On June 25, during a press conference at the distribution campus in Cheongju, Lee Chang-ho, Vice President of HD Hyundai Electric, stated, "The North American data center market is indeed our top priority. Given that existing global top-tier companies are already handling significant volumes, our operations at the Cheongju distribution campus have secured capacity and delivery competitiveness."
Data centers must distribute electricity received from external power grids to internal facilities such as servers, cooling systems, and lighting. This process requires not only high-voltage transformers but also distribution transformers, vacuum circuit breakers (VCB), switchgear, and low-voltage circuit breakers, all of which are deployed in large quantities.
Lee explained, "Data centers house a vast number of computers and many high-load systems like HVAC equipment. Distribution equipment is essential for converting electricity from transformers into usable power. While a building may have one or two high-voltage devices, multiple transformers, circuit breakers, and switchgear are needed as the voltage decreases."
The revenue share from data center projects is rapidly increasing. Lee noted, "Until last year, the revenue share from data center projects was less than 10%. This year, we expect it to rise to the double digits, reaching between 15% and 20%."
HD Hyundai Electric sees potential for expanding its supply chain for data center power equipment not only in North America but also in Central America, Europe, and the Middle East. Lee mentioned, "We are looking at North America, including Canada, and Central America, where related supply chains are established. We are also responding to projects in Europe and the Middle East based on our data center experience and network."
He described the market atmosphere as changing rapidly, stating, "The mood at data center exhibitions this year is markedly different from last year. Suppliers are more optimistic, and discussions are more concrete and faster." He added, "Delays in power approvals or securing power equipment supply chains can lead to overall project delays. There is fierce competition among big tech companies to build and operate quickly, and HD Hyundai Electric maintains a delivery compliance rate of around 95%."
The demand for 38kV VCBs has been highlighted as a prime example of growing needs in the data center sector. Lee pointed out, "We have recently conducted the largest production scale for 38kV VCBs with new clients in the U.S. AI data center sector. Clients are also moving towards securing long-term supply agreements to ensure stability in power equipment supply."
He further noted, "For distribution equipment, we understand that the delivery times for existing clients are around a year or nearly a year. HD Hyundai Electric has proposed delivery times of less than half that, successfully securing significant contracts for data center projects." He emphasized, "We have numerous contracts related to data centers, and we are seeing benefits in quality, delivery, speed, and technical support."
However, he did not disclose specific clients or project names. Lee explained, "Big tech companies have high demands for supply chain security, and contracts often limit exposure. While I cannot specify clients, we are expecting very promising outcomes."
HD Hyundai Electric aims to leverage its global customer base established through high-voltage transformers and the automated production capabilities of the Cheongju distribution campus to expand its presence in the data center power equipment market. As the demand for power in data centers surges due to AI proliferation, the shortage of power equipment is spreading from high-voltage to distribution areas, positioning HD Hyundai Electric's distribution equipment business for a potential supercycle.
* This article has been translated by AI.
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