South Korea-US-Japan nuclear and energy cooperation

Discussions regarding nuclear cooperation between South Korea and the United States initially focused on large-scale energy infrastructure. Reports indicated potential plans to construct up to eight large-scale nuclear reactors in the U.S., supported by a proposed $120 billion allocation from a strategic investment fund. This prospect led to significant stock price increases for South Korean engineering and construction firms, though the South Korean Ministry of Trade, Industry and Energy noted that specific details regarding site selection and timelines remained unfinalized.

Nuclear cooperation subsequently expanded into a trilateral framework involving South Korea, Japan, and the United States. This broader cooperation focuses on small modular reactors to enhance energy security and meet climate goals while reducing reliance on fossil fuels and vendors from China and Russia. Additionally, the scope of nuclear technology discussions has extended to maritime security, with South Korea considering the development of nuclear-powered submarines to enhance underwater endurance and counter regional threats.

Recent market activity reflects growing investor expectations surrounding a potential $350 billion investment framework between South Korea and the U.S. Beyond nuclear projects, discussions include the construction of the Encinall gas-fired combined cycle power plant in Texas, valued at approximately $22.3 billion. The KRX Construction Index rose 10.28% over a recent week, as analysts suggest South Korean companies like KEPCO E&C, DL E&C, Samsung E&A, Daewoo E&C, and Hyundai E&C may lead the supply chain. However, experts emphasize that future performance will depend on whether these firms act as lead or non-lead EPC partners.