[Report] 'Latecomer's Rebellion' Wins Over the US... LS Electric Turns the Tables on Ultra-High Voltage Transformers with HVDC

Visiting the Ultra-High Voltage Transformer Production Site at Busan Plant

On the 10th, after a 30-minute drive from Busan Station, we arrived at the LS Electric Busan Plant. Located in the Hwajeon Industrial Complex in Gangseo-gu, Busan, this factory was producing ultra-high voltage transformers, which are experiencing explosive global demand. Ultra-high voltage transformers are so sought after that they are practically sold out due to the expansion of global energy infrastructure.

Ultra-high voltage transformers are core equipment that efficiently convert and distribute electricity while ensuring the stability and reliability of power systems, often referred to as the 'heart' of the power grid. Seongryong Joo, Manufacturing Manager at LS Electric Busan Plant, said, “We export 50% of the ultra-high voltage transformers produced here overseas,” adding, “Most of them are snapped up by the United States.”

On the 10th, LS Electric workers were dismantling the insulating component called a 'Bushing' attached to the top of an ultra-high voltage transformer. The ultra-high voltage transformer, which reaches the height of a three-story apartment, is partially disassembled for easier transportation and then reassembled at the power infrastructure site. Photo by Choi Seoyoon

Ultra-High Voltage Transformer Production Site... Precise Winding Work and Vacuum Drying Process Are Key

Entering the factory required strict procedures. Workers wore dustproof suits and caps, disposable shoe covers over their shoes, and finally passed through an air shower room to blow away dust before approaching the production line. Upon entering the 30-meter-high ultra-high voltage transformer production building, the grandeur of the machinery immediately overwhelmed the senses.

At the entrance, winding work for ultra-high voltage transformer production was in full swing. Employees were precisely assembling windings by wrapping copper wires in multiple layers on vertical winding machines. The winding is a key component in transformers that converts voltage. As current flows through the winding, it creates a magnetic field that transmits electrical energy and plays a crucial role in voltage transformation. In the subsequent main assembly process, the iron core and windings are combined to complete the final assembly.

Finally, the vacuum drying process (Vapor Phase Drying, VPD) is performed to complete the transformer’s quality. The vacuum drying process removes moisture inside the transformer to minimize power loss, making it an essential step. All these processes take place over three months. “When one ultra-high voltage transformer is completed, its size reaches the height of a three-story apartment,” Manager Joo pointed out a 300-ton transformer. This transformer is scheduled for export to a solar power plant in Atlanta, Georgia, USA.

525kV Ultra-high Voltage Transformer Ready for Export to the United States. Photo by Choi Seoyoon

The Only Domestic HVDC Production Base... Differentiated Competitiveness

LS Electric entered the ultra-high voltage transformer market as a latecomer in 2010. At that time, the company was at a disadvantage compared to early market leaders in terms of technology and production scale. Seungwook Lee, Plant Manager at LS Electric Busan Plant, said, “Although we were behind competitors, we were confident that we could expand our strengths in the distribution sector to ultra-high voltage transformers.”

LS Electric’s trump card is High Voltage Direct Current (HVDC) technology. HVDC maximizes efficiency in long-distance power transmission and is especially essential for transmission linked with renewable energy. Direct current transmission reduces power loss over long distances compared to alternating current.

On the 10th, workers at LS Electric's Busan plant in Gangseo-gu, Busan, are assembling the windings and core structure of an ultra-high voltage transformer. Photo by Choi Seoyoon

In 2011, LS Electric established the first dedicated HVDC factory in Korea in Busan and currently operates the only HVDC production base in the country. It is located just a five-minute drive from the ultra-high voltage transformer factory. The company produces products combining HVDC technology with ultra-high voltage transformers, providing optimized solutions for long-distance transmission and large-scale power transfer.

The plant manager said, “Judging that HVDC demand would grow, we shifted our goal from developing 765kV transformers to 500kV pipeline transformers used in HVDC systems,” adding, “Currently, our company is the only one in Korea capable of handling HVDC systems.” Pipeline transformers are a type of ultra-high voltage transformer. Both transformers handle high voltages, but ultra-high voltage transformers mainly perform large-scale power conversion at power plants and substations, while pipeline transformers are designed to distribute or utilize power through complex pipeline systems.

Order Backlog of 2.76 Trillion KRW... Amid Soaring Demand and Shortage Phenomenon, Opportunity for LS Electric

Perspective view of the second production building for extra-high voltage transformers at LS Electric's Busan plant, scheduled for completion in October next year
[Photo by LS Electric]

To meet global demand, LS Electric is investing 160 billion KRW to expand production capacity at the Busan plant. A new factory will be built on a 13,223㎡ (4,000 pyeong) idle site next to the ultra-high voltage transformer production building. Manager Joo said, “Construction will start at the end of this month and is scheduled for completion in October next year,” adding, “We also plan to increase the number of VPD facilities from the current two to four.”

LS Electric recently strengthened its position in the transformer market by acquiring KOC Electric. KOC Electric is a small and medium-sized enterprise with the top domestic technology in shipboard transformers, a type of special power equipment. Through this acquisition, LS Electric has completed its power equipment lineup. KOC Electric plans to expand the production capacity of its Ulsan plant to 220 billion KRW by 2026. Based on this, LS Electric aims to triple its ultra-high voltage transformer production capacity to over 700 billion KRW annually by 2027.

LS Electric has secured an order backlog worth 2.76 trillion KRW due to the expansion of global power grid investments. Orders mainly come from the United States, Europe, and the Middle East. Especially in the North American market, demand for infrastructure related to semiconductors, batteries, and electric vehicles surged due to the Inflation Reduction Act (IRA). The company has secured work for the next five years through this.

The plant manager mentioned that overseas sales were below 100 billion KRW as recently as 2020, saying, “At that time, competitors occupied markets worth trillions of KRW, but we struggled to enter overseas markets due to a lack of overseas performance,” adding, “Foreign buyers required domestic performance, making it difficult to access overseas markets.”

However, as demand recently exceeded supply, a 'shortage' phenomenon occurred, changing the situation. The plant manager said, “The surge in demand created entry opportunities,” adding, “LS Electric has begun to secure overseas performance in earnest and plans to expand the overseas sales ratio to 70% by 2030.” “Based on 50 years of accumulated technology and business competitiveness, we will take the lead in the power equipment super cycle. With the spread of artificial intelligence (AI) and data centers, the importance of power infrastructure is growing, and LS Electric’s role will become even greater.”