Doosan Fuel Cell Analysis: Inside the Strategic Pivot to SOFC Dominance 2025

Doosan Fuel Cell SOFC Projects Signal Shift from PAFC to Data Centers 2025

In 2025, Doosan Fuel Cell executed a definitive strategic pivot from its legacy Phosphoric Acid Fuel Cell (PAFC) business to high-efficiency Solid Oxide Fuel Cell (SOFC) technology, targeting the high-growth data center and commercial power markets.

• This transition crystallized in July 2025 with the commencement of mass production at its new 50 MW SOFC factory in Jeollabuk-do, South Korea, enabled by licensed technology from Ceres Power. This contrasts with the 2021-2024 period, which was defined by large-scale PAFC deployments like the 78.96 MW Shinincheon power plant.
• A critical action reinforcing this shift was the termination of three major PAFC supply contracts in April 2025, valued at approximately $560 million. This move freed up capital and resources to focus on the SOFC business line.
• The company is now targeting energy-intensive applications, demonstrated by its November 2025 cooperation agreement with SK ecoplant and Hyosung Heavy Industries to supply hydrogen fuel cells as backup power for South Korean data centers.
• While shedding legacy contracts, Doosan secured new long-term revenue streams aligned with its new focus, including a $308 million, 20-year service agreement in September 2025 and a ₩96.4 billion power purchase agreement in November 2025.

Doosan Fuel Cell Investment Analysis: Reallocating Capital to SOFC Production

Doosan Fuel Cell’s investment strategy in 2025 reflects a disciplined reallocation of capital away from delayed legacy projects and toward building a competitive SOFC manufacturing base.

• The cornerstone investment is the new SOFC mass production facility in Jeollabuk-do, South Korea, which began operations in July 2025 with an initial annual capacity of 50 MW. This represents the company’s primary capital expenditure to support its technological pivot.
• The financial impact of this pivot was highlighted by the mutual termination of ₩818 billion (approx. $560 million) in PAFC supply contracts in April 2025. This was a strategic financial decision to stop investing resources in projects that no longer aligned with the company’s SOFC-centric future.
• Supporting this long-term vision, parent company Doosan Corp. formed a $75 million technology fund in September 2025 to invest in synergistic areas, including green energy and fuel cells, ensuring sustained innovation.
• Prior to this major shift, the 2021-2024 period saw investments focused on expanding the PAFC ecosystem and adjacent mobility applications, including a KRW 27 billion funding round for its drone unit, Doosan Mobility Innovation, in March 2022.

Table: Doosan Fuel Cell Strategic Investments (2022-2025)

Doosan Fuel Cell Partnership Strategy: Building an SOFC Ecosystem 2025

Doosan Fuel Cell’s partnerships in 2025 are explicitly designed to build a complete commercial ecosystem for its new SOFC technology, covering technology licensing, supply chain, and market access.

• The foundational partnership is the technology licensing agreement with UK-based Ceres Power, which provided the technical basis for Doosan’s 50 MW SOFC factory and its entry into the high-efficiency fuel cell market.
• To secure market penetration in its target segment, Doosan formed a strategic cooperation agreement in November 2025 with SK ecoplant and Hyosung Heavy Industries to supply SOFCs for data center backup power.
• To de-risk manufacturing, Doosan secured its supply chain with a January 2025 agreement with Alleima for essential high-value steel products required for SOFC mass production.
• This targeted 2025 partnership strategy contrasts with the 2021-2024 period, which focused on broader collaborations for its PAFC business and early-stage SOFC development for maritime use with partners like Shell and KSOE.

Table: Doosan Fuel Cell Key Strategic Partnerships (2022-2025)

Doosan Fuel Cell’s Geographic Focus: From Domestic Dominance to Global Ambition

Doosan Fuel Cell’s geographic strategy evolved from a dominant but localized position in South Korea to a broader, global-facing approach driven by its SOFC technology pivot.

• Between 2021 and 2024, the company’s activities were overwhelmingly concentrated in South Korea, where it led the stationary fuel cell market with large-scale PAFC projects such as the Shinincheon and Pohang power plants.
• The year 2025 marks a clear internationalization of its strategy. The core SOFC technology is licensed from the UK (Ceres Power), and the primary supply chain for critical components now includes European partners like Sweden-based Alleima.
• While its new SOFC factory and initial data center partnerships with SK ecoplant and Hyosung are in South Korea, the target market of AI data centers is inherently global, positioning Doosan to compete internationally against rivals like US-based Bloom Energy.
• Earlier-stage mobility and international projects, such as the March 2025 drone demonstration with So Cal Gas in the United States, serve as entry points into key overseas markets for its broader fuel cell portfolio.

