HD Hyundai Energy Solution Surges on Expectations of Rising Power Demand for AI [Market Focus]

As of 10:10 a.m. on November 3, HD Hyundai Energy Solution was trading at 66,900 won on the Korea Exchange, up 17.78% from the previous day's closing price. This surge appears to be driven by strong second and third quarter results, as well as expectations that solar power orders will increase in response to rising electricity demand from artificial intelligence (AI) data centers.

Previously, on October 27, HD Hyundai Energy Solution, a company specializing in the production and supply of solar cells and modules, announced its preliminary consolidated results for the third quarter of this year: sales of 121 billion won and operating profit of 14.7 billion won. Compared to the same period last year, sales jumped by 20.3% and operating profit soared by 328.8%. Although the company posted a loss in the first quarter of this year, it has delivered strong results for two consecutive quarters in the second and third quarters.

Meanwhile, the market expects that as the construction boom for AI data centers-especially in the United States-drives a surge in various types of electricity demand, solar power orders will also increase. A testament to this is the recent large-scale solar power purchase agreement signed by Meta, the parent company of Facebook and Instagram, for nearly 1 GW (gigawatt) of capacity. One gigawatt is equivalent to the output of a nuclear power plant, enough to power approximately one million households simultaneously.

According to IT media outlets such as TechCrunch on October 31 (local time), Meta recently signed an agreement to receive power from a new 600 MW (megawatt) solar power plant being built by the North American subsidiary of French energy company ENGIE in Lubbock, Texas, with operations set to begin in 2027. Meta has also entered into a contract with another power provider, Trittioak Clean Energy, to receive 385 MW of solar power generated in Louisiana after 2027.

Unlike thermal power, which is experiencing turbine supply bottlenecks, or nuclear power, which takes a long time from order to completion, renewable energy sources such as solar and wind power, as well as fuel cell power generation, can be built within one to two years. This advantage is expected to lead to continued orders as a source of electricity for the rapidly increasing number of data centers. For HD Hyundai Energy Solution, the share of sales from the U.S. market now exceeds 35%, and the company is transitioning to a high-efficiency cell production system, which is expected to improve both sales and profitability.

Yonhap News Agency