Aerospace company Lumiere is accelerating its expansion into the ship engine parts business. The company is currently supplying solenoids, a key component for ship engines, exclusively to HD Hyundai Heavy Industries while also pursuing supply agreements with Hanwha Engine. The rapid growth of the power demand for artificial intelligence (AI) data centers is emerging as a new growth driver in the power generation engine market.
According to investment banking sources on May 8, Lumiere is in discussions with Hanwha Engine to expand its supply of solenoids, which are essential for controlling fuel in ship engines. The company currently has an exclusive supply agreement for these components with HD Hyundai Heavy Industries' medium-speed engine brand, HiMSEN.
A Lumiere representative stated, "This is one of several scenarios that may arise during our business expansion process."
Solenoids are electronic valve components that actively regulate engine fuel. Lumiere has successfully localized this product by applying precision control technology acquired during the development of actuators for satellite attitude control. The company is known to have obtained international explosion-proof certification, becoming the first in the world to do so for this product, which had previously relied heavily on Japanese manufacturers.
Recently, Lumiere has also expanded its overseas supply chain. In February, the company signed a contract with Japanese engine parts manufacturer Niko Precision, and last month, it entered into a supply agreement with Amidas Security Tech, based in the United Arab Emirates. Industry experts believe that Lumiere is entering an initial phase of expanding its customer base beyond HD Hyundai Heavy Industries to other domestic and international engine manufacturers.
The market is noting that the surge in power demand from AI data centers is leading to new growth across the shipbuilding and power generation engine sectors. The demand for engine-based power generation facilities is rapidly increasing due to shortages of gas turbines and long lead times.
In fact, HD Hyundai Heavy Industries recently signed a supply contract for power generation facilities worth 627.1 billion won with American company Aepirion Energy Group (AEG), marking the largest contract of its kind in the company's history. Hanwha Engine is also in the process of expanding its medium-speed engine business by constructing a new factory.
In line with these trends, Lumiere has begun expanding its production capacity. The company decided on April 30 to issue permanent convertible bonds worth approximately 33 billion won. The funds will be used to expand the production line for engine solenoids and for operational expenses. The current operating rate of the related production line is reportedly at full capacity.
The company's business focus is also rapidly changing. Internally, Lumiere expects the revenue share from its shipbuilding division to rise from about 23% in 2023 to over 50% this year. Industry analysts predict that if the market for power generation engines for data centers expands, related revenues could nearly double compared to last year.
An investment banking source remarked, "Lumiere is a rare case in South Korea of extending aerospace precision control technology into the ship engine sector. The company is attracting market interest as it can reflect both the recovery expectations of the space industry and the growing demand for engines from AI data centers."
* This article has been translated by AI.
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