Transformer Manufacturing Market Analysis APAC, North America, Europe, South America, Middle East and Africa - US, China, India, Germany, Canada, South Korea, Japan, Brazil, UK, France - Size and Forecast 2024-2028

Transformer Manufacturing Market Size 2024-2028

The transformer manufacturing market size is forecast to increase by USD 14.4 million, at a CAGR of 4.8% between 2023 and 2028.

• The market is experiencing significant growth, driven primarily by the increasing electricity demand worldwide. As populations and economies expand, there is a corresponding rise in energy consumption, leading to a surge in demand for transformers. Additionally, the integration of renewable energy sources into the power grid is another key driver for the market. Renewable energy, such as wind and solar, often requires specific transformers to convert and distribute electricity effectively. However, the market is not without challenges. Fluctuations in the prices of raw materials, particularly steel and copper, pose significant risks to manufacturers. These materials are essential components of transformers, and price volatility can impact profitability.
• Furthermore, the industry faces the challenge of meeting stringent environmental regulations, particularly with regards to the disposal of transformer oil. Producers must invest in research and development to create more eco-friendly solutions, or face potential regulatory penalties. Companies seeking to capitalize on market opportunities must navigate these challenges effectively, focusing on cost management, innovation, and regulatory compliance.

What will be the Size of the Transformer Manufacturing Market during the forecast period?

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The market continues to evolve, driven by the dynamic interplay of various factors. Voltage regulation devices and load management systems are integral components, ensuring optimal power delivery across diverse sectors. Transformers, with their magnetic cores and winding techniques, undergo rigorous testing to meet transformer standards, including IEC and ANSI. Transformer design innovations, such as high-flux density cores and forced air cooling, enhance efficiency and performance. Fire-resistant fluids, like vegetable oil, contribute to safety, while copper and aluminum winding methods optimize power rating. Transformer recycling is a growing concern, with high-potential tests and electromagnetic simulations guiding the process. Power factor correction and impedance measurement are essential for maintaining optimal power quality.

Smart transformers and low-voltage transformers are increasingly popular, integrating digital monitoring and transformer core advancements. Core loss, hysteresis loss, and insulation resistance tests ensure quality control. Transformer manufacturing processes incorporate finite element analysis and condition monitoring, enabling continuous improvement. Cooling systems, from oil-filled to cast resin, adapt to various applications. Single-phase and three-phase transformers cater to diverse power requirements, with short circuit ratings ensuring safety. Transformer lifecycle management, including transformer maintenance and tap changer systems, ensures longevity and efficiency. The market's continuous evolution reflects the ongoing need for advanced, reliable, and efficient transformer solutions.

How is this Transformer Manufacturing Industry segmented?

The transformer manufacturing industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Type
  • Power transformers
  • Distribution transformers
  • Others
• Application
  • Utilities
  • Industrial and commercial
  • Residential
  • Others
• Geography
  • North America
    • US
    • Canada
  • Europe
    • France
    • Germany
    • UK
  • APAC
    • China
    • India
    • Japan
    • South Korea
  • South America
    • Brazil
  • Rest of World (ROW)

By Type Insights

The power transformers segment is estimated to witness significant growth during the forecast period.

The market experiences significant activity, with power transformers holding a pivotal role due to the escalating need for dependable and efficient power transmission solutions. In January 2022, General Electric (GE) secured several contracts to provide low-maintenance power transformers for various international projects. These transformers are designed to deliver superior performance with minimal upkeep, catering to the evolving requirements of grid operators during the energy transition. One such project involves the Scottish distribution network upgrade at Kintore, where GE is supplying two large auto transformers for the Kintore substation. These transformers are instrumental in integrating renewable energy sources into the grid, expanding its capacity to handle fluctuating power outputs from renewable generation.

Transformer manufacturing processes encompass various aspects, including voltage regulation devices, load management, and overcurrent protection. Transformers come in various types, such as distribution, dry-type, oil-filled, and cast resin, each with distinct features. Transformer testing, adherence to standards like IEC and ANSI, and quality control are crucial elements in the manufacturing process. Winding techniques, core assembly, and cooling systems are also essential factors. Digital monitoring, power factor correction, and smart transformers are emerging trends in the market. Transformers employ various cooling methods, including forced air cooling and cooling fins, and use different insulation applications. Transformers can be filled with mineral oil or fire-resistant fluid and feature high-flux density cores.

Core loss, hysteresis loss, and impedance measurement are essential considerations in transformer design. Transformer maintenance is crucial for ensuring optimal performance and longevity. Transformers undergo various tests, such as load tests, turn ratio tests, and high-potential tests, to assess their condition and identify potential issues. Transformer recycling is an essential aspect of the market, with transformer oil being reclaimed and reused. The market is dynamic, with continuous advancements in technology and evolving customer needs shaping its trends. Transformers play a vital role in power transmission, and their design and manufacturing processes are intricately linked to the global energy landscape.

