How the AI boom is sparking Korea's nuclear revival

CHANGWON, South Gyeongsang — “Clang. Thud.” A heavy metallic sound echoed through the steel manufacturing factory floor.

Waves of heat rippled across the workshop as a steel ingot heated to more than 1,000 degrees Celsius (1,832 degrees Fahrenheit) moved beneath a giant press at Doosan Enerbility’s forging plant in Changwon, South Gyeongsang, on Thursday.

Forging — the process of hammering and shaping red-hot steel into a desired form — is an essential step in manufacturing nuclear reactors.

“Every manufacturing process starts with forging,” said Lee Dong-gi, a senior manager at Doosan Enerbility’s Changwon plant. “[Forging] can transform a block of steel into a major nuclear reactor component or into an engine.”

Korea’s nuclear industry has been in a standstill due to the Moon Jae-in administration’s nuclear power phaseout from 2017 to 2022.  However, the surging demand for electricity — driven by the AI boom — has shed new light on the sector.

On Wednesday, Korea Hydro & Nuclear Power, a state-run energy company, selected Yeongdeok, North Gyeongsang, as the site for two new large-scale nuclear reactors and Gijang, Busan, as the site for a small modular reactor (SMR). The two reactors are scheduled to be completed in 2037 or 2038, and the SMR project in 2035.

Expectations within the industry have also risen, as Korea considers nuclear cooperation as its first major investment project in the United States following tariff negotiations between President Lee Jae Myung and U.S. President Donald Trump.

Due to the large number of closely interconnected working parts — such as massive facilities, highly skilled workers and hundreds of suppliers — the nuclear industry cannot be easily rebuilt. When large forging facilities stop operating, that disrupts the production of key reactor components. And when production of those components slows, the supplier networks involved in materials, machining, inspection and design also weaken.

Industry insiders and experts view recent momentum across the value chain, including forging, equipment manufacturing and engineering design, as a sign that Korea’s nuclear ecosystem is recovering, with the government aiming to export 10 nuclear reactors by 2030.

Additionally, growing concerns over future power shortages in the United States, caused by the rapid expansion of AI data centers and manufacturing facilities, are emerging as a major opportunity for Korean companies.

Korea is among the few countries with established supply chains for both large-scale nuclear reactors and SMRs — a competitive advantage as countries seek more baseload power and flexible next-generation nuclear solutions.

Japan’s renewed embrace of nuclear power, including plans to replace aging reactors, is also creating opportunities for Korean suppliers and builders.

“Only six countries have built nuclear power plants over the past decade,” said Kim Ki-ryong, an analyst at Mirae Asset Securities. “China and Russia face restrictions on participating in U.S. nuclear projects [due to government regulations], and France has no experience constructing reactors designed for the U.S. system.”

“Meanwhile, Korea has nine projects completed over the past 10 years, experience building U.S.-designed reactors and a track record of exporting nuclear plants, making it a strong candidate for the U.S. nuclear industry,” Kim continued.

The SMR is another game changer for the energy industry. Although SMRs generate less electricity than conventional large-scale reactors, they can be factory-built in modules and assembled on-site, making them easier to deploy where power is needed.

As a result, Korean companies are pursuing partnerships across all sectors.

Doosan Enerbility is positioning itself as an SMR foundry manufacturer, and Hyundai E&C is collaborating with Westinghouse on large-scale reactors and SMRs and with Holtec International and TerraPower on SMR construction projects.

Samsung C&T is working with GE Vernova Hitachi Nuclear Energy on large-scale reactors and SMRs and with NuScale Power on SMR construction. DL E&C is partnering with X-energy on SMR projects.

“Korean construction companies are moving beyond simple partnerships,” said Kim. “Cooperation is taking shape through various forms, such as equity investments, exclusive agreements and joint market expansion efforts.”

Korea Hydro & Nuclear Power, which is developing an advanced SMR design, and companies including SK Group, HD Hyundai and GS Energy are working with overseas partners on projects ranging from offshore SMRs to SMR equipment supply.

The International Energy Agency estimates that cumulative global investment in SMRs could exceed $900 billion by 2050.

“Korean companies were recognized mainly for their cost competitiveness in overseas nuclear markets in the past,” said Park Su-yong, the vice president of nuclear sales at Doosan Enerbility. “Today, they are increasingly viewed as reliable partners with strong project execution capabilities and stable supply chains.”

As discussions move from new conventional reactors to next-generation products such as SMRs, Korean companies are being asked to play a larger role in the global nuclear market, according to Park.

“After years of stagnation under the nuclear phaseout policy, new orders are finally flowing into the industry, and the ecosystem is beginning to recover,” said Lee Sang-jun, a professor at the Department of Energy Policy at Seoul National University of Science & Technology. “For Korea’s nuclear ecosystem to thrive, the most important factor is a unified national support system in which the government and businesses work as one team to promote exports.”

Lee added that the government should create an environment in which private companies can take the lead in developing diverse partnership models and competing in the market to dominate the SMR sector, which is still in its early stages.

“The pace of growth in electricity demand in the United States and Europe is unlike anything that we’ve seen before,” said Park. “As AI and data centers continue to expand, companies are seeking high-quality power that can be supplied around the clock without interruption.”

He noted that Big Tech companies are taking the lead in securing electric power supplies, unlike in the past, when demand was driven primarily by governments and electric companies.

“[Businesses] in the United States prioritize the ability to manage risks in projects and ensure a stable supply of critical equipment,” he said.

Park cautioned, however, that it will take more time for Korea’s nuclear ecosystem to recover.

“The order drought during the nuclear phaseout period led to lower utilization rates among suppliers and the loss of skilled workers,” he said. “The restart of Shin Hanul units 3 and 4 and projects such as the Czech reactor deal have put the industry on a path to recovery, but it will take some time before the industry returns to normal.”

Regarding growing expectations for SMRs, Park emphasized that the success of early projects will be critical, as SMRs are still an emerging industry and require new reactor designs, regulatory approvals, business models and supply chains.

“Doosan Enerbility aims to become an SMR foundry that supplies key components for SMRs by drawing on more than 40 years of experience in manufacturing key components for large nuclear reactors,” he said.

BY KO SUK-HYUN [[email protected]]