Transformer Market Size, Share & Industry Analysis, By Type (Power Transformer, Distribution Transformer, Isolation Transformer, Instrument Transformer) By Phase (Single Phase Transformer, Three Phase Transformer), By Application (Industrial, Commercial, and Utility) Regional Forecast, 2025-2032

The global transformer market size was valued at USD 61.26 billion in 2024. The market is projected to grow from USD 70.90 billion in 2025 to USD 137.72 billion by 2032, exhibiting a CAGR of 9.95% during the forecast period.

The transformer market is undergoing rapid growth as global electricity use increases, industrialization accelerates, and investments in power infrastructure expand. Countries are expanding and modernizing their transmission and distribution networks, resulting in a growing demand for transformers. Additionally, ongoing urbanization, smart city development, and the electrification of transportation are increasing electricity consumption, further fueling market growth. Governments and utilities are replacing aging grid assets with energy-efficient and smart transformers to reduce losses and enhance reliability.

Transformer market vendors are expanding their manufacturing facilities to meet growing global demand for electricity, grid modernization, and renewable integration. This expansion trend reflects the need for localized production, shorter lead times, and advanced manufacturing capabilities. In September 2025, Siemens Energy plans to expand its transformer manufacturing facility in Nuremberg, Germany, in anticipation of continued global demand for larger transformers needed for grid expansion. The company will invest approximately EURO 220m (USD 256.2m) in its expansion, creating 350 new jobs and enhancing production capabilities in Nuremberg.

Siemens, ABB, and GE dominate the transformer market because they combine decades of engineering experience with cutting-edge digital and sustainable technologies. Their global operations, strong brand trust, and alignment with energy transition goals position them as key suppliers in modernizing power grids, integrating renewable energy sources, and enhancing energy efficiency worldwide.

MARKET DYNAMICS

MARKET DRIVERS:

Growing Urbanization and Infrastructure Development to Propel Market Growth

One of the primary factors driving the global transformer market's growth is the rapid pace of urbanization and infrastructure development. The fast-growing population of cities, smart urban infrastructure development, and the development of commercial and residential projects are continuously increasing the need for reliable electricity. Governments and utilities are investing heavily in expanding and upgrading power transmission and distribution networks to meet growing energy needs, thereby driving the installation of power transformers and distribution transformers.

In September 2025, Hitachi Energy, the largest electrification company globally, announced an additional investment of USD 270 million (approximately USD 195 million) to expand its manufacturing facility for large power transformers in Montreal, Canada. This major investment builds upon a previously announced expansion in 2024, which will nearly triple the annual production capacity at the site, further enhancing Canada's reputation as a leading supplier of clean energy manufacturing to the world.

MARKET RESTRAINTS:

High Initial Investment and Installation Costs to Restrict Market Expansion

A significant constraint on the transformer market is the high initial investment and installation costs, which can inhibit widespread adoption of transformers, particularly in underdeveloped regions. The costs of manufacturing a transformer, especially high-voltage or smart transformers, depend on expensive raw materials such as copper, aluminum, and electrical steel, as well as the need for considerable precision engineering and sophisticated manufacturing facilities. Similarly, the costs of installing transformer assets include logistics, highly skilled labor, testing, and site preparation expenses. The high upfront costs often extend the timeline for modernization projects and delay the replacement of aging assets for utilities and industries with limited budgets.

MARKET OPPORTUNITIES:

Growing Adoption of Smart and Digital Transformers to Create Lucrative Growth Opportunities

The growing usage of smart and digital transformers is creating considerable new growth segments in the global transformer market. As power grids become increasingly complex and the electricity demand continues to rise, utilities and industries are transitioning to intelligent transformer platforms that enable them to monitor connections, automate operations, and perform predictive maintenance more easily and efficiently. Digital transformers incorporate IoT sensors, O&M communication modules, and analytics to enable continuous monitoring of the performance of connected elements, allowing operators to detect faults sooner and resulting in reduced downtime and improved energy efficiency. 

In October 2024, Hammond Power Solutions introduced HPS Smart Transformers for medium- and low-voltage transformers. This innovative solution incorporates IIoT-enabled power monitors, enabling users to obtain critical data and proactively review and identify concerns before experiencing costly downtime events.

HPS Smart Transformers offer users unparalleled visibility into their electrical systems. By consistently monitoring key metrics and providing real-time analytics, users are better able to translate the data to identify early warning signs of equipment stress or failure. This proactive process is crucial for maintaining efficient operations while minimizing expensive downtime.

TRANSFORMER MARKET TRENDS: 

Increased Integration of Renewable Energy Systems to Drive Market Growth

The increased integration of renewable energy systems such as solar, wind, and hydroelectric power is a significant contributor to the growth of the global transformer market. As countries accelerate their transition to clean and sustainable energy, the demand for efficient transformers that connect renewable energy sources to the power grid has increased significantly. Step-up transformers are needed to increase the voltage levels at generation sites for renewable generating facilities to transmit energy over long distances. Distribution transformers can accurately deliver the power generated at renewable generation sites to end users.