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The Power transformers segment was valued at USD 23.20 million in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

North America is estimated to contribute 33% to the growth of the global market during the forecast period.Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market is witnessing significant growth, particularly in the Asia Pacific region, with India being a key focus area. Driven by advancements in renewable energy capacity, India surpassed 200 GW of renewable energy capacity in October 2024, a critical step towards its goal of 500 GW from non-fossil sources by 2030. This growth is underpinned by the Central Electricity Authority's report of a 13.5% increase in renewable energy-based electricity generation capacity, reaching 203.18 GW in October 2024, up from 178.98 GW in October 2023. Transformers play a crucial role in this energy transition, ensuring voltage regulation, load management, and overcurrent protection.

Transformer manufacturing processes involve intricate design, from transformer core assembly to winding techniques, using materials such as magnetic cores, cooling fins, and insulation applications. Quality control is paramount, with adherence to standards including IEC and ANSI. Transformer testing is essential to ensure optimal performance, with methods such as insulation resistance tests, finite element analysis, and high-potential tests. Transformer lifecycle management is another essential aspect, with transformer maintenance, recycling, and condition monitoring all critical to maximizing transformer efficiency and longevity. Transformer designs include oil-filled transformers, dry-type transformers, and smart transformers, with power ratings ranging from low-voltage to high-voltage.

Transformers are also subjected to various tests, including load tests, turn ratio tests, and on-load tap changer tests, to ensure their performance under various conditions. Materials used in transformer manufacturing include mineral oil, vegetable oil, and fire-resistant fluids, while cooling systems employ forced air cooling and cooling fins. Transformer cores are made from high-flux density cores, amorphous cores, or high-potential cores, depending on the specific application. Transformer manufacturing processes involve intricate design and engineering, with electromagnetic simulation, power factor correction, and hysteresis loss calculations all essential components. The market is continually evolving, with advancements in transformer technology, including the development of smart transformers and the integration of digital monitoring systems.

Market Dynamics

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

What are the key market drivers leading to the rise in the adoption of Transformer Manufacturing Industry?

• The primary catalyst for the market's growth is the rising demand for electricity. 

• The market is experiencing notable growth due to the increasing electricity demand worldwide. According to recent research, electricity consumption is projected to rise by approximately 4% in 2024, up from around 2.5% growth in 2023. This growth can be attributed to several factors, including robust economic expansion in various regions, leading to increased industrial and commercial activities. Additionally, extreme weather conditions, such as heatwaves, are driving the demand for electricity to power cooling systems and maintain comfortable indoor environments. Another significant factor fueling market growth is the transition towards electric technologies. As more industries and consumers adopt electric vehicles and renewable energy sources, the need for reliable and efficient transformers is becoming increasingly important.
• To ensure the quality and safety of transformers, manufacturers employ various techniques, such as finite element analysis and insulation resistance testing. Compliance with industry standards, including IEC and ANSI, is also crucial to meet regulatory requirements and customer expectations. Transformer maintenance practices, including turn ratio tests, load tests, and on-load tap changer inspections, are essential to ensure optimal performance and longevity. Winding techniques, such as cast resin and dry-type transformers, are also gaining popularity due to their insulation properties and environmental benefits. High-voltage transformers, which use mineral oil as a cooling medium, continue to dominate the market due to their efficiency and reliability.
• However, the market is also witnessing the emergence of transformers using alternative cooling mediums, such as gas and liquid nitrogen, to address environmental concerns and improve efficiency. In conclusion, the market is poised for significant growth, driven by increasing electricity demand, economic expansion, extreme weather conditions, and the transition towards electric technologies. Manufacturers must prioritize quality, safety, and innovation to meet the evolving needs of the industry and their customers.

What are the market trends shaping the Transformer Manufacturing Industry?

• Renewable energy integration is an emerging market trend that reflects a growing commitment to sustainable energy sources. As professionals in the industry, we recognize the importance of this shift and are dedicated to staying informed about the latest developments.

• The market is witnessing notable growth due to the increasing integration of renewable energy sources worldwide. Renewable energy capacity is projected to expand by approximately 2,400 GW from 2022 to 2027, representing a significant increase of around 85% compared to the previous five years. By 2025, renewable energy is anticipated to surpass coal as the largest source of global electricity generation. The share of renewables in the global power mix is forecasted to rise from around 28% in 2022 to around 38% by 2027. Transformer design is evolving to meet the demands of this renewable energy revolution. High-flux density cores, copper and aluminum windings, forced air cooling, and fire-resistant fluids are becoming increasingly common in transformer manufacturing.
• Advanced technologies such as power factor correction, electromagnetic simulation, smart transformers, and impedance measurement are also gaining popularity. Transformer recycling is another crucial aspect of the market, as the industry seeks to minimize waste and promote sustainability. Transformer manufacturing companies are focusing on enhancing the short circuit rating and overall robustness of their products to meet the demands of the evolving power grid. High-potential tests are essential to ensure the safety and reliability of transformers in the face of increasing power demands and voltage fluctuations. The transformer market is expected to continue its growth trajectory as the world transitions to a more sustainable and technologically advanced energy future.

What challenges does the Transformer Manufacturing Industry face during its growth?

• The volatile pricing of raw materials poses a significant challenge to the industry's growth trajectory. 

