Yes — the United States is actively working to expand domestic capacity and reduce reliance on imports for large power transformers, driven by the AI data-center boom, grid modernization, and national security concerns. Progress is real but gradual, as new factories take years to come online and key materials (especially high-quality grain-oriented electrical steel) remain constrained.
Private-sector expansions
Manufacturers have announced roughly $2 billion in U.S. transformer-related capital projects. Major examples include:
Hitachi Energy: More than $1 billion overall in U.S. grid equipment, including a $457 million new large-power-transformer factory in South Boston, Virginia. It is expected to become the largest such plant in the U.S., with construction underway and operations ramping toward 2028.
Siemens Energy: Expanding production (including large power transformers) in North Carolina and elsewhere, with U.S. manufacturing of big industrial units targeted to start around 2027 as part of broader billion-dollar investments.
Hyundai Power Transformers USA: About $200 million expansion in Montgomery, Alabama, to boost extra-high-voltage capacity by 50% and add 765 kV capabilities.
Others: WEG ($77 million expansion of its Missouri specialty-transformer plant focused on data-center needs), Hyosung (Memphis, Tennessee capacity growth plus large U.S. contracts), Eaton ($340 million for a new three-phase transformer site in South Carolina), Prolec GE / GE Vernova, Delta Star, and Virginia Transformer facility upgrades.
These moves respond directly to lead times that have stretched to 3–5 years and domestic production that has covered only about 20% of large-power-transformer demand.
Policy and government support
The Trump administration has treated the issue as a national-security priority:
In April 2026, a Presidential Determination under the Defense Production Act declared grid infrastructure—including transformers and electrical core steel—“dangerously limited” and essential to national defense. This authorizes the Department of Energy to use tools such as purchases, purchase commitments, and financing to expand domestic capability.
DOE has received hundreds of millions (e.g., $375 million) for supply-chain work on transformers and related components.
Existing incentives from the Inflation Reduction Act (tax credits like 48C and 45X, domestic-content bonuses) continue to support expansions, alongside tariff adjustments on steel and related products.
Upstream materials (the steel bottleneck)
Grain-oriented electrical steel (GOES) remains a choke point—only one U.S. mill (Cleveland-Cliffs’ Butler Works in Pennsylvania) produces it. Efforts include modernization/expansion talks, Defense Department purchases, and new capacity plans such as Nippon Steel / U.S. Steel’s grain-oriented electrical steel production at the Big River facility in Arkansas (targeted for mass production around 2028). Quality and grade issues with domestic GOES are still noted as challenges that need targeted investment.
Next-generation alternatives
Startups focused on solid-state transformers (SSTs)—which can be smaller, more efficient, and potentially faster to scale for data-center and medium-voltage needs—have raised hundreds of millions of dollars. Companies such as Heron Power, Amperesand, DG Matrix, and others are targeting commercial deployments and U.S. factories in the coming years. These do not fully replace traditional large power transformers but could ease pressure in key growth areas.
Bottom line: Domestic manufacturers and policymakers are competing seriously—private capital is flowing because of surging AI-driven demand, and government tools (especially DPA authorities) are being deployed to accelerate capacity. Full relief will take several years as factories ramp up, skilled labor is trained, and steel supply improves. Imports (from Mexico, South Korea, Europe, and elsewhere) will remain important in the near term, but the direction of travel is clearly toward greater U.S. production and supply-chain resilience.
