China’s transformer industry is currently experiencing a surge in global demand. Market growth is being driven by three major factors: incremental demand from AI computing infrastructure, structural demand stemming from the global energy transition, and replacement demand caused by aging power-grid equipment in Europe and North America. Together, these factors form the foundation for the industry’s development.
The rapid increase in global transformer demand is mainly attributable to three trends. First, many countries are upgrading and replacing aging power-grid infrastructure. Second, the rapid expansion of artificial intelligence is driving significant growth in electricity consumption as computing capacity scales up. Third, the development of renewable energy worldwide requires extensive transformer support for grid integration.
The rapid development of global AI computing infrastructure has made high-power, highly reliable electricity supply a critical requirement for computing clusters, and transformers are an essential component of such infrastructure. The global data center market is projected to grow from USD 242.72 billion in 2024 to USD 584.86 billion by 2032, driving demand for high-end transformers designed for data centers. Some Chinese manufacturers have already secured related orders through 2027. Compared with conventional data centers, AI data centers have much higher power density and more stringent requirements for power-supply stability and conversion efficiency, creating demand for specialized transformers. Solid-state transformers, characterized by compact size and high flexibility, can perform AC/DC conversion and are considered a future development direction for direct-current power distribution systems in data centers. They are expected to become the ultimate power-supply solution for AI data-center architectures. The AI boom is further stimulating data-center construction, while Chinese transformer products remain competitive in terms of technological maturity, cost-effectiveness, and delivery efficiency.
The global energy transition and electrification process are accelerating. Renewable-energy sectors such as wind power, solar power, and electric-vehicle charging infrastructure require transformers with new technical capabilities, including wide-voltage regulation and high-frequency, low-loss designs. This is generating sustained structural demand for advanced transformer products.
Developed economies such as the United States and Europe are also facing substantial replacement demand due to aging grid infrastructure. In the United States, 46% of power-distribution facilities have exceeded their intended service life, with average operating periods surpassing the original 25-year design lifespan. Some European grid facilities have been in operation for as long as 50 years. Under extreme weather conditions, failure rates of aging transformers have increased by 70% over the past decade. As one of the world’s largest transformer buyers, the United States currently faces an estimated supply gap of approximately 30%, a situation that may persist through 2030.
The domestic market also provides strong support for China’s transformer industry. The State Grid Corporation of China has announced planned investments of RMB 4 trillion during the 15th Five-Year Plan period, representing an increase compared with the 14th Five-Year Plan. In 2025, China’s total electricity consumption reached 10.4 trillion kilowatt-hours, up 5% year-on-year. Continued growth in electricity demand, combined with power-grid modernization and expansion, is creating robust domestic demand for transformer manufacturers. For example, renewable-energy projects in western China have significantly boosted demand for transformers.
According to industry analyses, the global transformer market has already exceeded USD 60 billion and is expected to surpass USD 100 billion by 2030, representing a compound annual growth rate (CAGR) of approximately 7%. Driven by these multiple factors, transformers occupy a critical position at the intersection of the global energy transition and technological transformation.
