Hitachi Energy, a unit of Japan’s Hitachi, said on Thursday it plans to invest $1 billion to expand its U.S. power grid manufacturing capabilities, as the country faces surging electricity demand driven by artificial intelligence (AI) data centers.
Nearly half of the investment, $457 million, will fund a new facility in South Boston, Virginia, to produce large power transformers, which Hitachi described as the largest in the United States. The transformers, which can be as large as a two-story home, are critical for transporting electricity across the grid. Construction is scheduled to begin this year, with operations expected to start by 2028.
“Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks,” said Andreas Schierenbeck, CEO of Hitachi Energy.
The announcement comes amid a push by the administration of U.S. President Donald Trump to expand electricity supply to support the rapid growth of energy-intensive AI data centers. U.S. Energy Secretary Chris Wright said, “If we are going to win the AI race, reindustrialize, and keep the lights on, America is going to need a lot more reliable energy. Thankfully, Hitachi is delivering.”
The U.S. currently hosts the world’s largest concentration of data centers, which are expected to triple their energy consumption to about 12% of domestic power supply within three years. The pandemic-induced global supply chain disruptions have also created a shortage of large transformers, underscoring the need for increased domestic production.
In addition to the Virginia facility, Hitachi is investing in its U.S. operations near Pittsburgh, Pennsylvania, which produce other electrical equipment such as breakers and switchgear. The company’s broader global expansion involves more than $9 billion in investment to enhance manufacturing capacity.
