The global electrical manufacturing industry is experiencing a demand surge unlike anything seen in a generation.

Renewable energy integration, EV market growth, data centre expansion and years of underinvestment in grid infrastructure have converged to place unprecedented pressure on the transformer market and the wider power sector.

At the centre of this tension sits a structural paradox. Global Tier 1 OEM capacity technically exists to meet demand, yet production continues to lag behind orders. Lead times for power transformers have stretched beyond 30 months in many markets. In parts of Europe, delivery timelines for large units now push past four to five years. The backlog is real, and it is costing utilities, EPCs and industrial operators both time and capital.

This is not simply a Tier 1 capacity issue. It is a value chain depth issue. And that is where Tier 2 suppliers can redefine their role.

At CWIEME Berlin 2026, the global meeting place for transformer, motor, grid operator, distribution, and e mobility innovators, these supply chain realities will take centre stage.
 

The global bottleneck: what the transformer market data shows

According to PTR Inc. research, global demand for power transformers is expected to grow at a CAGR of 6.3% between 2024 and 2027, rising from 1.98 million MVA to approximately 2.38 million MVA.

On paper, global OEM production capacity stands at around 3.25 million MVA. Yet actual output still lags demand by around 2% due to:

• Manufacturing bottlenecks

• Raw materials shortages

• Skilled labour shortages

• Testing capacity constraints

• Logistics friction

Manufacturers have announced USD 828.9 million in capacity expansion commitments, with the US accounting for 67% of that total. But new capacity takes years to deliver, and expanding Tier 1 output alone will not resolve fragility across electrical steel, copper, insulation materials and critical transformer components.

In 2025, supply demand dynamics in the transformer market was one of the most attended sessions at CWIEME Berlin. In 2026, discussions will go further, focusing on lead time reduction, material security, winding automation and delivery risk reduction.
 

APAC: the production engine under pressure

Asia Pacific accounts for approximately 40% of the global transformer market.

The region’s cumulative demand between 2024 and 2027 is projected at 5.5 million MVA. At the same time, the global MV distribution transformer market is forecast to reach USD 20 billion by 2027, with APAC growing at over 6% CAGR.

China and India dominate distribution transformer demand, while Southeast Asia is expanding through industrial electrification, EV charging infrastructure and renewable energy integration.

For Tier 2 suppliers across processed materials, magnetic materials, winding systems, insulation materials and quality testing equipment, this growth is not peripheral. It directly influences factory throughput, quality at scale and standardised platforms.

CWIEME Berlin reflects this entire value chain, from raw materials and intermediate products to transformer components, power supplies and test and measurement systems.

India: a defining Tier 2 opportunity

India represents one of the most scalable Tier 2 growth frontiers.

With a 500 GW renewable energy target by 2030 and large-scale grid expansion underway, transformer demand across voltage segments continues to accelerate.

A number of independent manufacturers are investing in automation, certifications and higher voltage capability. For procurement leaders focused on supply chain diversification and material security, India is increasingly part of the primary qualification discussion.

At CWIEME Berlin 2026, transformer OEMs, electrical steel suppliers, conductor manufacturers and insulation providers will share practical strategies for scaling output without compromising reliability.
 

China and the broader APAC Tier 2 landscape

China’s Tier 2 transformer manufacturing base operates at exceptional scale, with around 30 large power transformer manufacturers.

At the same time, geopolitical supply chain risk and reshoring manufacturing strategies are driving global buyers to qualify alternative suppliers across India, Vietnam and Thailand.

For Tier 2 manufacturers in magnetic materials, permanent magnets, coil winding technology and transformer accessories, the shift is clear. The opportunity lies in moving from transactional supply to early supplier involvement in specification and co development.

CWIEME Berlin creates that access point.

In 2025 alone, a visitor footfall of 5,800+ and 490+ exhibitors came together in Berlin. 83% of Engineering, Procurement and R&D attendees were involved in purchasing decisions, and 74% were actively evaluating or looking to buy components, raw materials or process machinery within 12 months.

This is where supplier conversations translate into orders.

Four strategic moves that separate leaders from followers

1. Specialise rather than commoditise
High growth segments such as amorphous core transformers, cast resin dry type units, HVDC compatible components and smart transformer platforms demand engineering depth.

Specialisation moves suppliers beyond price competition and into long term specification discussions.

2. Shift from transactional supply to co-development
OEMs increasingly require early supplier involvement across design for manufacture, insulation systems, coil winding automation and thermal modelling.

Embedding into R&D discussions reduces delivery risk and strengthens margin protection.

3. Certify for future markets
IEC compliance, ISO 50001, RoHS, REACH and carbon traceability are now baseline expectations in many European supply chains.

Those who act now will be positioned when procurement consolidation intensifies in 2027 and beyond.

4. Build regional resilience
Multi geography APAC presence strengthens European supply chain resilience and mitigates delivery risk.

These themes align directly with CWIEME Berlin’s expansion into transmission and distribution, grid infrastructure and monitoring technologies.

The window is open

Grid modernisation, electrification of transport, renewable energy integration and industrial decarbonisation are structural forces.

The transformer supply bottleneck will not disappear overnight. But procurement teams will consolidate around capable, reliable partners once capacity stabilises.

For Tier 2 manufacturers, the next five years represent a genuine inflection point.

CWIEME Berlin 2026, the world’s largest coil winding and electrical manufacturing exhibition, is where these partnerships begin. It is where the entire industry comes together to address manufacturing bottlenecks, improve delivery reliability and strengthen European supply chains.
 

Author

Saifa Khalid
Director Research EMEAPAC at PTR Inc