Hitachi Energy expands China footprint with $300m grid manufacturing push

Global technology leader Hitachi Energy has vowed to continue expanding its investments in China, banking on the country's unparalleled manufacturing capabilities and rapid green transition to meet booming global demand for critical power grid equipment.

Manifesting this commitment, the multinational corporation recently announced a strategic investment of approximately $300 million to build a power transformer smart manufacturing base and expand its transformer component capability in Hefei, Anhui province.

Concurrently, the company inaugurated a newly digitized production line for transformer tap changers and broke ground on an ultra-high-voltage bushing project at its existing Hefei component hub.

The expansion will nearly triple the factory's tap changer capacity, transforming it into a highly automated "Lighthouse" facility for the global market, said Bruno Melles, executive vice-president of Hitachi Energy and CEO of its transformer business unit, expressing robust confidence in the Chinese market and the broader macroeconomic trends driving the sector.

Part of the fresh capital injection is backed by Hitachi Energy's previously announced $9 billion global investment plan, aimed at scaling up production and enhancing supply chain resilience, he said.

"With the rapid development of artificial intelligence, data centers, transportation and industrialization, global electricity loads continue to climb and market demand for critical grid equipment has reached unprecedented heights," Melles said.

He noted that AI data centers typically require incredibly fast delivery times, necessitating massive, proactive investments in grid component capacity.

"This investment fully reflects Hitachi Energy's firm confidence in continuously deepening our roots in the Chinese market. By elevating our manufacturing level and strengthening the resilience of the transformer value chain in China and globally, we will further support customers in building a more secure, affordable and sustainable energy system," added Melles.

Driven by an explosive surge in AI computing demand, electricity consumption by China's data centers is projected to nearly quadruple by 2030, reaching 774 terawatt-hours, global research firm Wood Mackenzie said.

According to the National Energy Administration, electricity used by internet data services surged 44 percent year-on-year to 49.4 billion kilowatt-hours in the first half of 2026.

Wu Liqiang, an official with the China Electricity Council, said electricity demand from emerging industries is only expected to continue growing at a rapid pace in the years to come.

The sentiment was echoed by Zhao Yongzhan, executive vice-president of Hitachi Energy and head of the North Asia region, who emphasized the strategic upgrade of the company's local footprint.

"This significant investment not only reflects our long-term commitment to customers, partners and the market, but also highlights our firm confidence in the development prospects of China's manufacturing sector," Zhao said.

Zhao pointed out that the new investment will further support the localized production of critical UHV components that were previously imported from Europe, enhancing the resilience of the UHV supply chain.

"The brand-new power transformer manufacturing base and the UHV bushing center open a new chapter for Hitachi Energy's development in China. We will continuously support the construction of China's new energy system and better satisfy the escalating needs of the global market," he added.

This continued influx of foreign capital into high-end manufacturing underscores a broader macroeconomic trend, experts said.

Pan Yuanyuan, an assistant researcher at the Chinese Academy of Social Sciences' Institute of World Economics and Politics, noted that China's investment environment remains highly attractive to forward-looking multinational corporations.

"China offers a unique combination of a mega-sized market, a comprehensive, resilient industrial chain and continuous efforts to optimize the business environment," Pan said. "For multinational companies today, investing in China is no longer just about accessing a vast consumer base. It is a strategic necessity to integrate into a highly efficient global supply chain and capitalize on the country's rapid advancements in green energy and digital transformation."

zhengxin@chinadaily.com.cn