Shares of major South Korean power equipment makers rose across the board after U.S. President Donald Trump signed an executive order blocking the inflow of electrical equipment from "adversary" nations to protect the national power grid. The gains reflect growing expectations that Korean manufacturers, which have built up their presence in the North American market, will benefit as Chinese hardware and software are structurally excluded from the U.S. grid supply chain.
According to the Korea Exchange, HD Hyundai Electric (267260) was trading at 801,000 won on the main board as of 9:25 a.m. on the 27th, up 9.28% from the previous session. Hyosung Heavy Industries (298040) rose 6.04% to 2.966 million won, while LS ELECTRIC (010120) gained 4.71% to 211,000 won. Outside the top 100 by market capitalization, Sanil Electric (062040) climbed 11.76% to 197,700 won. At the same time, the KOSPI was up more than 2%, with the three major power equipment makers leading related shares.
Trump signed the executive order on the 26th banning the purchase, import and installation of certain foreign-made power components used in high-voltage transmission lines, substations and power plants, according to Bloomberg and other foreign media. In the order, Trump said that "the rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production has increased reliance on abundant and reliable electricity," adding that if an attack on the bulk power system succeeds or supply is disrupted, the consequences would be devastating to national security.
The measure covers large transformers, generators, circuit breakers, battery energy storage systems (BESS) and inverters used in transmission networks of 69 kilovolts or higher and in major generation and substation facilities, as well as supervisory control and data acquisition (SCADA) software used for remote control. For equipment linked to countries deemed security risks, the order allows for enhanced security measures, network isolation and blocking of remote access, and can go as far as mandating replacement and removal. The market reads the move as an effort to shut Chinese-made components out of the U.S. power grid at the source, given that China accounts for 80% of global battery and inverter production.
Securities analysts assess the executive order as a long-term boon for Korean power equipment manufacturers. Their view is that supply chain origin and cybersecurity verification are emerging as core criteria in the U.S. procurement market, going beyond simple tariffs, which will further strengthen the pricing power of Korean companies. One securities industry official said that if demand to replace aging facilities and Chinese-made equipment picks up in earnest, Korean companies' North American order backlogs and earnings improvement are expected to accelerate further.
