Key points
▶ HD Hyundai Heavy Industries announced on Sept. 10 that it will invest a total of 1.0722 trillion won in a land-based power-generation engine production base and a small modular reactor (SMR) manufacturing plant.
▶ Of that amount, 833.6 billion won will be used to build a 3 GW HiMSEN engine production base on a 215,000-square-meter site in Onsan, Ulju County, Ulsan. Construction is scheduled to begin in the first quarter of 2027, with completion targeted for May 2028.
▶ The remaining 238.6 billion won will be invested in a dedicated plant for manufacturing major SMR components. The plant will be built at the Ulsan Shipyard and is scheduled for completion in the first half of 2029.
HD Hyundai Heavy Industries announced on Sept. 10 that it will invest a total of 1.0722 trillion won to establish a production base for land-based power-generation engines and build a dedicated SMR manufacturing plant. The company plans to expand its ship-engine technology into the land-based power-generation market while establishing a manufacturing base for next-generation nuclear power equipment.
The investment is being driven by demand from AI data centers. Data centers consume large amounts of electricity around the clock. As power grids struggle to meet that demand, the need for dedicated power-generation facilities is growing.
◆ 3 GW engine plant in Onsan
The 833.6 billion won investment will be used to build a HiMSEN engine production base in Onsan, Ulju County, Ulsan. The facility will have a capacity of 3 GW.
The site covers approximately 215,000 square meters. It will include a plant for assembling and test-running engines, a facility for machining crankshafts—the rotating shafts of engines—and a block-casting plant for manufacturing engine bodies. Construction will begin in the first quarter of 2027, with completion and operations scheduled for May 2028.
The HiMSEN engine is a medium-sized engine developed independently by HD Hyundai Heavy Industries. It was originally developed for ship generators but can also be used in land-based power plants. The company now offers models specifically designed for land-based power generation.
The company will also divide production responsibilities among its facilities. Its main plant in Ulsan will focus on marine engines, while the new Onsan plant and HD Hyundai Engine in Yeongam, South Jeolla Province, will handle land-based power-generation engines.
With this expansion, the company expects to secure annual land-based power-generation engine production capacity of 4 GW. Total HiMSEN engine capacity, including marine engines, is expected to increase from the current 3 GW to 7.2 GW by 2030.
◆ 238.6 billion won for an SMR plant
The remaining 238.6 billion won will be invested in a dedicated plant for manufacturing major SMR components. The facility will use a site within the Ulsan Shipyard, with completion targeted for the first half of 2029.
SMRs are nuclear reactors that generate less power than conventional reactors and have major systems assembled in modular form. Because components are manufactured at a plant and assembled on-site, construction time can be shortened. Major components refer to core nuclear equipment such as reactor vessels and steam generators.
Citing projections from the Organisation for Economic Co-operation and Development (OECD), the company expects the SMR market to grow to 150 GW by 2050. It also assessed that relatively few manufacturers have yet secured confirmed orders for the production of key equipment.
The company said the new plant will also support the development of offshore floating SMRs and SMR-powered vessels.
◆ Four years of cooperation with TerraPower
Cooperation with U.S. nuclear power developer TerraPower is not a new development.
The relationship between the two companies began in November 2022. It started with investment cooperation and expanded into the manufacturing of reactor equipment. HD Hyundai Heavy Industries won an order in December 2024 to manufacture a cylindrical reactor vessel, which is currently under production. In May this year, it was selected as the preferred negotiating party to manufacture key equipment for the reactor enclosure system (RES) of TerraPower’s sodium reactor.
Chung Ki-sun, chairman of HD Hyundai, met in Seoul on Aug. 14 with TerraPower founder Bill Gates and CEO Chris Levesque, among others. It was their fourth meeting and came seven months after their previous meeting at the World Economic Forum in Davos in January.
Sodium is the next-generation reactor technology being developed by TerraPower. It combines a sodium-cooled fast reactor (SFR) with an energy-storage system and uses liquid sodium rather than water to cool the reactor. The project is being developed as a 345 MW facility in Wyoming, United States.
◆ Orders have outpaced investment
In April this year, HD Hyundai Heavy Industries signed a 627.1 billion won contract to supply power-generation equipment to U.S.-based Aperion Energy Group. On Aug. 10, it signed a 956 billion won contract with Covanta Energy Group. The two contracts total 1.5831 trillion won, exceeding the 1.0722 trillion won investment announced this time.
The contract with Covanta Energy Group covers a 1 GW, or 1,000 MW, project. The company will supply power-generation equipment based on 9.6 MW HiMSEN engines to data centers operated by U.S. big tech companies. It is the largest power-generation engine supply contract in the company’s history.