According to the Financial Times, electricity transformers have become one of the biggest bottlenecks in the global AI boom, as soaring demand from data centers, renewable energy projects, and electrification outpaces manufacturing capacity. Lead times for large transformers have stretched from months to years, while shortages of electrical steel, copper, and skilled workers are slowing production and delaying major infrastructure projects.
The report says AI data centers are a key driver of rising electricity demand, with nearly 40% of planned US data center projects at risk of delays because of power equipment shortages. Transformer manufacturers such as Hitachi Energy, Siemens Energy, and GE Vernova are expanding production, while the US government is supporting domestic manufacturing through the Defense Production Act to strengthen grid supply chains.
They highlight emerging technologies aimed at easing the shortage. Companies such as Heron Power are developing modular solid-state transformers that use power electronics instead of traditional steel-and-copper designs, potentially making future power systems more efficient and better suited to AI-driven electricity demand.