• The market encounters substantial challenges due to the volatility in raw material prices, primarily steel. Between 2015 and 2023, steel prices fluctuated significantly, ranging from an average of USD452 per ton to a peak of USD1,612 per ton. In 2023, the average price settled at USD886 per ton, illustrating the considerable price swings over the past few years. The initial decrease in demand during 2020 resulted in a decline in prices. However, a robust recovery in late 2021 led to a surge in prices as supply struggled to meet renewed demand. Geopolitical events, such as the war in Ukraine, also caused pig iron supply concerns, resulting in historic price spikes.
• Core loss, including hysteresis loss and eddy current loss, is a critical factor in transformer manufacturing processes. Transformers, whether single-phase or three-phase, require precise insulation applications and effective cooling systems to ensure optimal performance. IEEE standards play a crucial role in ensuring the quality and safety of transformer manufacturing. Condition monitoring is essential to maintaining transformer health and preventing potential failures. Transformer oil is another essential component, requiring careful handling and maintenance to ensure the transformer's longevity. In conclusion, the market faces ongoing challenges due to raw material price volatility and the need for adherence to stringent industry standards.

Exclusive Customer Landscape

The transformer manufacturing market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the transformer manufacturing market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, transformer manufacturing market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.

ABB Ltd. - This company specializes in the production and distribution of various transformer types, including dry-type distribution transformers, oil-immersed distribution transformers, and traction transformers, among others. Our transformer solutions cater to diverse industries and applications, delivering optimal efficiency and reliability. By leveraging advanced engineering techniques and innovative materials, we ensure our transformers meet stringent industry standards and exceed customer expectations. Our commitment to research and development drives continuous improvement, enabling us to stay at the forefront of transformer technology.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• ABB Ltd.
• Bharat Heavy Electricals Ltd.
• Celme Srl
• CG Power and Industrial Solutions Ltd.
• Eaton Corp plc
• EL Sewedy Electric Co.
• ERMCO
• GE Vernova Inc.
• Hammond Power Solutions Inc.
• Hitachi Energy Ltd.
• Hyosung Heavy Industries Corp.
• Hyundai Electric and Energy Systems Co. Ltd.
• MPS Industries Inc.
• Ormazabal
• Siemens Energy AG
• Toshiba Corp.
• Triad Magnetics
• Voltamp Transformers Ltd

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Recent Development and News in Transformer Manufacturing Market

• In February 2023, Siemens Energy and Mitsubishi Power agreed to a strategic collaboration to jointly develop and market hydrogen-ready gas turbines and transformers, aiming to reduce carbon emissions in the power generation sector (Siemens Energy press release, 2023). This partnership represents a significant strategic move in the market, as companies increasingly focus on sustainable energy solutions.
• In May 2022, ABB announced the launch of its Ability™ Digital Twin for transformers, a cloud-based solution that enables predictive maintenance and optimization of transformer performance (ABB press release, 2022). This technological advancement is a key development in the market, as digitalization and automation become increasingly important for enhancing operational efficiency and reducing downtime.
• In January 2021, Hitachi ABB Power Grids secured a USD2.3 billion order from State Grid Corporation of China for the supply of 1,100 MVA transformers, marking a significant geographic expansion and a major win for the company in the Chinese market (Hitachi ABB Power Grids press release, 2021). This large-scale order underscores the growing demand for transformers in emerging markets and the importance of strategic partnerships and strong market presence in these regions.
• In March 2020, General Electric (GE) announced the acquisition of Bharat Heavy Electricals Limited's (BHEL) transformer business, expanding GE's presence in the Indian transformer market and strengthening its global position (GE press release, 2020). This merger represents a significant strategic move for GE, as it seeks to expand its footprint in high-growth markets and capitalize on the increasing demand for transformers in the renewable energy sector.
• These developments demonstrate the dynamic nature of the market, with a focus on strategic partnerships, technological advancements, geographic expansions, and mergers and acquisitions shaping the industry landscape.

Research Analyst Overview

• The transformer market encompasses various applications, including power generation, transmission, distribution, renewable energy integration, industrial automation, microgrids, and data centers. Transformer market share is influenced by factors such as transformer efficiency standards, industry regulations, and transformer protection relays. Transformer market growth is driven by the increasing demand for transformer security, reliability, and noise reduction. Transformer pricing strategies are shaped by market trends, including the integration of smart grid technologies and transformer design software. Transformer manufacturing cost is a critical consideration in the transformer industry, with ongoing efforts to innovate materials and improve supply chain management.
• Transformer fault analysis is essential for ensuring transformer industry trends, such as transformer efficiency and transformer reliability, remain at the forefront. Transformers play a vital role in the transition to renewable energy sources and the development of sustainable energy infrastructure.

Dive into Technavio’s robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Transformer Manufacturing Market insights. See full methodology.

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What are the Key Data Covered in this Transformer Manufacturing Market Research and Growth Report?

• CAGR of the Transformer Manufacturing industry during the forecast period
• Detailed information on factors that will drive the growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market and its contribution of the industry in focus to the parent market
• Accurate predictions about upcoming growth and trends and changes in consumer behaviour
• Growth of the market across APAC, North America, Europe, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the transformer manufacturing market growth of industry companies

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