HD Hyundai Heavy Industries says it will invest a total of KRW 1.0722 trillion to build a new power generation engine plant and a dedicated facility for small modular reactor equipment, both in the south-east of South Korea. The stated reason is demand for electricity from artificial intelligence data centres.

The larger share, KRW 833.6 billion, goes to a new three-gigawatt production facility for the company's HiMSEN engines at Onsan in Ulsan. The company says the complex will span about 215,000 square metres and house engine assembly and testing, crankshaft machining and block casting. Construction is scheduled to begin in the first quarter of next year, with completion targeted for May 2028.

The gap between an order book and a press release

The point of the investment, on the company's account, is a shift into land-based power generation. HD Hyundai already builds marine engines, and it says the expansion will lift its combined marine and land-based HiMSEN capacity from three gigawatts to 7.2 gigawatts by 2030. The remaining KRW 238.6 billion goes to a facility for key SMR components at its Ulsan shipyard, targeted for completion in the first half of 2029. Small modular reactors are built from factory-made parts, and the company notes an OECD projection of a global market reaching 150 gigawatts by 2050.

The demand case is real but forward-looking, and the company leans on it. This year it signed power generation equipment supply contracts in the United States, with Aperion Energy Group and Corban Energy Group, that it values at KRW 627.1 billion and KRW 956.0 billion. Those are contract values, not revenue recognised, and the engine and reactor facilities will not produce anything until the end of the decade.

The bet is that the power needs of AI data centres outlast the current construction cycle. Whether they do is what the trillion won is underwriting.