Major orders are pouring in for Korean transformer manufacturers, a core power equipment segment, fueled by the supercycle in artificial intelligence (AI) data centers. Companies plan to accelerate their push into the global transformer market by expanding market share primarily in North America, where big tech firms are concentrated.
LS Electric (010120.KS) said Tuesday that its subsidiary LS Power Solution signed a $70.26 million (approximately 106 billion won) contract with a U.S. energy infrastructure company to supply ultra-high-voltage transformers. LS Power Solution will deliver 345-kV ultra-high-voltage transformers to big tech data centers being built in the central United States from the fourth quarter of next year through the first half of 2028.
LS Electric had previously signed a $46 million (approximately 69 billion won) contract in September last year to supply power distribution solutions for a data center microgrid project. "By being selected as an ultra-high-voltage transformer supplier through our subsidiary, we have demonstrated technological reliability spanning both transmission and distribution," a company official said.
LS Power Solution, acquired by LS Electric in 2024, is the only small and mid-sized Korean company with 154-kV-class technology and facilities. Since the acquisition, it has expanded its product lineup to 345-kV-class transformers. LS Electric plans to aggressively pursue demand including aging transmission grid replacements in the North American data center power infrastructure market, which is expected to grow at an annual average rate of 16% to $37.2 billion (56 trillion won) by 2035.
Iljin Electric (103590.KS) also announced the same day that it signed a contract worth 120 billion won to supply ultra-high-voltage transformers for data centers in Canada. The company plans to sequentially deliver a total of 21 units of 245-kV ultra-high-voltage transformers starting in the first half of next year.
Iljin Electric recorded an order backlog of $1 billion (approximately 1.5 trillion won) as of the end of last year in its heavy electric equipment division, which includes the transformer business, securing several years' worth of revenue pipeline. The company has also significantly expanded its production capacity through measures including an expansion of its Hongseong plant.
"We are currently preparing to win orders for numerous projects and expect to announce additional large-scale orders in the first half of this year," an Iljin Electric official said. "Along with aggressive order-winning activities, we will further strengthen our market competitiveness through production capacity expansion and continued research and development investment."