 In August 2025, Hitachi Energy India Ltd. announced an investment of approximately USD 33.83 million (rupees 300 crore) to upgrade the manufacturing capability of high-performance insulation materials for transformers, aiming to meet the growing demand.

In transformer applications, high-quality insulation material serves as the primary defense against electrical flow, protecting against internal short circuits. Hitachi Energy India’s investment guarantees support the country's and the world's energy transition goals. These transformers will tackle the technical challenges of integrating renewable power.

MARKET CHALLENGES: 

Fluctuating Raw Material Prices to Hamper Market Growth

Price fluctuations of significant raw materials, such as copper, aluminum, and electrical steel, are a key challenge to the global transformer market. Copper and aluminum are used in windings, and electrical steel is critical for magnetic cores. Changes in prices for these materials affect the costs of transformer manufacturers in producing the product, the price of transformers, and ultimately their profitability. Global influences, such as supply chain disruptions, geopolitical conflicts, trade restrictions, and variability in demand for industrial sectors, can all lead to unpredictable material costs.

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Segmentation Analysis

By Type

Growing Urbanization and Industrial Development Leads to Distribution Transformer’s Growth

Based on type, the market is classified into power transformers, distribution transformers, isolation transformers, and instrument transformers. 

The distribution transformer dominates the segment. The growing trend of urbanization, coupled with industrial development and population growth, is contributing to a rise in global electricity consumption.  To deliver electricity efficiently, utilities are also building local grids; each new substation or neighborhood network will require distribution transformers to reduce the voltage for end-users.

The power transformer segment is the second-dominant segment in the market. The power transformer segment is growing due to the rapid expansion and modernization of high-voltage, high-capacity transmission system infrastructure, accelerating electricity demand, and the integration and rollout of large-scale renewable energy projects.

By Phase

Higher Efficiency, Lower Losses, and Increased Power Capabilities Lead to Three-Phase Transformers Segmental Growth

In terms of phase, the market is categorized into single-phase transformers and three-phase transformers. 

The three-phase transformer segment dominates the transformer market due to its higher efficiency, lower losses, and increased power capabilities, making it suitable for industrial, commercial, and utility-scale power distribution and transmission applications.

The single-phase transformer is the dominant segment in the market. The single-phase transformer segment holds a significant market share, particularly in parts of the transformer market that supply electrical power to residential, rural, and light commercial buildings, as it offers a low-cost, simple, and reliable option for low-load conditions.

By Application

Power Generation, Transmission, and Distribution Fuels Utility Segment’s Growth

In terms of application, the market is categorized into industrial, commercial, and utility. 

The utility segment dominates the transformer market. The utility segment dominates the transformer market because utilities are responsible for power generation, transmission, and distribution, which require transformers at every voltage level to deliver electricity safely and efficiently.

The industrial transformer segment is growing as global industries expand, electrify, and modernize, creating strong demand for efficient, high-performance transformers to ensure a stable, sustainable, and uninterrupted power supply in industrial operations.

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Transformer Market Regional Outlook

By region, the market is categorized into Europe, North America, Asia Pacific, Latin America, and the Middle East & Africa. 

Asia Pacific

Asia Pacific held the dominant transformer market share in 2023, valued at USD 16.03 billion, and also took the leading share in 2024 with USD 47.62 billion. In the Asia Pacific, the transformer market is experiencing rapid growth due to surging electricity demand, industrial expansion, and the integration of large-scale renewable energy across emerging economies. In 2025, the Chinese market is estimated to reach USD 4.83 billion. The Chinese transformer market is growing as the nation modernizes its vast power grid, integrates renewable energy on a large scale, and industrializes rapidly, while also embracing smart and energy-efficient transformer technologies to support its long-term carbon and energy reduction goals.

For instance, in May 2025, Hitachi Energy supplied rectifier transformers for a significant green hydrogen project in Songyuan, Northeast China. This project is one of the largest integrated hydrogen-ammonia-methanol projects globally, built by China Energy Engineering Corporation (CEEC). The project envisions replacing fossil fuels with hydrogen across the Chinese industry, while accelerating the production of clean ammonia and methanol.

North America and Europe

Other regions, such as North America and Europe, are expected to experience notable growth in the coming years. During the forecast period, the North America region is projected to record a growth rate of 27.37% in 2024, the second-highest among all regions. It is expected to reach a valuation of USD 19.44 billion by 2025. The U.S. and Canada transformer market is growing due to grid modernization, renewable energy expansion, and the replacement of aging infrastructure across North America. Backed by these factors, countries such as the U.S. are expected to reach a valuation of USD 14.21 billion in 2024, and Canada is expected to reach USD 16.47 billion in 2025. After North America, the European market is projected to reach USD 15.63 billion by 2025, securing its position as the third-largest region in the market. In the region, Germany is estimated to reach USD 3.42 billion in 2025. The European transformer market is growing steadily due to grid modernization, the integration of renewable energy, and increasing electrification across various industries and transportation sectors.

