Strong Electrical Transformer Demand Drives U.S. Manufacturing Projects

---

Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

---

Summary

U.S. demand for power transformers has increased dramatically over the past few years, paving the way for construction investment by transformer manufacturers.

---

Growing Demand

The U.S. power infrastructure footprint is experiencing some drastic changes as data centers come online, electric vehicle charging grows slowly but surely, and new generation facilities come online. As part of the resulting buildout, electrical transformers are very much an in-demand item, needed to step voltage up or down at various points from transmission to final delivery. A 2025 report from Wood Mackenzie stated that U.S. demand for power and generation transformers was up 116% and 274%, respectively, from 2019 to 2025. The same report pegs demand growth for distribution transformers as between 30% and 80%, depending on specification.

No matter how you slice it, electrical transformers are big business in the U.S. and manufacturers are stepping up with capital construction spending to increase supply and expand offerings. Industrial Info Resources data show more than $3 billion worth of current and planned construction activity at U.S. transformer-manufacturing facilities.

Current Construction Led by Expansions

Expansions of existing plants are very much the name of the game when it comes to current, on-the-ground spending, and one of the leading projects in this area comes from Hitachi Energy, which is adding a new manufacturing building geared specifically for large transformers to its campus in South Boston, Virginia. Hitachi is aiming to manufacture the large transformers used for applications such as electricity transmission through high-voltage networks, connecting generating facilities to the grid, and supporting large electric loads needed by data centers and large industrial facilities.

The project is adding substantially to the existing campus, with Hitachi anticipating the new manufacturing facility will add 825 jobs to the existing campus workforce of around 850. A July 2026 article from Engineering News-Record noted some interesting construction features, including assembly bays reaching 130 feet high to accommodate the 375-ton overhead crane needed to move the large equipment. Mitsubishi is aiming to wrap up construction and begin ramping up production in late 2028 or early 2029. Subscribers can access details of the project, including construction timelines, key contact details, and equipment and service needs, by clicking here.

Hitachi Energy also is underway with a smaller but related plant expansion at its Alamo, Tennessee, campus, where the company is adding 60,000 square feet of new building space focused on the manufacture of transformer components--specifically transformer bushings, which allow electricity to enter or leave a transformer safely without making contact with the transformer's metal casing.

Multiple other expansion projects are underway at U.S. transformer plants, with a particularly notable expansion coming from Hyundai Power Transformers USA Incorporated, which is expanding production of the extra-high-voltage transformers used to move electricity over large distances. These transformers are very much in keeping with the buildout of U.S. high-voltage direct-current (HVDC) transmission capacity, further details of which can be found in September 15, 2026, article - U.S. Power Transmission 'Super-Highways' Moving Along.

Revamps and renovations at existing plants also feature prominently in current project activity.

Future Construction

Hitachi Energy made another major project announcement only last month regarding construction of a grassroot transformer factory in Gallman, Mississippi. In announcing the Mississippi plant, Hitachi Energy noted it would be the company's largest U.S. investment and that the project boosted its broader U.S. spending to $1.5 billion.

Hitachi's Gallman plant will target a different class of transformers than its South Boston project, this one taking aim at production of small and medium-sized power transformers designed for capacities of up to 230 kilovolts, according to Utility Dive. Hitachi potentially could break ground on the facility by the end of this year or at least by early next, putting production on track to begin in 2029.

Another transformer construction project that is just getting off the ground is Niagara Power Transformers' renovation of a previously fire-damaged brownfield site just outside Buffalo, New York, which involves both new construction and renovation. Initial construction includes demolition along with new construction and paves for a future expansion down the road. Niagara hasn't elaborated on exactly which products the plant will produce, but noted in a public announcement that it would boost the company's production capacity by around 50%. Among Niagara Power Transformers' core products are liquid-filled power and substation transformers used by electric utilities, substations and industrial facilities.

Key Takeaways

• Demand for power transformers is paving the way for spending at U.S. transformer manufacturing facilities.
• Hitachi Energy is a major spender in this sector, with multiple projects underway and on the books.

---

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).