After transformers, distribution equipment is next — Korea's power device trio opens a new front in the US

AIDC-driven grid investment shifts to distribution equipment

LS Electric leads, HD Hyundai Electric follows with orders topping 100 billion won

Hyosung Heavy Industries also showcases distribution solutions in the US

LS Electric's UL-certified distribution solution for data centers. [Provided by LS Electric]

The race to supply power equipment for AI data centers in the United States is shifting from transmission gear to distribution equipment. With LS Electric having staked out an early lead in the US distribution market, HD Hyundai Electric and Hyosung Heavy Industries are now entering as challengers, pushing domestic competition into a new phase.

According to industry sources, LS Electric recently signed a 168.9 billion won ($126 million) contract to supply distribution solutions for AI data centers to a US big-tech company from 2027 over two years. The products covered are 38-kilovolt high-voltage switchboards, which distribute high-voltage power to individual facilities inside data centers and manage fault control. LS Electric is also in talks to supply additional distribution equipment, including low-voltage switchboards, distribution-grade transformers and ring main units.

In May, the company signed a 183.5 billion won contract with global power company Bloom Energy to supply switchboards and distribution transformers. Including that deal, LS Electric's cumulative orders with Bloom Energy have surpassed $500 million since the two companies signed their first contract last year.

LS Electric is the front-runner in this space, having obtained UL certification — the official US safety standard for distribution equipment — as early as the 2010s. In 2022, it further strengthened its local production capabilities by acquiring MCM Engineering II, a US-based switchboard manufacturer.

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

HD Hyundai Electric, a relative latecomer to the US distribution equipment market, has also been posting significant results this year. After obtaining UL certification for four types of distribution equipment in October last year, the company has been winning orders by bundling power and distribution equipment into package deals.

A representative example is a 1.12 trillion won supply contract it signed with a global big-tech company in July. Under the agreement, HD Hyundai Electric will supply 567.3 billion won worth of power equipment and 553.9 billion won worth of distribution equipment in line with the client's data center construction schedule.

This year, orders for AI data center power infrastructure have increasingly centered on distribution equipment. Power equipment and distribution equipment each handle opposite ends of the grid: power equipment moves electricity generated at power plants to substations, while distribution equipment delivers it to end users such as homes and factories. "When building a power grid, power equipment orders typically come first, followed by distribution equipment orders," an industry official said.

Per-unit prices are overwhelmingly higher for power equipment such as ultra-high-voltage transformers, but the distribution equipment market is larger overall. Unlike power equipment, which is needed only at utility companies, distribution equipment is required by every electricity consumer, giving it a far broader customer base and a more diverse product lineup. According to market research firm Business Research Insights, the global distribution equipment market is projected to grow from $176.8 billion this year to $290.1 billion a decade from now.

An aerial view of Hyosung Heavy Industries' Changwon Plant No. 1. [Provided by Hyosung Heavy Industries]

Hyosung Heavy Industries, which has focused its exports on power equipment such as ultra-high-voltage transformers and circuit breakers, is also expanding into distribution equipment. At the IEEE PES T&D 2026 transmission and distribution exhibition in the United States in May, the company showcased not only its ultra-high-voltage circuit breakers but also a solid-state transformer — a semiconductor-based distribution device that improves data center efficiency. Building on its position as the top domestic supplier of oil-filled distribution transformers, Hyosung Heavy Industries plans to push exports to the US and other overseas markets.

Large-scale capacity expansion investments in distribution equipment are also accelerating. LS Electric plans to invest $240 million in its Bastrop, Texas campus — its main distribution equipment production hub — through 2030, with the Busan factory focused on ultra-high-voltage transformers and the US campus on distribution equipment. HD Hyundai Electric has invested 116.1 billion won to build a dedicated distribution equipment campus in Cheongju.

klee@heraldcorp.com