South Korean power-equipment suppliers are expected to post stronger third-quarter profit on AI data-center and grid demand
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Market estimates put combined third-quarter operating profit for Hyosung Heavy Industries, HD Hyundai Electric, LS Electric and Iljin Electric at KRW 873.4 billion, up 44.8% year on year. Demand for high-voltage transformers, switchgear and distribution equipment tied to AI data-center build-outs and North American grid renewal is cited as the principal driver.
- Combined third-quarter operating profit for the four suppliers is estimated at KRW 873.4 billion, up 44.8% year on year.
- AI data-center construction and North American grid replacement are cited as drivers of demand for high-voltage electrical equipment.
- Overseas-project delays may defer revenue recognition despite reported order coverage of three to four years.
- Future supplier capacity additions could weaken equipment pricing and margin support.
Market estimates cited on October 20 forecast combined third-quarter operating profit of KRW 873.4 billion for Hyosung Heavy Industries, HD Hyundai Electric, LS Electric and Iljin Electric—an increase of 44.8% year on year.
The expected improvement is linked to demand for high-voltage transformers, circuit breakers and switchboards serving AI data-center development and the replacement of ageing grid infrastructure in North America. For data-center operators and developers, the trend points to continuing demand for the external grid and substation equipment required to connect power-intensive AI loads.
The company-level estimates are KRW 310.3 billion for Hyosung Heavy Industries, up 41.2% year on year; KRW 306.5 billion for HD Hyundai Electric, up 24.0%; KRW 193.9 billion for LS Electric, up 92.4%; and KRW 62.7 billion for Iljin Electric, up 77.6%.
Despite the projected profit growth, market and broker expectations for further sector acceleration have become more cautious. The cited factors include revised forecasts, delays to overseas projects and currency weakness. Project delays, including those associated with the prolonged conflict in the Middle East, may shift revenue recognition on orders already secured.
An industry source said the companies hold three to four years of orders. That indicates a substantial reported order position, but does not confirm equipment deliveries or recognised revenue. Looking ahead, expansion of manufacturing capacity by global suppliers could increase available supply and, in turn, weigh on equipment prices and profitability.
For the data-center market, the result could signal that demand for grid-connected electrical infrastructure remains resilient, while also underscoring the risk that equipment availability and delivery schedules may constrain project execution even if underlying demand remains strong.
The estimates indicate that AI data-center expansion is feeding through to expected earnings for suppliers of critical grid and substation equipment. However, overseas-project delays could defer revenue recognition, while additional manufacturing capacity across the supplier base could eventually ease equipment scarcity and pressure pricing and margins.
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