Amid the global surge in AI data center construction, reported delays in third-party data center projects in the US have highlighted hidden infrastructure bottlenecks resulting from aging power grids and supply chain constraints.
Owing to the massive demand for AI-related power systems, Fortune Electric has seen a sharp rise in export orders, which accounted for more than 50% of the company's total sales in the first half of 2025. To meet rapidly growing demand for large power transformers, the company recently approved a capital expenditure expansion of NT$2.5 billion (US$80.4 million), which will be used to expand its Taichung plant, according to company president Ted Hsu. The expansion contract will be awarded by the end of 2025, with production slated to begin in the second quarter of 2027.
Neocloud supplier CoreWeave has lowered its 2025 revenue forecast to US$5.05–5.15 billion due to delays in third-party data center developments, signaling that shortages of key components and equipment are slowing the expansion of AI infrastructure, with transformers in particular being in short supply.
Transformers are essential for vast markets like the US, as electricity is converted to high voltage for long-distance transmission, then stepped down for use by data centers or consumers. However, more than 55% of transformers in the US have been in service for more than 33 years, creating huge replacement needs amid insufficient domestic capacity. Approximately 80% of transformers are imported from Mexico, China, and Canada.
To mitigate supply chain risks, the US government has designated transformers as strategic defense materials and sought to promote local manufacturing through the Defense Production Act and tax credits. In conjunction with recent tariff policies, these developments have led major global players, such as Hitachi Energy, Eaton, and HD Hyundai Electric, to announce expansions or new production lines in the US.
After becoming the first Taiwanese company to secure a US Stargate project order in 2024, Fortune Electric has delivered its initial shipment of transformers and is negotiating a second-phase deal. The planned Taichung plant expansion aims to address the US market's shortage of large transformers, representing a proactive move to capture future orders.
Fortune Electric's Taichung Port factory is the only facility in Southeast Asia capable of producing 500 kV ultra-high-voltage transformers. Originally a joint venture with Hitachi, Fortune acquired full ownership in 2019. It now serves as the company's main base for exporting large transformers to the US.
Article translated by Elaine Chen and edited by Jerry Chen
