Analysis of Global Transformer Lead Times and the Sustainability of China's Supply Chain Advantages

Based on the latest collected industry data and market information, I will provide you with an

.

---

According to Q2 2025 survey data from international energy consulting firm Wood Mackenzie, lead times for large global power transformers and generator step-up transformers have reached record levels

:

Transformer Type	Lead Time	Change vs. 2019
Generator Step-Up Transformer (GSU)	144 weeks (approx. 2.8 years)	274% increase in demand
Power Transformer	128 weeks (approx. 2.5 years)	116% increase in demand
Distribution Transformer	Approximately 60 weeks (over 1 year)	10%-30% supply gap

This round of supply tightness is not a localized phenomenon, but a systemic global shortage of transmission and distribution equipment. A joint report released by Wood Mackenzie and American Clean Power points out that since 2019, demand for almost all major power infrastructure categories has surged by 35% to 274%

.

The global surge in transformer demand stems from the superposition of three structural factors:

A September 2025 report from Goldman Sachs indicates that most European grid facilities have been in operation for 40 to 50 years . Data from Bank of America shows that 31% of U.S. transmission facilities and 46% of distribution facilities are approaching or exceeding their designed service lives .

The International Energy Agency (IEA)'s 2025 Mid-Term Progress Report on the Power Sector shows that wind and solar photovoltaic power will meet over 90% of the global growth in power demand . The number of transformers required for a photovoltaic power plant can be 1.8 times that of a coal-fired power plant of the same scale.

Elon Musk once predicted: “Transformer shortages will constrain the speed of U.S. AI development.” The power consumption of processing one ChatGPT query is approximately 10 times that of a traditional Google search .

---

China has established the world’s largest transformer industry system. According to a report by Science and Technology Daily, China’s transformer output accounts for over 60% of the global total

. United Markets, an international energy industry analysis firm, predicts that the global transformer market will reach $103 billion by 2031, doubling from $58.6 billion in 2021 .

From the perspective of export data, China’s transformer industry is experiencing unprecedented prosperity:

• In the first 8 months of 2025, China’s transformer export value reached RMB 29.711 billion
  [9]
• In January-October 2025, transformer export value reached RMB 52.22 billion, surging 38.9% year-on-year
  [10]
• In January-November 2025, cumulative export value reached RMB 57.86 billion, up 36.3% year-on-year
  [11]

Growth by region is particularly impressive:

• European market: Soared by over 138%
• Asian market: Increased by 65.39%
• African market: Increased by 28.03%

The core competitiveness of China’s transformer industry lies in its complete industrial chain from raw materials to finished products:

Known as the “craftsmanship in steel”, grain-oriented silicon steel can reduce transformer power consumption by 45%-50%. In 2024, China’s output of grain-oriented silicon steel reached 3.0325 million tons, 5 times that of Japan and 8 times that of the U.S. . Baowu Group has built the world’s only dedicated production lines for 0.18mm and 0.20mm silicon steel sheets, with top-tier global technical performance.

Taking China National Electrical Equipment Group as an example, it integrated established players such as XD Electric, Baobian Electric, and Shandong Electric in 2021 to form the “strongest national team” :

• TBEA: Annual output of transformers and reactors reaches 420 million kVA, ranking among the top globally
• XD Electric: Leader in ultra-high voltage (UHV) projects, dominating 65% of the UHV market
• Baobian Electric: Products exported to over 40 countries and regions

Zhang Xiaojin, General Manager of Jiangsu Huachen, stated: “The core competitiveness of Chinese transformers lies in a mature and complete supply chain system and strong industrial integration capabilities. For transformers with equivalent performance, domestic products are priced at approximately RMB 10,000, while similar European equipment may cost RMB 30,000 to 50,000.”

Technologically, China has established absolute advantages in UHV and extra-high voltage (EHV) fields:

• TBEA is the only enterprise deeply involved in all UHV projects
• XD Electric holds an absolute leading position in UHV AC technology
• High-frequency transformer magnetic integration technology is at the industry forefront, with mass-produced 2.4MW solid-state transformers achieving an efficiency of over 97.5%

---

Edvard Christoffersen, Senior Supply Chain Analyst at Rystad Energy, estimates that the global transformer supply shortage will last at least until the end of 2026 . In the window period when European and U.S. manufacturers have not yet released new production capacity, Chinese enterprises will continue to dominate global supply.

According to Jiemian News, many Chinese manufacturers have order backlogs extending beyond 2026, with some European customers willing to pay a 20% premium to secure supply . As of the end of October 2025, Jiangsu Huachen had outstanding orders of approximately RMB 1.73 billion, exceeding its full-year revenue of the previous year .

TBEA recorded a net profit attributable to parent company shareholders of RMB 5.484 billion in the first three quarters of 2025, up 27.55% year-on-year, with its overseas orders in Q1 2025 increasing 70% year-on-year . Siyuan Electric posted a net profit attributable to parent company shareholders of RMB 2.191 billion in the first three quarters of 2025, representing a 46.94% year-on-year increase .

The transformer industry is labor-intensive and has high requirements for skilled technical capabilities. For example, it takes about three years to train a basically qualified wire winder, five years to become a fully skilled technician, and at least seven to eight years to reach the “Level 8 Technician” standard . This long talent training cycle is the main reason why production capacity cannot be rapidly replicated like in the photovoltaic industry.

