South Korean energy and battery sectors face shifts from AI and U.S. policy

South Korean industries are facing a shifting energy landscape driven by the rise of artificial intelligence and changes in the American energy market. In the United States, increased security concerns regarding the power grid are creating opportunities for South Korean battery manufacturers. As the U.S. government tightens controls on Chinese-made equipment to protect national security, companies like LG Energy Solution and SK On are positioned to benefit from the growing energy storage system (ESS) market.

Simultaneously, South Korea is bracing for a massive surge in domestic electricity demand. The expansion of semiconductor manufacturing by giants such as Samsung Electronics and SK hynix, alongside the construction of AI data centers, is projected to increase power demand by 25 to 30 gigawatts. This requirement is equivalent to the capacity of approximately 20 nuclear reactors.

To address this, the South Korean government is considering a strategy that combines renewable energy with nuclear power while phasing out coal-fired power plants by 2040. Officials suggest that while renewable energy shares will expand, a temporary reliance on nuclear energy will be necessary to meet the high-capacity needs of the AI and semiconductor sectors.