Hitachi Energy on Monday 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% of the investment will be dedicated to the U.S., Hitachi Energy said. The plan includes hiring more than 100 people in the U.S. “to expand domestic key component manufacturing to strengthen local supply chain,” the company said.
Along with the U.S., the investment will also go to expand production capabilities in Europe, India and China, according to a video explainer of the announcement. 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,” the company said in a statement. “To keep pace with this accelerating demand, Hitachi Energy is expanding its commitment to scale up production and strengthen supply chains in the U.S. and worldwide.”
Electricity consumption from data centers could double to more than 9% of total U.S. generation by 2030, according to the Electric Power Research Institute.
A September report from the National Infrastructure Advisory Council found the lead time for utilities to procure new transformers has more than doubled in recent years, to 120 weeks. Electricity demand from data centers is expected to exacerbate delays, NIAC said. 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. At the same time, private companies are expanding manufacturing capabilities.
Power management company Eaton announced in February that it will invest $340 million to increase U.S. production of its three-phase transformers. Production and hiring is expected to begin in 2027 at the company’s production facility in Jonesville, South Carolina.
