Korean transformer makers hit jackpot in US market

Six-year order backlog signals structural boom in American power sector

South Korean power equipment manufacturers, including HD Hyundai Electric, LS Electric Co., and Hyosung Heavy Industries, are securing a string of orders for extra-high-voltage transformers in the United States, as demand surges amid a nationwide push to replace aging infrastructure and build new data centers.

As of July 17, industry sources said domestic power equipment firms have already lined up orders through 2031. “It usually takes about nine months to manufacture an extra-high-voltage transformer,” one industry official said. “But with demand rising and materials in short supply, it now realistically takes up to two years. U.S. customers are placing orders through 2031.”

LS Electric conducts testing on high-voltage transformers used in direct current power conversion./LS Electric

South Korean companies are estimated to hold approximately 25 percent of the U.S. extra-high-voltage transformer market. Unlike in South Korea, where public utilities typically manage procurement centrally, the U.S. power market is driven by private companies issuing their own tenders, making it difficult to obtain comprehensive market data.

Among Korean firms, HD Hyundai Electric holds the largest market share by revenue. The company established a production facility in the United States in 2011 and has the longest operational track record in the market among domestic peers. It plans to invest 185 billion won ($133 million) to expand its transformer plant in Alabama.

Hyosung Heavy Industries entered the U.S. market in 2019 by acquiring a former Mitsubishi transformer plant in Memphis, Tennessee, for $46.5 million. The facility began operations in 2020 and is currently undergoing a second phase of expansion.

LS Electric recently completed its Bastrop Campus in Texas, which will function as both a production base and research and development center for extra-high-voltage transformers and related power equipment.

According to the Korea International Trade Association, the share of South Korea’s transformer exports destined for the United States increased from 32.3 percent in 2010 to 63.3 percent in 2024.

A key factor behind this growth is the aging U.S. power grid, with 66 percent of transformers marked for replacement since 2022. The U.S. Department of Energy reports that the average age of extra-high-voltage transformers in northeastern states such as Pennsylvania and Ohio has exceeded the typical 40-year operational lifespan.

Industry experts note that South Korea’s competitiveness in the U.S. market stems from its advanced technology and consistent on-time delivery. “A blackout can cause catastrophic damage, so technical capabilities that guarantee safety are essential,” one official said.