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Standing at the starting point of 2026, we must first recognize a crucial fact: the power transmission and transformation equipment industry is no longer playing the traditional role of “infrastructure support”; rather, it is emerging as a strategic solution to the global “computing power crisis” and “energy security.”

Over the past year, many people have asked whether the market is overheated. Let me share three sets of hard data with you: This isn't a short-term hype—it’s the starting point of a supercycle that will span “decades.”

Part One: The Current Situation—A Song of Ice and Fire: Where Do We Stand?

1. International Situation: Evolving from a “trader going global” to a “supplier filling supply gaps”

The world is experiencing a silent “power shortage crisis.”

Supply side: Power grids in Europe and the U.S. have been operating beyond their designed lifespan for over 40 years, leading to a shortage of local skilled technicians. In North America, the dependence on imported power transformers has reached as high as 80%, and delivery cycles have stretched to over 100 weeks. The supply gap won't begin to ease until 2028.

  Demand side: AI computing power has become a new “load black hole.” According to forecasts by the International Energy Agency, global data center electricity consumption will double by 2026. Leading U.S. cloud providers have already raised their projected computing power investments for 2033 to 250 GW, directly boosting demand for 230-500 kV substations.

Conclusion: In 2025, China’s total transformer exports reached 64.62 billion yuan, up 35.9% year-on-year, with exports to Europe soaring by 138%. This is not merely about selling products—it reflects how China’s supply chain is becoming the “second heart” for the aging power grids of the West.

2. Domestic Situation: Total output continues to grow steadily, but profits are increasingly concentrated in “structural gaps.”

Total: In 2025, the market size for domestic power grid equipment companies has exceeded 2 trillion yuan, representing a year-on-year increase of 15%.

The most critical qualitative change: The State Grid’s investment plan for the 15th Five-Year Plan is expected to reach 4 trillion yuan, representing a 40% increase over the 14th Five-Year Plan. However, this 4 trillion yuan will not be distributed indiscriminately; rather, it will be precisely targeted and carefully allocated.

Cruel Differentiation: In 2025, State Grid’s tender for transmission and transformation equipment reached 91.9 billion yuan, representing a 26% increase; however, tenders for smart meters declined by 40%. What does this indicate? Funds are shifting from metering devices aimed at ensuring universal household coverage to the backbone grid for “power transmission from west to east” and high-voltage equipment designed to address critical bottlenecks.

Summarize the current situation: The world is scrambling for transformers, while China is ramping up its ultra-high-voltage infrastructure. Mediocre products will be phased out, and equipment that effectively addresses both “high-power transmission” and “high-reliability switching” is becoming a highly sought-after commodity.

Part Two: Development Direction for 2026—Four Certain Growth Tracks

2026 marks the beginning of the 15th Five-Year Plan and also represents a turning point in the technology roadmap—from asking “whether we have it” to asking “how good it is.” We absolutely must grab a share of these four pools:

1. Ultra-High Voltage and the Backbone Network: It’s not just about construction—it’s about “upgrading.”

Five ultra-high-voltage DC transmission lines are expected to be approved in 2026 (including Shaanxi-Henan and Badain Jaran-Sichuan, among others).

Key changes: For transformers and switchgear rated above 750 kV, the competition is no longer about price—it’s now about short-circuit withstand capability and performance in high-altitude operating environments. In this area, our technological reserves must step up and demonstrate their full strength.

2. Smart Distribution Networks: A “Gold Mine” for Replacing Existing Infrastructure

Over 2 million aging switchgear units nationwide have entered the replacement window period of 15 to 20 years.

Wind vane: By the end of 2025, the second round of regional joint procurement will see equipment unit prices rebound by 10% to 30%. In 2026, distribution network equipment is set to experience both rising volumes and higher prices, particularly for integrated primary-and-secondary equipment and eco-friendly gas-insulated switchgear.

3. AI Data Center Power Supply: From “Optional” to “Essential”

This is the biggest expectation gap for 2026.

