# HD Hyundai Heavy commits 1.07 trillion won to power engines *The South Korean shipbuilder will construct a 3-gigawatt onshore engine plant and an SMR component line in Ulsan to supply artificial intelligence data centers and utility grids.* **Published:** September 10, 2026 **By:** Hyun-jung Lee **Section:** Shipbuilding & Defense — South Korea **Format:** Breaking **Confidence:** medium **Source:** https://eastasiabrief.com/shipbuilding/hd-hyundai-heavy-commits-1-07-trillion-won-power-234 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - HD Hyundai Heavy commits 1.0722 trillion won ($799 million) to build onshore engine and SMR plants - Onsan engine plant adds 3 gigawatts of capacity to reach 7.2 gigawatts group total by 2030 - SMR project investment runs Oct. 1, 2026 through April 30, 2029 with engine operations slated for May 2028 ![Two engineers in hard hats review plans overlooking an expansive waterfront shipyard and industrial construction site. (AI-generated image)](https://eastasiabrief.com/media/2026-09-10-3de58568607f.webp) *Two engineers in hard hats review plans overlooking an expansive waterfront shipyard and industrial construction site. (AI-generated image)* HD Hyundai Heavy Industries committed 1.0722 trillion won ($799 million) on Sept. 10 to construct dedicated manufacturing plants for onshore power generation engines and small modular reactors. The capital expenditure marks the largest non-marine production expansion in the history of the South Korean shipbuilder. Both manufacturing complexes will stand in Ulsan, the industrial port city hosting the company's primary shipyards. The commitment represents 11.47% of HD Hyundai Heavy Industries' equity capital as of Dec. 31, according to regulatory filings submitted to the Financial Supervisory Service. The larger project allocates 833.6 billion won ($622 million), or 8.92% of equity capital, to establish a dedicated production complex for proprietary HiMSEN power generation engines. The engine complex will occupy approximately 215,000 square meters in the Onsan industrial district of Ulju County, Ulsan. It will house engine assembly, testing, crankshaft machining and engine block casting facilities. The Onsan complex will add 3 gigawatts of annual production capacity for medium-speed reciprocating engines, the company said in a regulatory filing. That addition will bring group onshore power engine capacity to 4 gigawatts. HD Hyundai Heavy Industries aims to use the facility to separate industrial power generation from commercial shipyard assembly. Marine engine assembly will remain concentrated at the existing engine shop inside the Ulsan shipyard. Onshore power equipment manufacturing will shift entirely to the new Onsan site and affiliate HD Hyundai Engine in Yeongam, South Jeolla Province. Total HiMSEN production will expand from 3 gigawatts today to 7.2 gigawatts by 2030. The shipbuilder developed the HiMSEN engine in August 2000 for marine propulsion and auxiliary electricity generation. The platform has since supplied stationary backup generators for nuclear stations and decentralized microgrids. Surging power demand from artificial intelligence computing clusters is driving the manufacturing expansion. Data center operators require dedicated onsite generator sets to protect servers from municipal power cuts and voltage fluctuations. International Energy Agency data projects global data center electricity consumption will reach 945 terawatt-hours in 2030, more than double 2024 consumption. Reciprocating engines provide rapid backup when primary utility feeds fail. The second filing commits 238.6 billion won ($178 million) to establish a dedicated fabrication plant for small modular reactor equipment. The capital outlay equals 2.55% of the shipbuilder's equity capital. The nuclear production plant will stand within the grounds of the main Ulsan shipyard. It will manufacture primary equipment — the core pressure vessels and coolant modules that house nuclear reactions. Small modular reactors, known as SMRs, generate up to 300 megawatts of electricity per unit using factory-built components. Industrial operators value the design for reliable, carbon-free power at industrial complexes. The OECD Nuclear Energy Agency projects the global SMR market will expand to 150 gigawatts of cumulative capacity by 2050. Shipbuilders hold heavy metal forging and pressure vessel welding tools suited to fabricating reactor shells. HD Hyundai Heavy Industries has sought commercial entry into nuclear manufacturing through partnerships with Western reactor developers. The company was named preferred bidder in May to manufacture primary equipment for TerraPower. TerraPower, a United States advanced nuclear developer, is building the Natrium sodium-cooled fast reactor demonstration project in Kemmerer, Wyoming. HD Hyundai holds an equity investment in the American company. The investment calendar begins in the third quarter of 2026 for both manufacturing sites. The investment window for the SMR equipment plant runs from Oct. 1, 2026 through April 30, 2029. Groundbreaking for the Onsan engine complex is scheduled for the first quarter of 2027, according to project disclosures. The shipbuilder plans to finish construction and begin commercial operation on May 31, 2028. Completion of the Ulsan SMR plant is targeted for the first half of 2029, following equipment installation and cleanroom certification. Full primary component fabrication runs will start later that year. The regulatory disclosures do not specify contract values or confirmed off-take agreements with data center operators, and the company has not published an exact groundbreaking day for the Onsan site. Shipyard order books in South Korea remain booked through 2028 on commercial vessels, providing operational cash flow to fund energy machinery expansions. The board approved both funding measures in Seoul on Sept. 10. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Onshore power engine and SMR capex | HD Hyundai Heavy splits shipyard engine production, expanding land-based capacity to 4 GW | CSSC faces South Korean competition in dual-use export power generation engines | Mitsubishi Heavy Industries contends with South Korean entry into commercial SMR primary equipment forging | AI data center operators secure a new heavy manufacturing channel for emergency backup generators | ## In this story - **Companies:** HD Hyundai Heavy Industries - **Tickers:** 329180.KS - **Exposed:** HD Hyundai, TerraPower - **Policy:** Economic Security, Subsidies - **Impact:** Capex, Supply Chain, Order Book ## Primary sources 1. einfomax.co.kr 2. businesspost.co.kr 3. specialtimes.co.kr 4. digitaltoday.co.kr 5. mt.co.kr --- Cite as: East Asia Brief, "HD Hyundai Heavy commits 1.07 trillion won to power engines," September 10, 2026. https://eastasiabrief.com/shipbuilding/hd-hyundai-heavy-commits-1-07-trillion-won-power-234