Transformer Manufacturing
Description
Companies in this industry manufacture power, distribution, and specialty transformers. Major companies include ABB (Switzerland), General Electric (US), Mitsubishi Electric (Japan), Schneider Electric (France), Siemens (Germany), and TBEA (China).
The global transformer market is expected to experience a compound annual growth of 8.5% from 2025 to 2029, according to Technavio.
The US transformer manufacturing industry includes about 250 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $5 billion.
COMPETITIVE LANDSCAPE
Demand is driven by construction spending and industrial production. The profitability of individual companies depends on efficient manufacturing and economies of scale in purchasing. Large companies compete by offering a variety of transformer products to utilities and industrial customers. Small companies can compete by offering innovative, niche products to industrial and consumer product customers. The US industry is highly concentrated: the 50 largest companies account for nearly 90% of industry revenue.
Imports, primarily from Mexico, Canada, South Korea, and China, account for about 35% of the US market. About 10% of US production is exported, chiefly to Canada and Mexico.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include power and distribution transformers, accounting for about 80% of the industry revenue. Other products include specialty transformers (about 10%), and indoor and outdoor instrument transformers (less than 5%).
Transformers are static electrical devices that convert alternating current from one voltage to another. Transformers are used either to increase (step up) or decrease (step down) voltage. Transformers ensure the correct voltage is used for an electricity use application.
Power and distribution transformers are used throughout the electrical grid to transmit and distribute electricity to residential, commercial, and industrial customers. Power transformers are used for the transmission of electricity at high voltages and are used at power generation sites and transmission substations, and are usually rated above 200 million volt-amperes (MVA). Distribution transformers are used for lower voltage distribution networks to deliver electricity to customers, and are generally rated below 200 MVA.
When electricity leaves a power generating plant it's at high voltage - usually between 155,000 to 765,000 volts - so it can travel on power lines, often for hundreds of miles. When the electricity reaches a power substation, the voltage is stepped down by a power transformer to about 7,200 volts. Power is then sent though transmission lines to distribution transformers where it is stepped down further to an end-use voltage used by customers. In the case of residential and most commercial users, distribution transformers deliver electricity at 220 to 240 volts. Some businesses may have power stepped down less due to higher voltage requirements. Large industrial users, including mining operations, paper mills, and cement and chemical plants, may have their own power transformers to ensure steady electricity supply at high voltage. Large commercial users of power transformers include hospitals, universities, hotels, office buildings, and airports.
Transformers are typically made by winding copper wire and adhesive-impregnated paper around a metal core (usually iron or aluminum) to create a coil. Oil-immersed transformers used in electricity grids are placed in a metal container that is then filled with mineral oil and sealed. The oil helps to cool and insulate the transformer. "Dry type" transformers usually have a metal housing for insulation but are cooled by air convection or fans. Key transformer inputs include copper, steel, paper, adhesives, and plastics.
The global transformer market is expected to experience a compound annual growth of 8.5% from 2025 to 2029, according to Technavio.
The US transformer manufacturing industry includes about 250 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $5 billion.
COMPETITIVE LANDSCAPE
Demand is driven by construction spending and industrial production. The profitability of individual companies depends on efficient manufacturing and economies of scale in purchasing. Large companies compete by offering a variety of transformer products to utilities and industrial customers. Small companies can compete by offering innovative, niche products to industrial and consumer product customers. The US industry is highly concentrated: the 50 largest companies account for nearly 90% of industry revenue.
Imports, primarily from Mexico, Canada, South Korea, and China, account for about 35% of the US market. About 10% of US production is exported, chiefly to Canada and Mexico.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include power and distribution transformers, accounting for about 80% of the industry revenue. Other products include specialty transformers (about 10%), and indoor and outdoor instrument transformers (less than 5%).
Transformers are static electrical devices that convert alternating current from one voltage to another. Transformers are used either to increase (step up) or decrease (step down) voltage. Transformers ensure the correct voltage is used for an electricity use application.
Power and distribution transformers are used throughout the electrical grid to transmit and distribute electricity to residential, commercial, and industrial customers. Power transformers are used for the transmission of electricity at high voltages and are used at power generation sites and transmission substations, and are usually rated above 200 million volt-amperes (MVA). Distribution transformers are used for lower voltage distribution networks to deliver electricity to customers, and are generally rated below 200 MVA.
When electricity leaves a power generating plant it's at high voltage - usually between 155,000 to 765,000 volts - so it can travel on power lines, often for hundreds of miles. When the electricity reaches a power substation, the voltage is stepped down by a power transformer to about 7,200 volts. Power is then sent though transmission lines to distribution transformers where it is stepped down further to an end-use voltage used by customers. In the case of residential and most commercial users, distribution transformers deliver electricity at 220 to 240 volts. Some businesses may have power stepped down less due to higher voltage requirements. Large industrial users, including mining operations, paper mills, and cement and chemical plants, may have their own power transformers to ensure steady electricity supply at high voltage. Large commercial users of power transformers include hospitals, universities, hotels, office buildings, and airports.
Transformers are typically made by winding copper wire and adhesive-impregnated paper around a metal core (usually iron or aluminum) to create a coil. Oil-immersed transformers used in electricity grids are placed in a metal container that is then filled with mineral oil and sealed. The oil helps to cool and insulate the transformer. "Dry type" transformers usually have a metal housing for insulation but are cooled by air convection or fans. Key transformer inputs include copper, steel, paper, adhesives, and plastics.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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