Hitachi Energy on March 10, 2025, announced a $250 million investment to expand global production of critical components for electrical transformers, including enhancing production capacity at the company’s transformer factories in Virginia, Missouri, and Mississippi.
More than 40 per cent of the investment will be dedicated to the US, as per the company, with plans to hire more than 100 people in the country to expand domestic key component manufacturing to strengthen local supply chains.
Along with the US, the investment will also go to expand production capabilities in Europe, India, and China. The new commitment adds to the recently announced $6 billion investment across the Hitachi portfolio to expand manufacturing, including $1.5 billion specifically allocated to scaling global transformer production.
As the electrification of industries, particularly data centers and AI, drives unprecedented demand for electricity, the need for transformers has surged beyond initial projections, and this expanded commitment is part of Hitachi Energy’s strategy to scale up production and strengthen supply chains in the US and worldwide.
Electricity consumption from data centers could double to more than 9 per cent of total US generation by 2030, according to the Electric Power Research Institute (EPRI). A September 2024 report from the National Infrastructure Advisory Council (NIAC) found the lead time for utilities to procure new transformers has more than doubled in recent years, to 120 weeks. Growing energy demand, workforce shortages, and a dearth of domestic production capacity are contributing factors in the shortage, say experts.
NIAC also recommended the federal government establish a “strategic virtual reserve” of electric transformers to ensure manufacturing challenges do not slow electrification efforts or necessary replacements.