HD Hyundai Heavy Industries to invest over 1 trillion won in power engines, SMRs

HD Hyundai Heavy Industries will invest 1.07 trillion won ($798 million) to build new factories for onshore power-generation engines and small modular reactors (SMR), a move aimed at getting ahead of AI-driven growth in electricity demand and diversifying its business beyond shipbuilding.

The company disclosed Thursday that it will spend a combined 1.07 trillion won on a new production base for power-generation engines and a dedicated plant for small modular reactors.

Of that, 833.6 billion won will be allocated to build a new 3-gigawatt production base for its Himsen engines in Ulju County, Ulsan.

HD Hyundai Heavy Industries developed the Himsen engine in-house in August 2000. It is used for ship propulsion, power generation — including land-based power plants — and emergency backup power at nuclear plants. Cumulative production had reached 15,000 units supplied to more than 60 countries by 2024.

The facility will span roughly 215,000 square meters (53 acres) and will house an engine assembly and testing plant, a crankshaft machining plant and an engine block casting plant. Construction is scheduled to begin in the first quarter of next year, with the plant expected to be completed by May 2028.

HD Hyundai expects the new base to add 4 gigawatts of annual onshore power-generation engine capacity. The company also plans to split Himsen production between two sites to make manufacturing more efficient: Its existing Ulsan plant will continue to focus on marine engines, while the new plant and HD Hyundai Engine's facility in Yeongam, South Jeolla, will specialize in engines for onshore power generation.

HD Hyundai said the two-site setup is expected to lift total Himsen production capacity, combining marine and onshore power use, from 3 gigawatts to 7.2 gigawatts by 2030.

The company will also invest 238.6 billion won in a dedicated plant to manufacture primary components for SMRs. The plant will be built on a site within HD Hyundai Heavy Industries' Ulsan shipyard, with completion targeted for the first half of 2029.

SMRs scale down output and modularize key equipment compared to large-scale nuclear plants, offering stable power supply alongside lower carbon emissions. Interest in the technology has grown alongside the rapid increase in AI data centers that require large volumes of power around the clock.

HD Hyundai Heavy Industries has already begun moving into the U.S. data center power infrastructure market. In April and August, the company signed power equipment supply contracts worth 627 billion won and 956 billion won with U.S.-based Aypa Power and Kovan Energy Group, respectively.

BY LEE JAE-LIM [[email protected]]