On an evening walk, I once looked up at the gray cylinder perched on top of a utility pole — the thing that gives off a low hum when you stand near it. I had passed beneath it for decades, and only in writing this manuscript did I properly learn that it is a transformer. The AI semiconductors of the last journey drink enormous amounts of electricity just by being switched on. The claim that a single data center eats as much power as a city is no exaggeration. So the real worry in Silicon Valley these days is not how to get more chips, but where to draw the electricity to run them. This journey traces the chain of that electricity.
Electricity is made at power plants and travels all the way to the city. To send it that far without loss, you need enormous devices that raise the voltage and lower it again. Transformers. The ones called ultra-high-voltage transformers, in particular, are heart-like components that hold a nation's grid together. And right now, value is pooling with frightening speed at the place where they are made.
The Bottleneck Is in the Aging Grid
Two reasons overlapped. One is that America's grid has grown old. Transformers laid down decades ago are reaching the end of their lives, just as AI data centers multiply explosively and electricity demand soars. The old ones must be replaced and new ones must be built, and an ultra-high-voltage transformer is not something anyone can knock together in a few months. Place an order and you wait years — a stubborn bottleneck. How many things are left in this world that you order and then wait years to receive? I thought about it for a moment, and nothing came readily to mind.
Standing in front of that bottleneck are three Korean companies. HD Hyundai Electric, Hyosung Heavy Industries, LS Electric. For a long time they were supporting actors, delivering at whatever price the utilities named. Then transformers became scarce, and the relationship flipped. Now it is the makers who name the price.
| The three power equipment makers | Status |
|---|
| Combined order backlog (Q1 2026) | about 32 trillion won (since topping 35 trillion) |
| Hyosung Heavy Industries | ultra-high-voltage transformer plant in Memphis (the only 765 kV-class plant in the US) |
| LS Electric | 459.8 billion won order from a US utility |
The Moment the Price Moved to the Makers
The story of this chain runs in the opposite direction from the ones before it. In cosmetics, the hands that make (the factories) lost the price, and the side that sells (the brands) took hold of it. On the grid, it is exactly reversed. The making hands became so scarce that the power to name the price passed from the buyers (American utilities) to the makers (the transformer companies). Korea's power equipment companies, so long the underdogs, became the boss — standing before the grid of the most powerful nation on earth. The work in the three companies' hands now exceeds 32 trillion won, and they are even building factories on American soil.
Here the thesis of Part 3 is confirmed once more. Value pools at the narrowest link of the chain, the link no one else can take over. Semiconductor assembly was not the only place where artificial intelligence made value pool. On the road of the electricity that must feed those chips, value pooled just the same — in an old, enormous piece of equipment called the ultra-high-voltage transformer. "After semiconductors, power" — in the language of chains, this is how the saying reads.
The People Who Don't Leave
| Company | Employees | Average pay | Average tenure | Revenue per employee | Operating profit per employee |
|---|
| HD Hyundai Electric | 2,209 | 131 million won | 6.4 years | about 1.85 billion won | about 450 million won |
| Hyosung Heavy Industries | 3,567 | about 86.7 million won | 13.1 years | about 1.67 billion won | about 210 million won |
| LS Electric | 3,482 | about 95.3 million won | 16.0 years | about 1.43 billion won | about 120 million won |
Based on FY2025 disclosures. Per-employee values are rough figures: consolidated results divided by parent-company headcount. HD Hyundai Electric's pay reflects boom-year bonuses, and its short tenure traces to the 2017 spin-off. Hyosung Heavy Industries' revenue includes its construction division.
These are the numbers from the year the underdog became the boss. One HD Hyundai Electric employee produced 450 million won of operating profit in a year, and average pay passed 130 million won — there were even reports that it had overtaken Hyundai Motor. Who, a few years ago, would have imagined the day a transformer maker's paycheck passed a carmaker's? At Hanmi Semiconductor in the last chapter, the value pooled in the company while the pay envelopes stood off to the side; here the order is different. The supercycle arrives at the pay envelope before it arrives at the company. Still, set the modest numbers of LS Electric, where people have stayed sixteen years, beside the hot numbers of a company whose tenure is 6.4 — and a boom begins to look like a guest who calls on each house in turn.
But look inside a place called a power plant, and you learn that raising the thing and running the thing are entirely different stories. Laying the transformers and building the plant is not the end. Keeping that vast machinery turning without a single moment's pause is the work of yet other people. The next journey goes to those invisible people.
This piece is part of the "Korea Value Chain" series and is an original work. It is an analysis based on public data and industry sources; some figures and assessments are estimates. It is not intended as a direct basis for investment decisions.
By Alexandro Lee · July 2026
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