Electrical infrastructure and power supply

Why the concentration exists

The squeeze reflects a mismatch between surging electricity demand and a manufacturing base that has not added capacity at the same pace. Developers plan 86 GW of new utility-scale generating capacity in the United States for 2026 alone, with battery storage adding another 24 GW and solar accounting for the majority of additions. Each new generation source needs transformers, switchgear, and cabling before it can deliver electrons, so the same constrained component pool is being drawn on by utilities, data centers, and industrial electrification projects at the same time. Order backlogs have lengthened rather than shortened even as prices for cables and transformers have risen sharply since 2019.[2][3][5][8]

What the evidence shows

Who supplies it

Electrical infrastructure for hyperscale fabs is supplied by a small group of multinational electrification vendors that also serve utilities, rail, and process industries. ABB runs an Electrification Business Area that serves customers in more than 100 countries through over 200 manufacturing facilities and a workforce of over 50,000. The company's medium-voltage HiPerGuard UPS is the system being deployed at Applied Digital's 400 MW campus in North Dakota, where it replaces standard low-voltage distribution and lets the site scale in 25 MW blocks. ABB's UPS for medium-voltage applications was previously only manufactured in New Zealand before the company's Henrico County, Virginia expansion.[7][10][11][12]

Imports dominate the high-voltage end of the US market, with over 80% of new High Voltage Power Transformers sourced abroad as of 2019. About 88% of laminations and 75% of wound cores for those transformers were also imported that year, leaving the supply chain exposed at the upstream steel and core stages. Grain-oriented electrical steel, the key raw input, was produced by only one US company, AK Steel Holdings Corp, as of 2019. That single-source dependency at the materials level is a structural feature of the transformer supply base, not a temporary disruption.[14]

What it depends on, and what depends on it

Electrical infrastructure sits between the grid and the tools inside a fab: generation and high-voltage transmission on one side, switchgear, transformers, and UPS units on the other, and clean, conditioned power delivered to lithography scanners on the third. Each step down the chain strips voltage, isolates faults, and adds redundancy so that a grid event does not propagate into a tool shutdown. The same components also serve data centers, which now consume electricity on a scale that international agencies compare to national totals, with global data center electricity use projected to surpass 1,000 TWh by 2026, more than Japan's current demand.[15]

Where it sits in the stack

What would break it

Even behind-the-meter generation does not bypass the equipment bottleneck, because turbines and electrical gear face their own long lead times. Grid-enhancing technologies and regulatory adjustments could free enough hosting capacity to connect between 1,200 and 1,600 GW of advanced-stage projects currently stuck in queues worldwide. In the United States, over 80% of new High Voltage Power Transformers were imported as of 2019, leaving the domestic market structurally dependent on overseas suppliers for the largest ratings. Any disruption at a handful of foreign plants therefore propagates into US fab build schedules.[1][4][14]

What to watch

Two further large-transformer capacity moves are dated. Hitachi Energy announced a $1 billion investment in transformer and grid equipment manufacturing with a new factory in Virginia, and Siemens Energy has targeted new US transformer capacity by 2027. The Department of Energy issued a Request for Information on September 18, 2025, titled 'Accelerating Speed to Power/Winning the Artificial Intelligence Race: Federal Action To Rapidly Expand Grid Capacity and Enable Electricity Demand Growth', with responses due by November 21, 2025, which will shape the next federal procurement push. Chubu Electric's Higashi Shimizu substation interconnection is set to grow from 300 MW to 900 MW, operational by 2027.[6][9][13]

Generation-side additions on the US grid for 2026 set the scale of transformer demand that fabs will compete against. Developers plan 86 GW of new utility-scale generating capacity in 2026, including 43.4 GW of utility-scale solar and 24 GW of battery storage, with Texas alone accounting for 12.9 GW of that storage. US installed nearly 26 GW of new generating capacity from January to August 2025, with solar making up about 19 GW, and FERC lists 136 GW of high-probability additions through August 2028, with renewables accounting for nearly 84%. Each gigawatt requires multiple transformers and switchgear units, so the cumulative plan is itself a leading indicator of component lead times through 2027.[3][8]

Related nodes

Sources

1. datacenterknowledge.com · 2026-05-20T13:49:48
2. iea.org · 25 February 2025
3. eia.gov · 2026-02-20
4. iea.org · 2026
5. iea.org · 2023
6. federalregister.gov · 2025-09-18
7. datacenterdynamics.com · June 13, 2025
8. utilitydive.com · August 2028
9. en.wikipedia.org · 2027
10. ceapower.com
11. richmonder.org · September 16, 2025
12. abb.bonwaygroup.com
13. rmi.org · 2025
14. exiger.com · 2019
15. siemens-energy.com