Hyosung Heavy Industries to complete dedicated HVDC transformer factory at Changwon by July next year

"The new HVDC factory will maintain a thoroughly controlled environment — like a desert."

Choi Young-sang, head of the ultra-high-voltage transformer global specification design team at Hyosung Heavy Industries, made the remark Sept. 16 at the construction site of the new HVDC transformer factory at the company's Changwon plant. Workers were busy driving foundation piles into the ground during the visit.

The new facility will be a dedicated HVDC transformer factory built on the Plant 3 site — a new plot of land separate from Plants 1 and 2, which produce the company's core transformers and circuit breakers. "Foundation work is about 70 percent complete," Choi said. "A first-phase scale-up last June raised production capacity by 20 percent, and once the HVDC factory is finished, capacity will be 1.5 times what it was in 2024."

HVDC transformers are next-generation power devices suited for long-distance, large-capacity, high-efficiency transmission. While conventional transformers transmit alternating current as-is, HVDC systems convert it to direct current, cutting energy losses by up to 50 percent. That advantage has made them a key component for AI data centers, which require massive amounts of power around the clock.

To meet that demand, Hyosung Heavy Industries broke ground on the new HVDC transformer factory last year, investing 254 billion won ($188 million), with a target completion date of July next year. Most of the factory's output has already been committed under supply contracts, including 500-kilovolt HVDC transformers destined for large-scale grid projects such as the West Coast energy highway.

The production environment at the new factory will also surpass that of existing facilities. Because transformers are sensitive to moisture, strict temperature and humidity control is essential throughout the manufacturing process, and the new plant will apply the latest technology to manage those conditions even more rigorously. "The existing factory keeps humidity below 40 percent, but the new one will bring it down to 10 percent — creating a clean-room environment on par with a semiconductor fab," Choi said.

A visit to Plant 2 offered a close look at skilled workers assembling transformers. The process is well known for its reliance on experienced hands, as each unit must be precisely calibrated to the voltage and capacity specifications of the customer's order.

Workers on the floor were stacking electrical steel sheets — each about 0.3 millimeters thick, roughly the width of a human hair — one by one. Up to 3,300 sheets are layered to form a cylindrical iron core, the structural backbone of the transformer. Copper windings are then wrapped around the core, and after moisture removal and a series of tests, a finished transformer emerges.

"We began proactively training skilled workers three years ago, when we first planned the new HVDC factory," Choi said. "Of the roughly 200 skilled workers in total, about 30 are slated to be assigned to the new factory."

The United States drives transformer earnings, with exports of large-capacity 765-kilovolt products leading the way. As of the first half of this year, the US and Americas accounted for 57 percent of Hyosung Heavy Industries' total order backlog of 17.51 trillion won. Orders have accelerated further this year, with the US share of new orders added in the first half climbing to 63 percent. Also in production at the Changwon plant during the visit were 400- to 420-kilovolt transformers bound for Qatar, the United Kingdom and Finland, all of which are replacing aging power grids.

Orders for circuit breakers — another core product line for Hyosung Heavy Industries — are also rising alongside transformer demand. Circuit breakers serve as downstream protective equipment for transformers, meaning exports of the devices tend to follow transformer shipments in sequence. Last year the company invested 100 billion won to build a dedicated automated production factory for export-grade ultra-high-voltage circuit breakers.

Europe is the center of circuit breaker earnings. The region is tightening eco-friendly regulations on the devices, with a full ban on circuit breakers using sulfur hexafluoride (SF6) gas set to take effect in 2028. Performance testing of new eco-friendly circuit breakers was underway at the circuit breaker factory during the visit. Having already completed development of a 145-kilovolt eco-friendly circuit breaker in April, Hyosung Heavy Industries plans to finish development of 300-kilovolt and 420-kilovolt models in sequence before year-end, bringing the total to three models.

"In Europe, we will expand our foothold in advanced markets by focusing on eco-friendly products," a team leader said. "In key markets such as the United States, we will strengthen local production and partnerships, while also leveraging the competitiveness of our factory in Pune, India, to extend our reach into emerging markets."

Hyosung Heavy Industries plans to expand its portfolio beyond power equipment into a broader range of components and systems. "We will grow from a traditional power equipment manufacturer into a total grid solutions company encompassing HVDC, STATCOM (power stabilization solutions), ESS (energy storage systems) and ARMOUR+ (power asset management solutions)," Choi said.

"In particular, our goal is to go beyond supplying HVDC transformers and become an integrated HVDC system provider — covering converter valves, control and protection systems, engineering, and testing and verification capabilities — and to break into the global top 3 by 2035," he added.