Domestic ship engine manufacturers are expanding their power engine business as a next-generation growth axis. This is based on the judgment that various sectors, including industrial power generation and emergency power generation for nuclear and gas turbine plants centered on power demand for artificial intelligence (AI) data centers, could be utilized, supporting growth after the shipbuilding supercycle.
According to industry sources on the 15th, HD Hyundai Heavy Industries has received supply inquiries for power engines related to data centers that exceed the company's initial forecast of 3-9 gigawatts (GW). It is reported that global energy companies have continued to extend warm welcomes even after announcing a 956 billion won power equipment supply contract with Koban Energy Group on the 10th of last month. In particular, 40% of new inquiries relate to demand for FDC (floating data centers) and Power Ships, which require large-scale power engines in the range of 9-20 megawatts (MW).
The HiMSEN engine, a four-stroke medium-speed engine independently developed by HD Hyundai Heavy Industries, was originally designed for ships but is highly regarded for its high output and efficiency, as well as its ability to operate continuously 24 hours a day, making it suitable for land-based power generation. Installing multiple units in parallel allows power capacity to be expanded in line with data center expansion.
Expectations regarding the potential use of four-stroke medium-speed engines for data centers are spreading not only domestically but globally. Market leaders Wärtsilä from Finland and Everence from Germany have decided on a total expansion of 4.5 GW this year. Among engine companies worldwide, only these two firms and HD Hyundai Heavy Industries currently have the capability to produce 20 MW-class power engines.
In response, HD Hyundai Heavy Industries announced it will invest 833.6 billion won to build a new HiMSEN engine production base with a capacity of 3 GW in Onsan-eup, Ulju-gun, Ulsan. Construction is scheduled to begin in the first quarter of next year, with completion expected by May 2028, followed by full-scale operations. HD Hyundai Engine plans to complete supplementary investments by June 2027 and establish a production system for 1 GW of land-based power engines. As a result, HD Hyundai's land-based power engine production capacity will expand from the current approximately 0.7 GW to 4 GW. The existing HD Hyundai Heavy Industries Ulsan main plant will focus on producing HiMSEN engines for ships, while the new plant and HD Hyundai Engine in Yeongam, South Jeolla Province, will specialize in producing HiMSEN engines for land-based power generation.
The market believes that even after the completion of this new factory, available land remains, allowing for additional capacity expansion depending on demand. In addition, considering the current order price per unit for four-stroke medium-speed engines, it is expected to generate approximately 1 trillion won in sales per GW.
Another domestic ship engine company, Hanwha Engine, is also increasingly likely to enter the power engine market for data centers. In fact, Hanwha Engine recently completed a dedicated production plant in Changwon, Gyeongnam, to expand its four-stroke medium-speed engine business. STX Engine also signed a memorandum of understanding last month with AI company Dinothia to build a defense industry AI data center in Changwon, Gyeongnam.
An industry official stated, "In the context of a rapid increase in global AI data centers, delays in grid access and constraints on gas turbine supply are expected to continue until 2030, increasing the value of medium-speed power engines with relatively short lead times." The official added, "As a supplier-favorable environment continues, price competitiveness will gradually improve."
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