HD Hyundai Heavy Industries announced on 10 September that it is to invest a total of KRW 1.0722 trillion (USD 1.072 million) to build two new power generation facilities – an engine production facility and a dedicated manufacturing facility for small modular reactors (SMRs). The investment is aimed at strengthening and securing the company’s future competitiveness in land-based power generation engines and SMRs.
The first investment will be KRW 833.6 billion to build a new 3 GW factory to manufacture its HiMSEN engines in Ulsan, S Korea.
The new production complex will occupy approximately 215 000 square metres and include facilities for engine assembly and testing, crankshaft machining, and engine block casting. Construction is scheduled to begin in the first quarter of 2027, with completion targeted for May 2028 and full-scale operations commencing soon after.
The investment is designed to accelerate HD Hyundai’s expansion into the land-based power generation market by building on decades of expertise accumulated in marine engines, and proactively responding to surging power demand from AI data centres.
Through the expansion, HD Hyundai expects to secure annual production capacity of 4 GW for these engines. The company expects to improve production efficiency by operating separate production bases for its HiMSEN engines. Its main Ulsan facility will focus on HiMSEN engines for marine applications, while the new facility and HD Hyundai Engine in Yeongam, South Jeolla Province, will specialise in HiMSEN engines for land-based power generation.
HD Hyundai expects the increased production efficiency from this dual-base production structure to expand its total HiMSEN engine production capacity from the current 3 GW to 7.2 GW by 2030.
HD Hyundai will also invest KRW 238.6 billion to establish a dedicated manufacturing facility for key SMR equipment, with SMRs increasingly recognised as a next-generation energy source. The facility will be built on the premises of the company’s Ulsan shipyard, with completion scheduled for the first half of 2029.Interest in SMRs has been growing rapidly with the increase in AI data centres, which require large amounts of power round–the–clock.
According to the Organisation for Economic Co-operation and Development (OECD), the global SMR market is projected to grow rapidly to 150 GW by 2050. Meanwhile, only a limited volume of key SMR equipment has been secured for manufacturing and supply, indicating significant potential for future growth.
Earlier this year, HD Hyundai Heavy Industries made a full-scale entry into the US data centre power infrastructure market by signing power generation equipment supply contracts with Aperion Energy Group and Corban Energy Group in April and August respectively. The contracts are valued at KRW 627.1 billion and KRW 956.0 billion.
