Virtual simulation and DC power infrastructure
Hyosung Heavy Industries, HD Hyundai Electric and LS ELECTRIC, three leading Korean power equipment manufacturers recording substantial exports to the North American market, are facing structural technological changes in the global market.
A next-generation data center power design solution developed through cooperation between Swiss global power solutions company Hitachi Energy and AI semiconductor leader NVIDIA is driving changes in the market.
Hitachi Energy was formed when Japan's Hitachi acquired the power grids business of Swiss global power company ABB. It is the world's leading company in the field and a competitor with a substantial lead that the three Korean companies must overcome.
As power infrastructure, traditionally centered on mechanical equipment, increasingly incorporates computer-based virtual simulation, Korean companies whose capabilities have been confined to hardware manufacturing face a new test: acquiring software expertise.
According to industry sources and foreign media reports on October 26, Hitachi Energy announced Grid-to-Rack simulation technology on October 21, local time. It uses NVIDIA's core software, which creates a three-dimensional representation of a data center matching its real-world counterpart, to verify data center power systems in advance.
The Grid-to-Rack solution recreates the entire system in a virtual computer environment, from high-voltage electricity generated at power plants to individual server racks inside a data center.
The purpose is to create a digital twin in a virtual environment before building a vast AI data center covering an area equivalent to dozens of soccer fields, allowing the stability and efficiency of power flows to be thoroughly verified in advance.
Following the announcement, Korean power equipment manufacturers face a technological change that requires them to consider compatibility with big tech companies' virtual design ecosystems, beyond supplying hardware.
The article raises the possibility that competition for orders, previously centered on hardware, could shift toward compatibility with virtual simulation.
AI servers, which consume enormous amounts of electricity, operate only on direct current (DC) power, in which current flows in a constant direction. Converting electricity supplied by power plants into DC causes severe power losses and heat generation.
The core infrastructure Hitachi seeks to establish in virtual space is a DC power network designed to reduce these losses.
The company has secured simulation verification technology for a high-voltage 800V DC power network optimized for high-performance AI server computing.
Although power equipment shortages are expected to sustain Korean companies' order momentum for now, global big tech companies and major data center operators, the ultimate customers, are expected to gradually tighten bidding requirements based on virtual simulation over the medium to long term.
Industry observers say Korean suppliers face a significant risk of exclusion from prequalification for next-generation, high-value DC projects if they cannot demonstrate the compatibility of their component data within virtual designs.
Korean suppliers' technology development and potential projects
However, the three Korean companies are accelerating efforts to develop technologies internally and build alliances in response to changes in virtual design compatibility and DC power network standards led by global big tech companies.
In November 2025, LS ELECTRIC officially announced a proof of concept (PoC) to apply NVIDIA's Omniverse platform to its factory operating systems.
In July 2026, it began joint development for the demonstration and standardization of 800V DC power infrastructure targeting NVIDIA's next-generation semiconductor platform environment, giving concrete form to its power infrastructure partnerships with technology companies.
HD Hyundai Electric also began building a dedicated platform for designing and digitizing electrical equipment in virtual space in the second half of 2024.
Hyosung Heavy Industries has been pursuing a project to advance virtual digital models, or digital twins, of DC transmission technology since July 2026.
Drawing on their respective virtualization capabilities, the companies are identifying specifications for standardized virtual component data and expanding their field demonstration experience.
The competitive landscape of the global AI data center infrastructure market is changing rapidly.
The article describes a shift beyond manufacturing competition focused on supplying equipment quickly and economically, toward competition between ecosystems in which suppliers must demonstrate full interoperability with design environments led by big tech companies.
This shift is being driven by rapidly rising electricity demand and the limits of physical infrastructure.
According to Hitachi Energy, global data center electricity demand rose 17% year on year in 2025, while consumption at AI-dedicated facilities is placing pressure on the overall power grid.
At the Grid-to-Rack solution launch on October 21, local time, Marco Berardi, a global head at Hitachi Energy, said the emergence of AI factories had made power infrastructure planning unprecedentedly complex.
Berardi explained that simulation to compare design alternatives and assess resilience in a virtual environment is essential before actual equipment is installed.
The next-generation power solution based on virtual simulation proposed by Hitachi Energy and NVIDIA is expected to compete for orders with Korean companies in large AI infrastructure markets in Korea and abroad.
The 900MW Ulsan infrastructure project and 5GW infrastructure project based on a cluster in the Yeongnam region, pursued by SK Hyper, the AI data center subsidiary established by SK Telecom in July 2026, are cited as potential major areas of competition.
SK Hyper is at an early planning stage, having completed incorporation and secured sites, and is preparing its first external fundraising ahead of full-scale procurement.
Specific power equipment bidding has not begun, nor has any company's participation been officially confirmed. However, industry observers expect Korean companies to pursue orders on the strength of their hardware manufacturing capabilities and supply records once procurement plans become clearer.
The article raises the possibility that NVIDIA and Hitachi could respond by proposing a digital twin platform that integrates and verifies AI chip (GPU) operating data and power infrastructure models in real time within a virtual environment. This could be an indirect effort to establish virtual verification of the entire data center power network as a market standard from the initial design stage.
Industry observers say that if the platform becomes established as a standard, customers would be likely to limit bidding eligibility to products that have passed advance interoperability verification in a virtual environment, seeking to prevent large losses caused by design errors.
A Korean power equipment industry representative said: “If the big tech alliance's virtual verification model becomes a market standard, customers are likely to restrict bidding opportunities to products that have passed that verification in order to avoid design-error risks.”
The representative added: “This could mean that power specifications from companies such as Hitachi Energy are fixed as defaults from the initial design stage, determining the overall framework. If Korean suppliers cannot enter that ecosystem, they could face barriers at the initial qualification stage and lose their ability to compete for orders.”
Concerns over standards and market access around 2029
Given that large AI infrastructure projects generally take about three years from design through construction and grid connection, SK Hyper's Ulsan and Yeongnam infrastructure projects are expected to reach completion around 2029.
Global market research organizations including McKinsey identify around 2029 as the point at which rapidly rising AI data center power consumption could reach a threshold beyond the capacity of existing power grids.
Industry observers expect big tech companies to use that timing to roll out next-generation DC specifications that minimize energy losses, together with virtual simulation platforms to verify them, as mandatory standards at sites worldwide.
The concern is what could happen if a structure becomes entrenched in which the big tech alliance, using virtual design platforms, accumulates data centers' virtual design information and real-time power operating data worldwide.
Concerns have been raised that if Korean companies fail to obtain compatibility certification within these virtual environments, companies such as Hitachi Energy could gain exclusive access to operational data and control the market for next-generation equipment design and operations and maintenance (O&M), even in SK Hyper projects in Korea's home market.
Original Korean article: newsfreezone.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
