SK, HD Hyundai deepen TerraPower SMR ties with $250M nuclear push

SK Innovation signed a preliminary global agreement with TerraPower on Friday, deepening a Korean supply chain push into small modular reactors as AI-driven electricity demand accelerates.

"To lower costs and standardize SMR deployment worldwide, combining TerraPower's standardized reactor design with Korea's highly reliable mass-manufacturing supply chain is essential," Kim Jung-kwan, Korea's industry minister, said after meeting with Gates in Seoul.

SK Group became TerraPower's second-largest shareholder with a $250 million investment in 2022, while HD Hyundai invested $30 million the same year and agreed in May to supply sodium-cooled reactor vessels. Doosan Enerbility won a contract Friday to manufacture the reactor vessel, support structures, and internal components for TerraPower's Natrium project. TerraPower received a construction permit from the US Nuclear Regulatory Commission in March and targets commercial operation of its Kemmerer, Wyoming plant by 2031.

The alliance comes as TerraPower's deal with Meta this year — funding up to eight Natrium plants supplying 2.8 gigawatts of baseload power, expandable to 4 gigawatts with integrated storage — positions the company as a primary energy provider for AI infrastructure. SK Telecom's plan to build 15 gigawatts of AI data center capacity requires massive zero-carbon energy, making the nuclear partnership central to SK Group's broader AI strategy.

Korea as a nuclear foundry

Minister Kim emphasized that Korea's execution capabilities — more than 50 years of building and operating nuclear facilities — will be critical to supporting TerraPower's SMR market position. The country has established a "foundry-grade" manufacturing and construction supply chain, making it an ideal production base for standardized reactor deployment.

The agreement enables SK Innovation to partner in TerraPower's SMR project development in the US and key global markets. The high-level meeting, where Chey and Gates met again after a year, marks an evolution from venture investment into strategic alignment. SK's integrated operations spanning AI semiconductors, data centers, and energy solutions are converging with Gates' vision of deploying advanced nuclear reactors for reliable, carbon-free electricity. Financial terms of the heads of agreement were not disclosed.

HD Hyundai scales reactor vessel production

HD Hyundai Chairman Chung Ki-sun met Gates for the first time in seven months to advance cooperation on the Natrium reactor. TerraPower CEO Chris Levesque and Hyundai E&C CEO Lee Han-woo also attended, marking the first gathering of all three companies' chief executives since signing a memorandum of understanding in May.

HD Hyundai plans to accelerate investments in production facilities, targeting an annual supply capacity of two to three reactor vessels. The strategy focuses on the US, the world's largest nuclear market with approximately 95 gigawatts of generating capacity — roughly 25 percent of global output — where aging plants from the 1970s face replacement demand alongside surging AI data center electricity needs.

The competitive stakes are significant. X-Energy, a leading SMR developer, estimates the global SMR market at 158 gigawatts by 2050, worth about $2.3 trillion in revenue potential. X-Energy has secured up to $2.115 billion in DOE cost-share funding under the Advanced Reactor Demonstration Program and has binding HALEU fuel agreements with Centrus Energy and General Atomics. The company is building its Xe-100 reactor for Dow's Seadrift, Texas facility and has a 5-gigawatt partnership with Amazon through Energy Northwest in Washington State. The Natrium system's molten-salt energy storage and sodium-cooled fast reactor design differentiate it from traditional high-pressure water reactors, and Korean mass-manufacturing capabilities could lower deployment costs against competitors.

For investors, the question is whether Korean supply chain integration gives TerraPower a cost advantage in the race to capture AI data center power demand. The Meta deal alone represents 2.8 gigawatts of contracted baseload power, with initial deliveries slated to begin in 2032. As hyperscalers and utilities compete for zero-carbon electricity, the ability to deploy reactors faster and cheaper will determine which SMR developers capture the largest share of the projected $2.3 trillion market.

This article is for informational purposes only and does not constitute investment advice.