HD Hyundai's engine orders top W6tr this year, cementing future growth

Engines are fast becoming the core growth driver for HD Hyundai, as HD Hyundai Heavy Industries and HD Hyundai Marine Engine together surpassed 6 trillion won ($4.54 billion) in new orders this year. HD Construction Equipment, which operates an excavator business, also secured an engine contract worth hundreds of billions of won. The surge in orders reflects both a boom in the traditional shipbuilding market and the growing role of engines as power sources for data centers.

According to industry sources Wednesday, the combined new engine orders placed with HD Hyundai Heavy Industries and HD Hyundai Marine Engine reached approximately 6.4 trillion won through last month on a cumulative basis.

HD Hyundai Heavy Industries led the way with new orders of $4.14 billion, well ahead of its annual target of $2.68 billion and up 21.2 percent from last year's total of $3.42 billion. HD Hyundai Marine Engine booked 870 billion won in new orders, an 18.4 percent increase from 734.7 billion won for all of last year.

HD Construction Equipment also posted a notable engine order. Earlier this month, it signed a 390 billion won contract to supply gas power generation engine long-blocks to Iroc, a US power infrastructure solutions company. Iroc plans to use the engine long-blocks to build generator set solutions that supply electricity to data centers in the United States. HD Construction Equipment also signed a contract with Hyundai Rotem in January to supply engines for K2 tanks destined for Poland.

The order momentum is being driven by growing demand for engines as power sources for large-scale AI infrastructure. HD Hyundai's flagship engine brand, Himsengine, can operate around the clock thanks to its high output and efficiency. Those strengths have earned it recognition beyond its traditional shipboard applications, with the data center market now emerging as a key new front.

As a result, HD Hyundai Heavy Industries signed a contract in August to supply Himsengine-based power generation equipment worth 956 billion won to a US big-tech company's data center. Buoyed by that large-scale deal, the company's engine order backlog climbed to $8.78 billion as of the end of last month, up 31.4 percent from $6.68 billion at the end of last year.

A boom in the traditional shipbuilding market has also contributed to the order run. As demand for oil tankers and other vessels rose in the wake of the Middle East war, more customers began inquiring about ship engines. Even China, the world's top shipbuilder, has come to rely on Korean ship engines due to its own technological limitations. Of the 19 new contracts HD Hyundai Marine Engine signed between January and September, 14 — well over half — were for Chinese customers. This month, the company also signed a 26.8 billion won ship engine supply contract with a Chinese shipbuilder.

HD Hyundai's engine order streak is expected to continue, driven by an explosion in power demand as the AI data center market expands. The International Energy Agency projects global data center electricity consumption will more than double, from 415 terawatt-hours in 2024 to 945 TWh by 2030. Although calls for a slowdown in AI development have recently grown louder, industry observers expect big-tech companies to sustain long-term data center investment to secure market leadership.

HD Hyundai is investing to capture additional orders. HD Hyundai Heavy Industries plans to invest 833.6 billion won to build a Himsengine production base with an annual capacity of 3 GW, which will include engine assembly and test-run facilities as well as a crankshaft machining plant. HD Hyundai Marine Engine is investing 65.3 billion won to optimize its production facilities. HD Construction Equipment plans to build out a production system for ultra-large power generation engines in the 1 to 3 MW class, centered on its new Gunsan engine factory, which is set to be completed as early as the end of this month.