"Korea Poised to Become Key Player in U.S.-Led Global Nuclear Supply Chain" [Click e-Stock]

Korea Steps Up to Address Westinghouse's Construction Shortcomings

Following a sharp decline and subsequent surge in nuclear power-related stocks, interest in the nuclear industry is growing. KB Securities has projected that Korean nuclear power companies such as Korea Electric Power Corporation (KEPCO) and Korea Hydro & Nuclear Power, in partnership with Westinghouse in the United States, will become key players in establishing a nuclear supply chain led by the U.S.

Westinghouse: A Traditional Powerhouse in U.S. Nuclear Energy

First, it is emphasized that understanding Westinghouse in the U.S. is essential for investing in the nuclear industry. Currently, there are a total of 93 nuclear reactors operating in the United States. Of these, 57 are based on technology from Westinghouse or CE, which Westinghouse acquired in 1999. When limited to PWRs (pressurized water reactors), the dominant reactor type in the market, Westinghouse holds a 92% market share in the U.S. Last month, at the Pennsylvania Energy Summit, U.S. President Donald Trump personally introduced Westinghouse as the company that will join the American nuclear renaissance.

Westinghouse has a close relationship with Korean nuclear power as well. Korea's first nuclear power plant, Kori Unit 1, was built using the Westinghouse WH60. Korea’s first standard nuclear reactor, the OPR1000, was developed based on CE’s System 80. The APR1400 is an expanded and improved version of this.

Korea Emerges as a Replacement for Insufficient Construction Capability

Westinghouse’s weakness lies in its construction capability. Since the Three Mile Island nuclear accident in Pennsylvania in 1978, it has not achieved any significant nuclear power plant construction for 40 years. Its construction workforce has decreased significantly, and higher costs have eroded its competitiveness. This is where Korea’s role becomes prominent, as it has accumulated manufacturing, execution, and management expertise by building 36 nuclear reactors both domestically and internationally.

Korea’s construction capability is also critical in the competition with China over the nuclear supply chain. Westinghouse’s current reactor model is the AP1000. Of the six AP1000 reactors operating worldwide, four are in China. Chinese companies handled much of the equipment manufacturing and most of the construction. Kang Minchang, a researcher at KB Securities, explained, "For the U.S. to realize a future nuclear renaissance, it must rebuild a U.S.-led global supply chain," adding, "This is where Korea’s role stands out."

Simultaneous Increase in Nuclear Orders Is Essential

With the possibility of a joint venture (JV) between Korea Hydro & Nuclear Power and Westinghouse being discussed, expectations are rising for the export of Korean nuclear reactors to the U.S. However, the belief that Korea’s APR1400 reactor can be easily exported to the U.S. simply because of Westinghouse’s lack of construction experience is somewhat optimistic.

Analysts point out that a clearer rationale is needed to build nuclear reactors in the U.S. using independent technology from another country. For Korean nuclear reactors to enter the U.S. market, there must be a simultaneous increase in nuclear orders within the U.S., resulting in a shortage of resources. Researcher Kang stated, "There is no need to be disappointed even if the export of Korean nuclear reactors to the U.S. does not happen immediately," adding, "Korean public enterprises under KEPCO and Korean private companies can offer a wide range of nuclear-related capabilities to the U.S.-including project management, design support, manufacturing, and construction-so continued attention should be paid to the entire Korean nuclear supply chain."