HD Construction Equipment wins $286M data center engine deal

HD Construction Equipment secured a 387.9 billion won ($285.6 million) contract on Oct. 7, 2026 to supply natural gas power-generation engine blocks to American microgrid developer Enchanted Rock.

The transaction represents 10.27% of the manufacturer's 2025 consolidated revenue of 3.78 trillion won. It marks the largest single power-generation hardware order in the company's operating history.

Houston-based Enchanted Rock will integrate the 22-liter engine assemblies into distributed generator sets. Those systems will supply on-site electrical power to hyperscale data centers across North America.

The contract, executed Oct. 6, covers the delivery of semi-finished long blocks from Jan. 1, 2027 to Dec. 31, 2028. A long block contains the core cylinder block and rotating assembly without fuel injection or ignition modules.

Terms require an advance payment equal to 10% of the contract value. Enchanted Rock will pay the remaining 90% against milestone delivery invoices issued across the two-year shipping window.

The agreement represents the first major data center supply deal closed by HD Construction Equipment since its corporate restructuring. The entity absorbed engine maker HD Hyundai Infracore on Jan. 1, 2026 to combine machinery production with heavy engine fabrication.

That internal consolidation unified medium-speed industrial engine design with commercial supply chains. The combined corporate structure allows the South Korean industrial group to compete for utility-scale digital infrastructure orders overseas.

North American hyperscale operators face severe electrical transmission constraints as artificial intelligence server clusters expand. Regional grid connection queues now extend between three and seven years across major digital hubs in Virginia and Texas.

Data center operators install on-site natural gas generators to bypass utility connection queues, an arrangement known as bridge-to-grid power. The generators run continuously as primary power sources until regional utilities connect permanent transmission lines.

Continuous power generation imposes significantly higher mechanical loads than emergency standby operations. Generator engines must run non-stop for months, requiring strict thermal tolerances, heavy-duty bearings and optimized gas combustion chambers.

Natural gas generator installations also clear local air pollution permitting rules faster than diesel generator plants. Most American jurisdictions cap diesel operating limits at emergency run hours, preventing diesel units from operating as baseload capacity.

Enchanted Rock designs and manages natural gas microgrids that operate independently from regional power grids. The developer previously partnered with Microsoft on a 100-megawatt renewable natural gas microgrid project in San Jose, California.

The Houston firm is expanding its generator assembly hub in Cypress, Texas, scaling system integration capacity beyond one gigawatt per year. The South Korean engines will feed that assembly pipeline directly.

HD Construction Equipment will assemble the 22-liter engine long blocks at its industrial manufacturing center in Gunsan, North Jeolla Province. The company invested 116.8 billion won ($86 million) to build out the engine production hub.

Construction of the Gunsan engine plant will conclude at the end of October 2026, the company said. The facility will serve as the manufacturing base for large power-generation engines spanning one to three megawatts.

The equipment manufacturer will introduce a 37-liter engine rated at 1.5 megawatts in 2027. A larger 77-liter model generating three megawatts will enter commercial production in 2028, the company said.

Sister shipyard HD Hyundai Heavy Industries secured a 627.1 billion won ($461 million) contract in April 2026 to supply 33 natural gas HiMSEN engines to Aperion Energy Group. That order provides 684 megawatts of standalone power capacity for Texas data centers.

HD Hyundai Marine Solution signed a follow-on agreement in May 2026 to manage long-term maintenance for those Texas generator installations. The group now holds multi-tier engine commitments spanning medium-speed and high-speed generator tiers.

Surging artificial intelligence computing workloads continue to outpace utility generation growth across the United States. Research firm Dell'Oro Group estimates cumulative global capital expenditure on data center infrastructure will exceed $3 trillion by 2030.

Fortune Business Insights projects the global data center generator market will expand from $10.34 billion in 2026 to $19.72 billion by 2034. The shift toward on-site distributed generation accounts for the bulk of new equipment contracts.

The regulatory filing does not disclose the identity of the end-user technology company operating the hyperscale facilities that will receive the generators. Enchanted Rock maintains commercial non-disclosure agreements covering individual customer project locations.

Initial deliveries to Enchanted Rock will begin Jan. 1, 2027 following quality validation runs at the Gunsan production plant later this year.