winning streak amid rising demand for power equipment. On Thursday, the company signed a long-term power equipment supply contract worth 310 billion won ($202 million) with AusNet, the sole transmission network operator in the Australian state of Victoria. The India deal is expected to open further opportunities to expand its data center order book.

Hyosung Heavy Industries described the contract as "a demonstration of our capability to supply power infrastructure for large-scale data centers," adding that it "will serve as an opportunity to further strengthen our competitiveness and leadership in the data center market." The company declined to disclose the contract value.

The win reflects the strong reputation Hyosung Heavy Industries has built in India. Hyosung T&D India holds more than 50 percent of the local extra-high-voltage circuit breaker market. In the segment above 800 kilovolts, its market share reaches 90 percent.

The run of orders points to a strong earnings trajectory for Hyosung Heavy Industries. Securities analysts project the company's second-quarter operating profit at 284.5 billion won, up 73.2 percent from 164.3 billion won in the same period last year. With its order backlog exceeding 15 trillion won as of the end of March, operating profit is expected to keep climbing.

Data center expansion drives switchboard business push

A distribution circuit breaker production line at HD Hyundai Electric's distribution campus. [HD Hyundai Electric]

Other power equipment makers are also expanding their data center order books. HD Hyundai Electric recently signed a contract to supply distribution and power equipment for data centers operated by global big tech companies, with the deal valued at up to 1.12 trillion won. LS Electric last month signed a contract worth $70.43 million to supply high-voltage power distribution systems for an AI data center construction project in North America.

Data center orders for power equipment makers are expected to keep growing. The rapid expansion of the AI market is fueling demand for data centers, the infrastructure that underpins it. Market research firm Fortune Business Insights projects the global data center market will grow from $300.64 billion this year to $699.13 billion by 2034, more than doubling in size.

A rendering of LS Electric's Utah facility expansion. [LS Electric]

Power equipment companies plan to strengthen their switchboard operations to meet growing data center demand. Delivering power from generating plants to large-scale data centers in a stable manner requires a more sophisticated switchboard system than before.

Hyosung Hico, a subsidiary of Hyosung Heavy Industries, has established a gas circuit breaker joint venture with a subsidiary of Quanta, a North American energy infrastructure solutions company. The joint venture plans to begin producing extra-high-voltage circuit breakers at Quanta's factory in Pennsylvania.

HD Hyundai Electric completed its Cheongju distribution campus last year, with annual production capacity of about 8.5 million units. Through the expansion, HD Hyundai Electric plans to raise the share of distribution equipment in its total sales from the current 15 percent to 30 percent. LS Electric is investing 250 billion won to expand its Utah facility, a key North American production base. The expansion will increase LS Electric Utah's switchboard production capacity to 500 billion won.

yeongdai@heraldcorp.com