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Power equipment makers post big Q3 earnings on AI boom

Published: 23 Oct. 2025, 19:08

A high-voltage transformer manufactured by HD Hyundai Electric [HD HYUNDAI ELECTRIC]

Korean power equipment makers continued to post strong earnings in the third quarter, driven by booming demand for high-voltage transformers and data center infrastructure amid a global AI investment surge.

HD Hyundai Electric reported Thursday that sales rose 26.2 percent to 995.4 billion won ($692 million) on year from July to September, while operating profit jumped 50.9 percent to 247.1 billion won.

Sales of power equipment rose 87.7 percent, buoyed by growing transformer sales in key overseas markets and high-voltage circuit breakers at home. Its operating margin hit a record 24.8 percent.

New orders totaled $1.21 billion in the third quarter, up 71.4 percent compared to the same period last year. The growth came from large-scale supply contracts for 765-kilovolt ultra-high-voltage transformers in North America and increased orders from Europe. The company’s order backlog now stands at $6.983 billion.

“With continued global investment in AI projects and environmentally friendly infrastructure, we plan to further expand our order base,” a Hyundai Electric representative said.

LS Electric, which reported its earnings a day earlier, also posted strong results. Its consolidated sales rose 19.1 percent on year to 1.21 trillion won, while operating profit climbed 51.7 percent to 100.8 billion won. Growth in North America's data center market and demand for ultra-high-voltage transformers contributed to the gains.

The company’s total backlog stands at 4.1 trillion won, with orders for ultra-high-voltage transformers alone reaching a record 1.9 trillion won, driven by new contracts and expanded clientele in the United States.

LS Electric's data center distribution panel products [LS ELECTRIC]

Boosted by the upbeat earnings and revised analyst forecasts, LS Electric shares jumped 15.49 percent during Thursday trading to 369,000 won, setting a new 52-week high on the Kospi.

Hyosung Heavy Industries, which is set to announce its results next week, is also expected to post strong earnings. The company is projected to post 1.42 trillion won in sales and 157.5 billion won in operating profit for the third quarter — up 23.8 percent and 41.3 percent, respectively, from a year earlier, according to financial data provider FnGuide.

Korean power equipment firms are experiencing rapid growth as demand surges from both aging power grid replacements in North America and the expanding infrastructure needs of AI data centers. Many large transformers in the United States are reportedly over 40 years old and nearing the end of their service life.

Employees inspect ultra-high voltage transformers at Hyosung Heavy Industries' Changwon plant on March 26. [YONHAP]

Ultra-high-voltage transformers, which can reliably handle the immense power needs of the AI era, are also gaining attention.

In response to this “super cycle,” companies are ramping up investment in new and expanded manufacturing facilities. HD Hyundai Electric plans to invest 400 billion won in its second plant in the U.S. state of Alabama and an expansion of its Ulsan factory.

LS Electric will complete its 100 billion won expansion of its ultra-high-voltage transformer plant in Busan by the end of the year and begin operations in December.

“With the Busan expansion, LS Electric’s production capacity will triple from 200 billion won to 600 billion won,” said Kim Tae-hyun, an analyst at IBK Investment & Securities. “The company is also diversifying its data center customer base and expanding into various U.S. industries, including semiconductor packaging and fuel cells, which will further support its overseas growth.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY CHOI SUN-EUL [[email protected]]