2H23 Outlook
The author is an analyst for NH Investment & Securities. He can be reached at ys.jung@nhqv.com -- Ed.
The Biden administration has been emphasizing the importance of SMRs. According to the DOE report released in 2023, the US is targeting to expand its nuclear power capacity (including SMRs) by 200GW by 2050. R&D on advanced nuclear reactors is in active swing, led by private firms such as NuScale, X-energy, and Terrapower. Doosan Enerbility is seen to be cooperating with major US SMR developers (NuScale, X-energy). And, we note that (back-channel) negotiations are underway to settle an ongoing conflict between Westinghouse and the KHNP. Given that Korea is the only reliable partner of the US in nuclear power business, we believe that the domestic nuclear power industry warrants attention in 2H23 as well.
Looking at the renewable energy industry, we believe that demand for renewable energy will strengthen in the US, spurred by IRA implementation and easing supply chain disruption. The US plans to expand subsidies aimed at strengthening local renewable energy manufacturing capacity, with additional credits to be distributed once certain local content requirements are met. In this process of the US reducing its reliance upon China for renewable energy, Korean companies with plants in the US look well situated to benefit over the mid/long term.