Hitachi Energy invests $250M to tackle transformer shortage
To keep pace with the surge in demand for transformers, Hitachi Energy has pledged to scale up production of critical components and strengthen supply chains in the US and worldwide.
Hitachi Energy has announced additional major investments of more than USD 250 million by 2027 to expand global production of critical components for transformers. This rapid follow-up to the recently announced USD 6 billion investment across the company portfolio reflects the escalating transformer shortage, which continues to increase.
As the electrification of industries, particularly data centers and AI, drives unprecedented demand for electricity, the need for transformers has surged beyond initial projections. To keep pace with this accelerating demand, Hitachi Energy is expanding its commitment to scale up production and strengthen supply chains in the US and worldwide, the company said in a media release.
“These investments bolster Hitachi Energy’s manufacturing capabilities across the U.S., enhancing production capacity at the company’s transformer factories in Virginia, Missouri, and Mississippi,” Hitachi Energy said. “It includes transformer components such as bushings and insulation as Hitachi Energy is a critical supplier to other transformer manufacturers.”
This move will also help alleviate the broader, ongoing transformer supply shortage, ensuring increased production capacity and supply-chain resilience, Hitachi Energy said. The global investment program also strengthens Hitachi Energy’s manufacturing capabilities in Asia, South America and Europe.
“The demand for transformers and grid infrastructure is rising at an unprecedented scale and pace,” said Andreas Schierenbeck, CEO of Hitachi Energy. “As the world’s largest transformer manufacturer, we have a responsibility to expand our capacity and accelerate the delivery of transformers and essential components, helping the industry scale up faster and advance critical infrastructure projects.”
Transformer investments are part of a broader, multi-billion-dollar investment plan that Hitachi Energy is deploying across its manufacturing, engineering, digital, R&D and partnership activities, according to the media release.
Transformers are vital to the clean energy transition and enable the efficient transmission and distribution of electricity. They are a key element in integrating renewables, expanding grid interconnections, powering data centers, electrifying transportation and facilitating the decarbonization of energy systems.