Korean shipbuilders are moving aggressively into the medium-speed engine-based power supply market, seizing on the deepening power shortage at data centers driven by the rapid spread of artificial intelligence (AI).

The approach involves converting marine engines for land-based power generation and supplying them to data centers. Shipbuilding companies are accelerating their expansion from a vessel-focused business structure into the power infrastructure sector.

Korean shipbuilders are moving aggressively into the medium-speed engine-based power supply market, seizing on the deepening power shortage at data centers driven by the rapid spread of artificial intelligence (AI).

The approach involves converting marine engines for land-based power generation and supplying them to data centers. Shipbuilding companies are accelerating their expansion from a vessel-focused business structure into the power infrastructure sector.

According to industry sources on April 27, HD Hyundai Heavy Industries recently signed a contract with a U.S. energy infrastructure development company to supply engine-based power generation equipment with a capacity of 684 MW, worth approximately 627.1 billion won (approximately $426 million), leading with its proprietary medium-speed engine, HiMSEN.

Hanwha Engine halted medium-speed engine production in 2016 owing to deteriorating profitability, but is now pursuing a business restart after nearly 10 years in response to growing power demand from AI data centers.

To support this, the company plans to expand its engine production capacity to 5.3 million horsepower by 2027. Orders for four-stroke gas engines for U.S. data centers are also expected to materialize as early as this year.

Hanwha Ocean, leveraging its shipbuilding capabilities, is positioned to provide floating power generation facilities and power system packaging technology for data centers.

Engine supply for data centers also carries significance in terms of expanding maintenance business. Due to their continuous operation characteristics, medium-speed engines log longer running hours and shorter parts replacement cycles compared to marine engines, generating sustained maintenance demand.

HD Hyundai Marine Solution, which handles maintenance for engines supplied by HD Hyundai Heavy Industries, sees the opportunity for long-term revenue generation beyond the initial delivery.

Samsung Heavy Industries developed a 50 MW-class floating data center model designed for offshore installation to address land scarcity and cooling water challenges.

The model is characterized by a shortened construction period compared to land-based facilities and reduced power dependency through an onboard generation system.
Samsung Heavy Industries recently unveiled the model at an exhibition held in Washington, D.C., and obtained Approval in Principle (AIP) on the concept design from the American Bureau of Shipping and Lloyd’s Register.

In this way, Korean shipbuilders are rising beyond simple marine equipment supply to become key players in the fast-growing global AI data center infrastructure market.

Global research firm MarketsandMarkets projected that the AI data center market will grow from approximately $344 billion last year to more than $2 trillion by 2032.

“As AI proliferation causes a sharp surge in power demand at data centers, stable power supply has emerged as a core competitive advantage,” an industry official said. “This will serve as an opportunity for shipbuilders’ engine and offshore design technologies to expand into the power infrastructure market.”
Source: Business Korea