As the power per single cabinet climbs to 600 kW–1 MW, the traditional power supply architecture is collapsing.

2026 will be the year of prototype validation for solid-state transformers (SSTs). Whoever can develop a DC power supply solution that’s “copper-saving, space-efficient, and delivers millisecond-level response” will be able to shed the label of “traditional manufacturing” and earn the valuation typically associated with tech stocks.

4. Going overseas: From “Asia, Africa, and Latin America” to the “heart of Europe and America”

In the past, when we went overseas, we sold at low prices; by 2026, the logic will be to sell at a high premium.

The bottleneck in Europe and the U.S. isn't money—it's capacity and labor. As long as we can obtain certifications such as KEMA (Netherlands, a global energy consulting, testing, and certification organization), CE (the EU’s mandatory safety certification), and UL (Underwriters Laboratories, U.S.), and deliver products 20 weeks faster than Siemens, that’s where our profit margin lies.

Part Three: Response Measures for Manufacturing Enterprises—How Will We Fight in 2026?

The situation is looking extremely promising, yet why do so many of our peers still feel anxious? Because demand is concentrated at the high end, while supply remains stuck at the low end. To avoid being left behind in this supercycle, we must launch three key initiatives by 2026:

First Battle: “Pierce the Heavens” with R&D Resources—Focusing on 750kV+ and SST ( Solid-state transformer

High-pressure field: Establish the “Ultra-High Voltage Supporting Special Task Force.” In 2026, State Grid’s bidding focus has shifted to 750kV transformers and gas-insulated switchgear, with year-on-year growth exceeding 75%. We must secure real-world operational performance at higher voltage levels; otherwise, in three years we’ll be completely phased out of the core supply chain of central state-owned enterprises.

New technology field: Even if we don’t make a profit this year, we must get the prototype of the solid-state transformer (SST) up and running. We’ll engage with design institutes and participate in the pilot project for 800V high-voltage DC systems. It’s not about how many units we sell—rather, it’s about ensuring that, when our customers next discuss technical solutions, we’ll be qualified to sit at the negotiating table.

Second Battle: Building a System That “Roots Downward”—Trading “Lead Time” for “Premium Pricing”

Right now, the biggest pain point for overseas orders isn't the price—it's how long it’ll take to deliver.

2026 Production Keywords: Flexible scheduling For export orders, establish a dedicated product line for overseas markets.

Supply chain: We must not stop verifying the localization of core components—such as high-speed arc-extinguishing chambers and high-permeability silicon steel sheets. This isn’t about saving money; it’s about ensuring we have a second supplier to guarantee supply when raw material prices fluctuate.

Third Battle: Market Strategy—“Fighting on Both Fronts”—Prioritizing Cash Flow Domestically While Pursuing High Profits Overseas

Domestic market: We’re aggressively pursuing the sixth and first batches of transmission and transformation projects slated for bidding in the initial year of the 15th Five-Year Plan. We’re closely monitoring supporting DC projects such as the Shaanxi-Henan and Southern Xinjiang-Chongqing-Sichuan links. These projects will serve as crucial stabilizers, ensuring full capacity utilization over the next one to two years.

Overseas markets: In 2026, we’ll fully shift our resources toward the high-end markets in Europe and the U.S. Even if certification cycles are lengthy or factory inspection standards are stringent, once a company makes it onto the shortlist, it’s guaranteed to secure stable repeat purchases over the next 3 to 5 years.

Dear colleagues:

The golden age of electrical equipment has never been a smooth, tranquil journey marked by gentle breezes and light rains—rather, it’s in the moments when the power grid’s architecture is fractured and reassembled that whoever can offer the most reliable switch or coil will shine brightest.

In 2026, we will define our brand with the advanced technology of ultra-high voltage, seize profits by accelerating our overseas delivery efforts, and secure our future by breaking new ground in data center applications.

Now that the wind is here, let’s be the ones who set sail the fastest.