By Laila Kearney and Kaori Kaneko
NEW YORK/TOKYO, Sept 16 (Reuters) - Hitachi Energy plans to build a $528 million factory in Mississippi to produce electrical transformers, marking the single-biggest investment the company has made as part of its U.S. manufacturing expansion, the company said on Tuesday.
The country's record-high power demand - driven by the proliferation of the technology industry's giant data centers and the electrification of buildings and transportation - has butted up against
a lack of critical electrical infrastructure like transformers and circuit breakers.
The Gallman, Mississippi, plant, which is expected to start operations in 2029, will be roughly double the size of Hitachi Energy’s existing Crystal Springs facility in the state.
The Gallman plant will produce the mid-range transformers that are used in data center projects, semi-conductor plants and other industrial operations with large power needs, the company said. Unlike the largest types of transformers used in very high-voltage grid infrastructure, these transformers would be roughly equal to the size of a detached garage, versus a two-story house, said Hitachi Energy, which is based in Zurich, Switzerland.
"The transformers produced there in a couple of years will be essential for building data centers, for investing into semiconductors, because they are closing this critical gap from transmission transformers to industrial production," said Andreas Schierenbeck, CEO, Hitachi Energy, at a conference in Houston.
Hitachi's new Mississippi investment will complete the $1.5 billion the company is spending to boost its production capacity in the U.S., with the factory potentially being able to produce dozens of transformers annually, the company said.
"We're going to build big things in our electrical infrastructure, but we need the components," U.S. Energy Secretary Chris Wright said about the new Hitachi factory at a conference in Houston. "We need the transformers to build that big expansion."
(Reporting by Laila Kearney in New York and Kaori Kaneko in Tokyo; additional reporting by Georgina McCartney in Houston; Editing by Kirsten Donovan, Alexandra Hudson)
