Shares of HD Hyundai Electric (267260.KS) surged nearly 9% after the company secured LG CNS as a partner. The two companies agreed to cooperate in artificial intelligence data centers and smart manufacturing. Investors are betting the tie-up will widen HD Hyundai Electric's business reach by combining its power equipment development and manufacturing capabilities with LG CNS's expertise in designing and operating data centers.
HD Hyundai Electric traded at 530,000 won, up 8.83% from the previous session, as of 10:22 a.m. on the 16th, according to the Korea Exchange. The gain far outpaced the KOSPI, which rose 2.81% to 5,710.04. The stock posted the biggest advance among the 50 largest companies by market capitalization on the main board.
HD Hyundai Electric recently agreed with LG CNS to work together on data center power infrastructure and smart factory projects. The main goal is to tap the market for AI data center power infrastructure. Pairing HD Hyundai Electric's power equipment and power distribution technology with LG CNS's capabilities in data center design, construction and operation would strengthen the companies' position in the rapidly expanding AI data center market. The two plan to build a system for supplying power and distribution equipment to AI data centers as a package, and to jointly pitch projects and market their offerings at home and abroad.
In smart manufacturing, the companies will push to improve production efficiency. Field data provided by HD Hyundai Electric will be applied to LG CNS's logistics and process automation technology. They will first raise automation rates in production and logistics in South Korea and build an integrated equipment monitoring system, then expand to overseas production bases including the U.S. as part of a push into global markets.
Shares of South Korean power equipment makers have climbed sharply this year. Rising demand from AI data centers and grid replacement projects in the U.S. have driven the gains. As aging power grids in the U.S. reach the end of their service life, demand is growing for transformers and other power equipment. "The buildout of AI data centers is coinciding with grid replacement work in the U.S., and that is bringing a boom to South Korea's power equipment industry," a securities industry official said. "If the company keeps its earnings momentum going after securing a partner, the stock could gain further traction."
