Riding the AI Infrastructure Boom: Policy Support for a Second Surge in Korea’s Power Equipment Exports

The rapid spread of generative artificial intelligence (AI) has driven a surge in hyperscale data center investment, and that surge has converged with the need to replace an aging power grid in the United States. Together they are pushing up demand for power equipment: transformers, power cables, switchgear, and distribution boards. The global power equipment market is projected to expand from about USD 780 billion in 2025 to USD 1.23 trillion by 2031, growing at an average of roughly 7.9 percent a year. With supply bottlenecks at Europe’s leading manufacturers persisting, Korean firms are emerging as key players on the strength of their delivery times. Korea’s power equipment industry is led by large specialist manufacturers, among them HD Hyundai Electric, LS ELECTRIC, and Hyosung Heavy Industries, and exports of the industry’s main products grew at a compound annual rate of 23.7 percent from 2022 to 2025. In the US import market, Korea ranks first in high-voltage power cables and second in extra-high-voltage transformers, evidence of strong competitiveness in upstream power infrastructure equipment. Korea ranks only seventh, however, in power distribution boards (PDUs), a high-value-added product, which leaves diversification along the value chain as an outstanding task. Converting the industry’s current momentum into durable competitiveness will require policy support concentrated on three structural weaknesses: managing tariff risks by expanding production bases inside the United States, pushing further into the high-value-added distribution board and PDU market, and diversifying supply chains for critical raw materials.1)