Since the beginning of 2026, China's transformer exports have continued their strong growth momentum. Customs data shows that in the first two months of 2026, China's exports of power transformers above 10MVA reached 4.4 billion RMB, a year-on-year increase of 61%, further accelerating from the 52% growth rate for the full year of 2025. For the entire year of 2025, power transformer exports grew more than 45% year-on-year, continuing a trend of rapid growth.

By market segment, the Middle East contributed the largest share at 34% with 32% year-on-year growth; Asia saw the most rapid growth, accounting for 26% with a 151% increase; Europe represented 21% with 36% growth; the Americas accounted for 14% with 45% growth; and Africa achieved the highest growth rate at 344%.

The core drivers behind the strong export performance are multifaceted. First, the surge in AI data center demand: data center electricity demand has grown 30% over five years, with US data centers expected to add 74GW of demand between 2025 and 2028. Second, grid upgrade and replacement cycles: approximately 55% of operating distribution transformers in the United States have exceeded their 33-year design life and are entering a concentrated replacement period. Third, overseas supply shortages: US transformer import dependence has exceeded 85%, with new production capacity not expected to come online until at least 2027. Fourth, China's industrial chain advantages: China accounts for about 60% of global transformer production capacity, with a complete industrial chain and significant lead-time advantages.

Regarding the US market, the United States is experiencing a transformer "super cycle" driven by three forces: grid upgrades, energy transition, and explosive data center growth. A recent Morgan Stanley research report indicates that the supply-demand imbalance in the US large power transformer market will persist at least until 2030. Key data points: US transformer import dependence has risen from approximately 70% in 2021 to over 85%; domestic US capacity can only cover about one-third of actual demand; transformer prices have accumulated an 80% increase over the past five years; new transformer factories typically take one to three years to become operational, and equipment lead times can extend up to six years. Notably, in the first two months of 2026, Chinese transformer exports to the United States grew 182% year-on-year, a significant acceleration from the 48% growth rate for all of 2025. Nevertheless, Chinese products currently account for only about 4% of US market demand, indicating substantial room for further penetration.

In the Middle East market, China's exports of power transformers to Saudi Arabia exceeded 6 billion RMB in 2025, representing more than 100% year-on-year growth. Combining data from the past two years, Saudi Arabia has surpassed the United States as the largest destination for Chinese power transformer exports. Chinese companies have broad prospects in the Middle East market, and it is expected that more companies will establish local factories to advance localization efforts. Key companies include TBEA, Sieyuan Electric, Huaming Equipment, Guangxin Technology, and Tgood.

On the policy front, on March 20, 2026, four Chinese ministries and commissions — the Ministry of Industry and Information Technology, the National Development and Reform Commission, the State-owned Assets Supervision and Administration Commission, and the National Energy Administration — jointly issued the "Implementation Plan for High-Quality Development of Energy-Saving Equipment (2026-2028)". This document marked the first time a national-level policy explicitly proposed promoting the application of "large-capacity solid-state transformers" and other new types of equipment. The policy's core targets are to achieve over 75% of new energy-efficient transformers and 15% of in-operation energy-efficient transformers by 2028. The policy specifically emphasizes integrating solid-state transformers with new energy scenarios such as wind power, photovoltaics, energy storage, and hydrogen energy, signaling that solid-state transformers have entered an industrial acceleration phase driven by policy support and application scenarios.