Shares of South Korean power-equipment and optical-communications companies are soaring on expanding investment in artificial intelligence data centers. With global Big Tech firms pouring massive funds into AI and demand rising to replace aging U.S. power grids, the power-equipment industry is expected to remain in a boom for some time.
According to the Korea Exchange on the 4th, Sanil Electric was trading at 320,000 won as of 10:44 a.m., up 20.30% from the previous session. Sanil Electric's share price stood only in the mid-100,000-won range in January but has more than doubled since. In the same session, Gaon Cable jumped 19.67%, while the country's three major power-equipment makers — Hyosung Heavy Industries (6.26%), HD Hyundai Electric (5.03%) and LS Electric (6.12%) — also posted strong gains.
The main driver of the rally is rising demand from AI data centers. Hyosung Heavy Industries booked 4 trillion won in new orders in the first quarter, with the U.S. market accounting for more than 70%. HD Hyundai Electric also secured 2.646 trillion won in new orders in the first quarter on the back of U.S. growth — a record quarterly high. LS Electric recently won a new 320 billion won order to supply a North American data center.
U.S. power-grid replacement projects are also fueling demand. As the replacement cycle for aging U.S. power grids arrives, demand for transformers and other power equipment is growing. The combination of AI data center demand and U.S. grid-replacement work has brought an unprecedented boom to South Korea's power-equipment industry. Grid replacement also drives purchases of optical-communications products, with related companies such as Taihan Fiberoptics (14.72%) extending their gains in Thursday's session.
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