Japan’s Hitachi to Invest $1 Billion to Boost US Power Grid Manufacturing

The planned new facility will be the largest manufacturing site for large power transformers in the United States, Hitachi noted.

A Hitachi logo at an exhibition in Tokyo on Oct. 29, 2013. Yoshikazu Tsuno/AFP via Getty Images

Hitachi Energy announced on Sept. 4 that it would invest $1 billion to expand its U.S. manufacturing capabilities to better meet growing energy demand from the country’s burgeoning data center industry.

Tokyo-based Hitachi said it will invest $457 million to build a state-of-the-art, large power transformer manufacturing facility in South Boston, Virginia, as well as expand production capabilities at existing facilities throughout the eastern United States.

Andreas Schierenbeck, CEO of Hitachi Energy—a division of Hitachi Ltd., which focuses on power grids, renewable energy integration, and electrical equipment—said onshoring production of large power transformers is a crucial step in establishing a domestic supply chain and reducing production bottlenecks as demand surges for the essential components.

Peter Ferrell, director of government relations for the National Association of Electrical Manufacturers, said lead times to deliver large power transformers have stretched from roughly six weeks to as long as three years.

“Power transformers are a linchpin technology for a robust and reliable electric grid and winning the AI race,” Schierenbeck said. “Bringing production to the U.S. is essential as demand for these transformers across the economy is surging.”

Hitachi has operated a 607,000 square-foot transformer manufacturing facility in South Boston since 1968. The planned new facility will be built alongside the company’s existing campus and will be the largest manufacturing site for large power transformers in the United States. Construction is expected to begin this year, with the facility coming online in 2028. The project will create more than 825 new jobs in Southside Virginia, Hitachi said.

Virginia Democratic Sen. Mark Warner said Hitachi’s investment in the state comes at a critical time to help meet the country’s growing energy demands.

“At the local level, this is a great investment in Southside Virginia’s economy and manufacturing industry,” Warner said.

“At the state and national level, this is an important strategic step to ensure we have the power needed to service our communities, businesses, and growing AI industry.”

Hitachi’s other planned investments include $70 million to bolster production of its high-voltage energy component manufacturing facilities in southwestern Pennsylvania, and $106 million to increase transforming manufacturing capabilities at its plant in west Tennessee. It also earmarked $22.5 million to increase transformer production capacity at its facility in southwestern Virginia.

In addition to helping meet increased energy demand from large hyperscale AI data centers, the investments dovetail with the Trump administration’s White House AI Action Plan, which calls for increased domestic production and access to critical energy infrastructure components, Hitachi said.

Secretary of the Interior Doug Burgum noted that Hitachi’s investment signals a growing wave in private investment in U.S. energy.

“To lead in AI, America must lead in energy, and this investment proves we’re doing just that,” Burgum said.

Toshiaki Tokunaga, Hitachi’s president and chief executive officer, added that the United States remains a key market for Hitachi, which has committed more than $9 billion to its global investment program.

“This investment reflects our commitment to powering America’s energy future to meet the accelerating demands for reliable and sustainable solutions,” Tokunaga said.

“We are supporting American manufacturing, the development of critical infrastructure, and the rapid expansion of data centers driven by AI adoption.”