Power engine and SMR factories to be built in Ulsan

MOU signed with Ulsan city Tuesday

Facilities aimed at surging power demand from AI data centers

'Starting point' to lead global energy industry market

HD Hyundai Heavy Industries will invest 1 trillion won to build a power engine production factory and a dedicated small modular reactor component manufacturing factory in Ulsan, as part of its push to capture the global energy industry market. Pictured is an engine factory at HD Hyundai Heavy Industries. [HD Hyundai Heavy Industries]
HD Hyundai Heavy Industries will invest 1 trillion won to build a power engine production factory and a dedicated small modular reactor component manufacturing factory in Ulsan, as part of its push to capture the global energy industry market. Pictured is an engine factory at HD Hyundai Heavy Industries. [HD Hyundai Heavy Industries]

HD Hyundai Heavy Industries will invest 1 trillion won ($722 million) to build a power engine production factory and a dedicated small modular reactor (SMR) component manufacturing factory in Ulsan, in an ambitious bid to transform the city into a world-class energy industry production hub.

HD Hyundai Heavy Industries CEO Lee Sang-gyun and Ulsan Mayor Kim Sang-uk signed the "HD Hyundai Heavy Industries Power Engine and SMR Factory Construction Investment MOU" at the mayor's office on the seventh floor of Ulsan City Hall on Tuesday.

Under the agreement, Ulsan will work to expedite permits and approvals for the two factories and provide administrative support — including deregulation — to facilitate smooth investment by HD Hyundai Heavy Industries.

HD Hyundai Heavy Industries committed to prioritizing local businesses in construction, services and procurement contracts, and to giving preference to Ulsan residents when hiring staff for factory operations.

The company had initially considered investing in other regions but ultimately chose Ulsan after recognizing the city's swift permitting support system and its capacity to resolve investment obstacles, according to sources familiar with the matter.

Through the investment, HD Hyundai Heavy Industries plans to establish large-scale production facilities for both power engines and SMR core components, developing Ulsan into a key manufacturing base for the future energy industry.

The power engine factory — a production base for the company's proprietary "HiMSEN" engines, used for marine propulsion and power generation as well as land-based power generation — will be built in Onsan-eup, Ulju-gun, Ulsan, with a capacity of 3 GW. Construction is set to begin in the first half of next year, with completion scheduled for May 2028.

Once operational, the factory will serve as a multipurpose power generation equipment production facility designed to meet surging electricity demand from AI data centers and other facilities under construction in Ulsan.

The dedicated SMR component manufacturing factory will be built within HD Hyundai Heavy Industries' main factory complex in Dong-gu, Ulsan.

The facility will be developed as a production base for core components of next-generation nuclear power plants, positioning it to meet growing global demand for SMRs. Construction is also set to begin in the first half of next year, with completion targeted for April 2029.

"This investment is an important starting point for leading the future energy industry market," HD Hyundai Heavy Industries CEO Lee Sang-gyun said. "Once the factories are completed, we will proactively respond to rapidly growing power demand and move to capture the global AI-driven market."

"We warmly welcome HD Hyundai Heavy Industries' large-scale production facility investment, which will open a new future for the region," Ulsan Mayor Kim Sang-uk said. "We will do our utmost to help Ulsan grow into a world-class energy industry production hub."


cityblue@heraldcorp.com