Latin America

Over the forecast period, the Latin America and Middle East & Africa regions. The Latin America transformer market is expanding as the region develops and upgrades its power infrastructure to accommodate increasing electricity needs, integrate renewable energy, sustain industrialization, and electrify rural areas, supported by investments from both the government and private sectors. The Latin America market in 2025 is expected to reach a valuation of USD 3.13 billion.

Middle East & Africa

The Middle East and Africa transformer market is experiencing growth due to rising electricity demand, rapid urbanization, the expansion of renewable energy, and large-scale infrastructure development across the region. In the Middle East & Africa, the GCC is set to reach a value of USD 5.00 billion by 2025. 

COMPETITIVE LANDSCAPE

Key Industry Players:

Vendors Are Expanding Their Transformer Manufacturing Facilities To Support Power Infrastructure

Transformer market players are actively increasing their production capacities through facility expansions and technological upgrades. This strategy aims to ensure timely delivery, support the rising demand for energy-efficient and smart transformers, and strengthen regional  amid the ongoing global energy transition.

In July 2024, Toshiba Transmission & Distribution Systems (India) Pvt. Ltd. is planning to expand its transformer manufacturing capacity. The company announced that it would increase manufacturing capacity by approximately 1.5 times from its level as of the end of FY 2023-24, over three years starting from the current FY, 2024-25. Toshiba Group has positioned its power T&D business as a focus business and will invest approximately JPY 10 billion (USD 63.5 million) in TTDI to expand its capacity.

LIST OF KEY TRANSFORMER COMPANIES PROFILED:

• Hitachi Energy Ltd (Switzerland)
• Siemens Energy (Germany)
• Eaton Corporation (U.S.)
• GE Vernova (U.S.)
• Toshiba Corporation (Japan)
• ABB Group (Switzerland)
• Schneider Electric (France)
• Fuji Electric (Japan)
• Mitsubishi Electric Corporation (Japan)
• CG Power and Industrial Solutions Ltd. (India)
• WEG S.A. (Brazil)
• Arteche Group (Spain)
• LS Electric Co., Ltd. (South Korea)
• Hubbell Incorporated (U.S.)
• Voltamp Transformers Ltd. (India)

KEY INDUSTRY DEVELOPMENTS:

• In July 2025, LS Electric, a South Korean manufacturer of power and automation equipment, entered into a USD 123 million contract to provide ultra-high-voltage transformers for renewable energy projects in the western U.S. The production itself will take place at LS Electronics' sites in South Korea, with deliveries anticipated to commence in 2027.
• In June 2025, CG Power and Industrial Solutions Ltd. successfully obtained a contract from the Power Grid Corporation of India Ltd. for the provision and servicing of a 765kV Transformer package, 7TR-12 Bulk.
• In May 2025, GE Vernova Inc. announced that POWERGRID (Power Grid Corporation of India Limited) had awarded it a contract for the supply of more than 70 extra-high-voltage transformers and shunt reactors for essential High-Voltage Direct Current (HVDC) transmission projects across India. These units will operate at 765 kV class for transmission infrastructure supporting renewable power evacuation projects as part of TBCB in India.
• In February 2025, Eaton, an intelligent power management company, is working to address the unprecedented supply and demand challenges for transformers, as well as the demand for its solutions from utility, large commercial, industrial, and data center customers. The company is investing USD 340 million to enhance the production of three-phase transformers, which are critical for reliable electrical power in the U.S.
• In July 2024, KONČAR Inc. and Siemens Energy entered into a Joint Venture Agreement. KONČAR – Transformer Tanks (KTK) will specialize in producing transformer tanks. The goal of this strategic partnership is to enhance production capacity, facilitate sales to Siemens Energy on a portion of future capacity, increase collaboration in exchange for knowledge and expertise, mitigate risk, and expand the global supply of transformer tanks. KONČAR Transformer Tanks will be a joint company, with KONČAR owning 60% and Siemens Energy owning 40%. Transformer tanks are critical components for a successful energy transition, and this collaboration will create a manufacturing plant for these tanks at KONČAR's location in Sesvetski Kraljevec, Croatia.

REPORT COVERAGE 

The global transformer market analysis provides an in-depth study of the market size & forecast by all the market segments included in the report. It includes details on the market dynamics and market trends expected to drive the market in the forecast period. It offers information on the technological advancements, new product launches, key industry developments, and details on partnerships, mergers & acquisitions. The market research report also includes a detailed competitive landscape, providing information on market share and profiles of key operating players.

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Report Scope & Segmentation