Doosan Fuel Cell Technology Maturity: From Mature PAFC to Commercial-Scale SOFC

Doosan Fuel Cell’s technological portfolio has transitioned from a foundation in mature PAFC systems to a new focus on commercializing its high-efficiency SOFC platform.

• During the 2021-2024 period, Doosan’s commercial activities were based on its well-established PAFC technology, which was already at a commercial scale and deployed in major utility projects across South Korea.
• The company’s SOFC technology reached a critical validation point in March 2024 when its stack, co-developed with Hy Axiom and Ceres, became the world’s first to pass environmental testing for maritime use.
• The most significant maturity milestone occurred in July 2025 with the start of mass production at the 50 MW SOFC factory. This event moved the SOFC technology from the development and pilot phase into a commercial-scale product offering.
• The company now maintains a dual-technology portfolio, continuing to offer its latest PAFC model, the Pure Cell® M 400, while its strategic priority and future growth are tied to the successful market adoption of its new SOFC systems.

Doosan SWOT Analysis: Navigating a High-Consequence Technology Shift

The strategic pivot to SOFC technology fundamentally reshaped Doosan Fuel Cell’s competitive position, introducing new opportunities in high-growth markets while exposing it to significant execution risks.

• The company leveraged its established manufacturing expertise and strong domestic partnerships to build a new SOFC production base quickly.
• The primary opportunity is capturing demand from the power-intensive AI and data center boom, a market where SOFC’s high efficiency provides a strong value proposition.
• However, the shift is challenged by intense competition from established SOFC players and the financial pressure of managing a legacy product decline while scaling a new one.

Table: SWOT Analysis for Doosan Fuel Cell

Forward-Looking Insights: Doosan’s Future Hinges on SOFC Commercial Orders

The success of Doosan Fuel Cell’s strategic pivot now depends entirely on its ability to convert its new manufacturing capabilities and strategic partnerships into a significant backlog of commercial SOFC orders in the next 12-18 months.

• The most critical milestone to watch is the announcement of the first commercial sales from the new SOFC factory, which the company anticipates by the end of 2025. Securing a flagship customer in the data center sector is essential for market validation.
• The partnerships with SK ecoplant and Hyosung must translate from cooperation agreements into firm, large-scale purchase orders to demonstrate tangible market traction for its data center power solution.
• The company’s showcase at CES 2026 will be a key platform to attract global customers. The market will look for evidence of a clear total cost of ownership advantage and a robust product pipeline for the AI era.
• The recent long-term service and supply agreements ($308 million LTSA and ₩96.4 billion PPA) are positive indicators of a shift toward stable, service-oriented revenue models, a structure well-suited for high-value SOFC systems.

Frequently Asked Questions

What was the main reason for Doosan Fuel Cell’s strategic pivot in 2025?

Doosan pivoted from its legacy Phosphoric Acid Fuel Cell (PAFC) technology to high-efficiency Solid Oxide Fuel Cell (SOFC) technology. The goal was to target high-growth markets like power-intensive data centers, where SOFC’s efficiency offers a stronger value proposition.

Why did Doosan Fuel Cell terminate $560 million worth of contracts?

The termination of three major PAFC supply contracts was a strategic decision to realign capital and resources. This move freed up approximately $560 million to stop investing in older projects and focus entirely on building its new SOFC business line and manufacturing capabilities.

What is the significance of Doosan’s new SOFC factory?

The new SOFC factory in Jeollabuk-do, South Korea, is the central pillar of Doosan’s new strategy. Commencing mass production in July 2025 with a 50 MW capacity, it marks the transition of its SOFC technology from development to a commercial-scale product, enabling the company to compete in the market.

Who are Doosan’s key partners in its shift to SOFC technology?

Doosan’s SOFC strategy is supported by several key partnerships. The foundational partner is Ceres Power, which licensed the core SOFC technology. For market access, Doosan is collaborating with SK ecoplant and Hyosung Heavy Industries to target the data center market. Alleima is a key supply chain partner, providing advanced steel components for mass production.

What is the biggest challenge or next step for Doosan’s new strategy?

The most critical challenge and next step is to secure commercial orders for its new SOFC systems. The success of the entire pivot now hinges on the company’s ability to convert its manufacturing capacity and partnerships into a significant sales backlog, particularly by landing a flagship customer in the data center sector to validate its market entry.