March 10, 2025- Hitachi Energy announced an additional investment of over US$ 250 million by 2027 at CERAWeek to expand global production of crucial transformer components. This massive investment reflects the company’s commitment to tackling global transformer shortage.
Today, there is a growing demand for electricity due to electrification of industries like data centers and AI. Courtesy of this, need for transformers has surged beyond initial projects. To keep up with accelerating demand, companies like Hitachi Energy are ramping up production and strengthening global supply chains.
Transformer shortage has also driven transformer prices due to high demand and limited supply. Increasing production capacity can stabilize or reduce overall prices by helping to balance this supply and demand.
Hitachi Energy’s US$ 250 million investment will bolster its manufacturing capabilities across the United States. It will help the company to increase production capacity at its transformer factories across Missouri, Virginia, and Mississippi.
As a key supplier to other transformer manufacturers, Hitachi’s increased production of transformer components like bushings and insulation will help meet the growing demand. It will also help reduce ongoing transformer supply shortage.
In the words of Andreas Schierenbeck, CEO of Hitachi Energy “Demand for transformers and grid infrastructure is rising at an unprecedented pace. Thus, we have a responsibility to expand our capacity and accelerate the delivery of transformers and essential components”.
Increasing production of transformer components will not only help to meet growing transformer demand but will also positively impact the broader power transformer sector. According to Coherent Market Insights (CMI), the global power transformer market is set to record a CAGR of 9% through 2032.
“Rising transformer investments, such as those of Hitachi, in manufacturing, engineering, digital technology, R&D, and partnerships activities will enable companies to meet customers’ commitments and market demand, says a senior analyst at CMI.”
With rapid penetration of industrialization and increasing electrification, demand for transformers is expected to rise. This will likely create lucrative revenue generation opportunities for companies like Hitachi Energy.
The world is also witnessing a transition towards clean energy sources like solar and wind. Transformers are crucial to the clean energy transition owing to their tendency to enable efficient transmission and distribution of electricity.
Transformers are a key element in integrating renewables, powering data centers, expanding grid interconnections, electrifying transportation, and facilitating decarbonization of energy systems. Greater the adoption of clean energy sources, higher will be the demand for transformers. This highlights the significance of Hitachi’s increasing investments.
The new investment will help Hitachi to increase its market share. It is expected to provide long-term relief to the global power transformer industry, benefiting utility companies, renewable energy projects, and industrial players. Additionally, it can intensify the competition.
Sources:
Company: Hitachi, Ltd.
News Outlet: ZAWYA
