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HD Hyundai Electric invests $200m in US transformer plant
HD Hyundai Electric, a South Korean power equipment maker, said it will invest around US$200 million to build a second US factory at its North American production subsidiary, HD Hyundai Power Transformers USA, in Montgomery City, Alabama, to expand ultra-high-voltage transformer production amid rising US grid investments and demand from AI data centers.
Groundbreaking was held on March 6; plant completion is expected by April 2027.
HD Hyundai said the facility will boost production capacity by about 50%, establish new testing and production facilities for 765kV-class transformers, and it expects around 2 billion Korean won in additional annual sales.
HD Hyundai Power Transformers USA, founded in 2011, grew sales from US$100m in 2017 to US$400m in 2025, with headcount rising from 100 to 460.
The company said the new factory should create about 200 jobs and that combined with an expanded Ulsan plant, the new facility strengthens HD Hyundai’s North American transformer presence.
🔗 Source: Chosun Daily
🧠 Food for thought
Implications, context, and why it matters.
Transformer lead times now run past two years, widening the supply gap
- HD Hyundai is investing as delivery times keep climbing. Wood Mackenzie’s second quarter 2025 survey puts averages at 128 weeks for power transformers and 144 weeks for generator step-up transformers 1.
- U.S. power-transformer demand has jumped 119% since 2019. Over the same stretch, unit prices rose 77%, according to Wood Mackenzie 1.
- Richer pricing has lifted returns. HD Hyundai Electric posted a 24.4% operating margin in 2024 2.
- The Montgomery City, Alabama plant is set for completion in April 2027. The schedule lines up with new U.S. plants from Siemens Energy and Eaton as suppliers add capacity 1.
Power gear now sets the pace for AI growth
- Amazon, Microsoft, Google, and Meta spent more than $200 billion on capital expenditures in 2024. That outlay has added heavy pressure to the power grid 3.
- Data centers could reach up to 12.0% of U.S. electricity use by 2028, up from 4.4% in 2023 3.
- Shortfalls also hit other equipment. POWER puts medium-voltage switchgear prices up about 50% since 2021, while medium-voltage circuit breakers climbed 47% 1.
- AI expansion now depends on manufacturing and installing transformers plus switchgear, which can take years 1.
