Hitachi Energy announced a $1 billion investment to expand US electrical grid manufacturing, with $457 million earmarked for a new power transformer facility in South Boston, Virginia. The facility, slated to become the largest transformer manufacturing site in the US, reflects mounting pressure on equipment suppliers as artificial intelligence drives unprecedented electricity demand.
Critical equipment like transformers now have four-to-five-year lead times, creating bottlenecks that threaten data center expansion plans. Lead times of nearly two years have become common for power equipment, while electricity demand from data centers worldwide is set to more than double by 2030.
The Virginia investment, part of Hitachi’s broader $9 billion global expansion, comes as the Japanese company seeks to capitalize on surging demand. Data center vacancy rates have plummeted to a record low 2.3%, with hyperscalers now requesting sites requiring multiple gigawatts of power.
Hitachi’s move follows similar investments by competitors. Eaton announced a $340 million transformer manufacturing investment in February, signaling industry-wide recognition of supply constraints.
The timing aligns with the Trump administration’s AI infrastructure priorities, though Hitachi has been expanding US operations since before the recent policy shift. The company’s existing Virginia campus already employs approximately 450 people.
Goldman Sachs forecasts global power demand from data centers will increase 50% by 2027, potentially rising as much as 165% by 2030. The new facility, expected to create 825 jobs and begin operations in 2028, represents Hitachi’s bet that this demand surge will prove durable despite mounting questions about AI economics and efficiency improvements that could reduce power requirements.