International giants have announced large-scale capacity expansion plans:

• Siemens Energy (Germany): Investing €2 billion in capacity expansion
• Hitachi Energy (Japan): Planning to invest $6 billion in capacity expansion by 2027 and hire 15,000 employees
• HD Hyundai Electric: Investing $274 million to increase global transformer production capacity by 30%
• Hitachi Energy: Adding $250 million for global transformer capacity expansion
  [21]

The U.S. previously imposed a 104% tariff on Chinese transformers, and while there have been signs of regulatory relaxation , the uncertainty of trade policies remains a potential risk for Chinese enterprises expanding overseas.

Chinese enterprises are transitioning from simple production capacity export to technological export:

• TGood has deployed an integrated “high-voltage + solid-state transformer” solution with an energy conversion efficiency of over 98%
• Jinpan Technology’s SST prototype is expected to complete certification in Q4 2025, and its high-voltage HVDC product is expected to complete certification in Q2 2026
• XD Electric’s high-frequency transformer magnetic integration technology is at the industry forefront
  [23]

To avoid trade barriers and get closer to markets, leading Chinese enterprises are accelerating their overseas layout. Zhang Xiaojin, General Manager of Jiangsu Huachen, stated that the company is promoting the construction of overseas factories .

The EU plans to invest €1.2 trillion in grid upgrades over 10 years, while the U.S. will invest $1.1 trillion in the power industry over 5 years . Part of this investment will be converted into local production capacity, which may form a substitution effect on Chinese exports.

---

Based on industry trends and enterprise competitiveness, it is recommended to focus on the following three investment themes

:

Investment Theme	Target	Core Logic
Leading Enterprises Going Global	TBEA (600089)	Deep participant in ultra-high voltage (UHV) projects; overseas orders increased 70% year-on-year
Leading Enterprises Going Global	Siyuan Electric (002028)	Leader in power equipment exports; breakthrough in North American AIDC market
New Energy Supporting Equipment	TGood (300001)	Leader in packaged substations; advanced solid-state transformer technology
New Energy Supporting Equipment	Jinpan Technology (688676)	Leader in dry-type transformers; digital factory upgrade

1. Trade Policy Risk:
   Tariffs and non-tariff barriers may impact exports
2. Raw Material Price Volatility:
   Prices of core materials such as grain-oriented silicon steel and copper affect gross profit margins
3. Overcapacity Risk:
   Global capacity expansion may lead to an industry downturn
4. Technological Iteration Risk:
   New technologies such as solid-state transformers may disrupt the traditional market

---

Against the backdrop of persistently high global transformer lead times (over 2 years), China will continue to dominate global supply by virtue of its 60% global production capacity share, complete industrial chain supporting capabilities, and cost advantages. Leading enterprises have order backlogs extending beyond 2026, with high certainty of performance growth.

With the release of production capacity by international giants and the advancement of localized production, the scale advantages of Chinese enterprises will converge to some extent. However, China’s technological accumulation in high-end fields such as UHV and solid-state transformers, as well as its overseas factory layout, will support its climb up the value chain.

In emerging application scenarios such as AI data centers and new energy consumption, enterprises with leading technological advantages will gain sustained competitiveness. China’s transformer industry is transitioning from “scale-driven” to “technology-driven”, and the success of this transition will determine whether long-term advantages can be maintained.

---

[1] Wood Mackenzie - “Making the Connection: Meeting the Electric T&D Supply Chain Challenge” (September 2025)
[2] Wood Mackenzie & American Clean Power - Global T&D Equipment Demand Analysis (2025)
[3] Goldman Sachs - Research Report on Aging European Grid Infrastructure (September 2025)
[4] Bank of America - Report on the Status of U.S. Power Infrastructure (August 2025)
[5] International Energy Agency (IEA) - 2025 Mid-Term Progress Report on the Power Sector
[6] Huashang Taolue - “Global Scramble for Chinese Transformers” (January 6, 2026)
[7] Science and Technology Daily - Report on the Global Status of China’s Transformer Industry
[8] United Markets - Global Transformer Market Forecast 2031
[9] General Administration of Customs of China - Transformer Export Data for January-August 2025
[10] General Administration of Customs of China - Transformer Export Data for January-October 2025
[11] General Administration of Customs of China - Transformer Export Data for January-November 2025
[12] Huashang Taolue - Analysis of China’s Grain-Oriented Silicon Steel Industry (January 2026)
[13] Jiemian News - “Transformer Shortage: Chinese Factories Patch Global Power Grids” (December 19, 2025)
[14] Jiemian News - Interview with Zhang Xiaojin, General Manager of Jiangsu Huachen (December 2025)
[15] Rystad Energy - Supply Chain Analysis by Edvard Christoffersen (2025)
[16] Jiemian News - Report on Lead Times for Orders from Chinese Transformer Manufacturers
[17] Jiemian News - Revenue Data of Jiangsu Huachen (First Three Quarters of 2025)
[18] Caifu Hao - Analysis of TBEA’s Overseas Orders and Performance (January 7, 2026)
[19] Caifu Hao - Analysis of Siyuan Electric’s Performance and Production Capacity (January 2026)
[20] Jiemian News - Analysis of Talent Training Cycles in the Transformer Industry
[21] Mordor Intelligence - Hitachi Energy Capacity Expansion Plan (March 2025)
[22] Huashang Taolue - Analysis of U.S. Tariff Policies on Chinese Transformers
[23] Caifu Hao - Analysis of XD Electric’s Technological Advantages (January 2026)
[24] Jiemian News - Jiangsu Huachen’s Overseas Factory Construction Plan
[25] Huashang Taolue - Investment Plans for Grid Upgrades in Europe and the U.S.
[26] Caifu Hao - Investment Themes and Target Selection in the Transformer Industry (January 7, 2026)