Hitachi Energy, a subsidiary of Japan’s Hitachi Ltd., announced on Thursday that it will invest $1 billion to expand its US manufacturing of grid equipment, describing it as a landmark step for the nation’s power sector.

At the heart of the plan is a $457 million transformer factory in South Boston, Virginia, which is expected to become the nation’s largest site producing large-scale power transformers. These units are essential for transmitting electricity over long distances and supporting high-demand applications, including electricity transmission, power generation, AI data centers, and industrial uses.

The investment comes amid growing strain on the country’s electric grid. Rising energy use from AI data centers, the shift to electric vehicles, and industrial expansion have pushed demand higher, with utilities warning of long delays in securing transformers — in some cases lasting several years.

“If we are going to win the AI race, reindustrialize, and keep the lights on, America is going to need a lot more reliable energy. Thankfully, Hitachi is delivering,” US Energy Secretary Chris Wright said in a statement.

Andreas Schierenbeck, chief executive officer of Hitachi Energy, underscored the urgency, stating: “Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks.”

Virginia at the center of expansion

Virginia leaders hailed the project as a boost to both the state and the nation’s energy future. Governor Glenn Youngkin called the announcement “transformational for Southside Virginia, as will the power transformers those new hires are set to build. These transformers are critical to our Nation’s electrical grid and will be built right there in Virginia.”

The South Boston facility is expected to create more than 825 new jobs. In addition to Virginia, Hitachi plans investments in Tennessee, Missouri, Mississippi, and Pennsylvania to expand domestic production of transformer components and other high-voltage equipment.

White House ties to AI and energy strategy

President Donald Trump’s administration, which has linked energy expansion directly to its AI Action Plan, praised Hitachi’s commitment.

“To lead in AI, America must lead in energy, and this investment proves we’re doing just that,”  US Secretary of the Interior Doug Burgum said in a statement.

According to the White House, the Virginia factory aligns with Trump’s broader “energy dominance agenda,” aimed at securing reliable power for sectors heavily dependent on AI.

Part of Hitachi’s global push

Construction on the new Virginia factory is set to begin before the end of the year, with the company expecting it to be operational by 2028. The US investment contributes to Hitachi Energy’s $9 billion worldwide expansion program, which includes scaling up manufacturing, research, and supply chain operations.

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