Hammond Power Solutions Texas: USD 36 M Fort Worth Plant Build
1. Hammond Power Solutions Project Background: Another Capacity Build Inside the North American Transformer Shortage
1.1 The player and the deal
Hammond Power Solutions (HPS), a Canadian manufacturer of magnetics and transformers, announced on 23 September 2026 that it will invest approximately USD 36 million in a new transformer manufacturing plant in Fort Worth, Texas. The site will be secured under a long-term lease, with production ramping in stages from Q4 2027 and reaching full operation in Q1 2028.
1.2 Where this fits in the current North American capex cycle
The Fort Worth announcement sits inside a 12-month wave of transformer-related capacity builds in North America. Hitachi Energy committed USD 528 million to a Mississippi facility earlier in September 2026, Eaton announced a USD 242 million modular electrical enclosures plant in Arkansas in early September, and Hyosung booked a USD 286 million order book for US data-centre transformers in mid-September. HPS’s Fort Worth project extends the same rhythm and confirms that North American power-equipment supply is being rebuilt in a distributed, data-centre-led pattern.
1.3 Why Fort Worth
Fort Worth sits inside the northern Texas power corridor, adjacent to the ERCOT control area and the southern PJM data-centre cluster. The location allows HPS to serve on-site customers directly, and to shorten delivery distances from its existing Canadian and Mexican operations into the southern US market, hedging cross-border supply-chain risk at a time when tariff policy is volatile.
For a comparable case study in North American large-power transformer capacity expansion, see our coverage of the Hitachi Energy Mississippi USD 528 million transformer factory plan.
2. Capacity Disclosure: Two Numbers Worth Reading Carefully
2.1 Initial phase: USD 177.3 M annual run-rate
According to HPS, the Fort Worth plant’s initial phase will add approximately USD 177.3 million of annual manufacturing capacity. The disclosure uses a revenue run-rate basis, not MVA or unit count. Revenue-based disclosure is common among mid-sized North American transformer makers because it smooths product-mix differences, but readers should keep a reasonable band of uncertainty when interpreting the number.
2.2 Long-term potential: USD 283–284 M annual run-rate
In the same disclosure HPS states that, at full load plus follow-on expansion, the Fort Worth site could ultimately support approximately USD 283–284 million of annual capacity. That implies a further ~60% upside versus the initial phase, and signals that HPS has reserved one to two expansion stages on the same footprint. The plant will produce standard and custom-engineered transformers, with downstream focus on data centres, mining, steel, commercial construction and wind.
3. Product Mix: Standard + Custom-Engineered
For broader coverage of the North American transformer supply-chain build-out, see our archive on transformer industry developments.
3.1 Standard transformers: defending the mid-low voltage base
HPS has long served commercial construction, light industry and renewables with standard transformer lines. Including standard products at Fort Worth signals an intent to defend mid-low voltage distribution share against a 2024 IEEE C57.12.00 refresh and the DOE 2025 efficiency update — both of which are forcing fleet replacement across North America.
3.2 Custom-engineered transformers: the data-centre and heavy-industry battleground
The Fort Worth plant will also take custom-engineered orders targeting data centres, mining, steel and wind. These four segments share three traits: high single-unit ratings, heavy non-recurring engineering, tight delivery windows, and high dependence on the manufacturer’s engineering bench. With North American hyperscale campuses now routinely scaling into the gigawatt range, suppliers that can deliver 1–10 MVA custom dry-type units are sitting at the most advantaged position of the current order overflow.
3.3 Wind perspective
Wind is the fifth segment explicitly named for the Fort Worth plant. With US onshore wind expected to add more than 30 GW of interconnection between 2025 and 2027, pad-mount step-up transformers and in-field distribution units will keep pulling forward demand. A Texas-located plant gives HPS a much shorter service radius into both ERCOT wind farms and central-PJM wind clusters.
For an industry perspective on conductor selection criteria relevant to mid-voltage transformer winding design, see the related coverage on choosing the right enameled wire for motor and transformer applications.
4. Strategic Logic: A Case Study in North American Supply-Chain Rebuilding
4.1 Shorter delivery radius
HPS explicitly stated that the Texas location will reduce delivery distances compared with its existing Canadian and Mexican operations. In a market where North American transformer lead times remain stuck in the 80–150 week range, regionalising capacity is one of the few levers that can ease delivery pressure without first adding new factories.
4.2 Long-term lease: a cautious capital allocation
It is worth noting that HPS chose a long-term lease rather than freehold construction for its USD 36 million outlay. Leasing keeps capital employed low, limits upfront cash outflow, and gives the company an option to flex footprint as demand evolves. The trade-off is giving up real-estate appreciation and absorbing long-term rent escalation. For a mid-sized transformer maker in the middle of an expansion cycle that still needs cash flexibility, long-term lease is the more disciplined form of expansion.
4.3 How this compares with peer expansions
| Manufacturer | Date | Capex / order value | Location | Focus |
|---|---|---|---|---|
| HPS | 2026-09 | USD 36 M | Fort Worth, TX | Standard + custom-engineered |
| Hitachi Energy | 2026-09 | USD 528 M | Mississippi | Large power transformers |
| Eaton | 2026-09 | USD 242 M | Arkansas | Modular electrical enclosures |
| Hyosung | 2026-09 | USD 286 M (order) | USA | Data-centre transformers |
The current North American build-out is shaped by a parallel heavy-asset and light-asset expansion: Hitachi Energy targets gigawatt-class large transformers with a heavy-asset model, Eaton targets mid-low voltage enclosures with modular lines, and HPS and Hyosung use engineering capability to enter data-centre and heavy-industry segments.
5. Industry Impact and Outlook
5.1 Lead-time implications
Once the Fort Worth plant reaches full operation in Q1 2028, it can theoretically release supply equivalent to USD 283–284 million of annual revenue, or roughly 1.5%–2% of the current North American mid-low voltage transformer market. That will not change the 80–150 week lead time in the short term, but it can begin to ease mid-low voltage segment tightness from the second half of 2028 onward.
5.2 Downstream impact on data-centre supply
For North American data-centre owners, the Fort Worth plant adds a third domestic mid-voltage transformer source alongside Hitachi Energy’s Mississippi facility and Hyosung’s US order book. A multi-supplier structure directly helps cap data-centre CAPEX inflation and reduces single-point-of-failure exposure.
5.3 Indirect impact on Chinese transformer exports
Once Fort Worth is operational, North American import substitution for mid-low voltage transformers will accelerate further. With the US maintaining a 25% Section 301 tariff on Chinese power transformers since 2024 and USTR extending GOES grain-oriented electrical steel safeguards (see the September 2026 EU GOES safeguard coverage), the window for Chinese suppliers in the North American mid-low voltage market will continue to narrow. Related capacity will need to be redirected toward the Middle East, Southeast Asia and Africa.
6. Closing Note
Hammond Power Solutions’ USD 36 million Fort Worth investment is a mid-sized but representative move inside the 2026 North American transformer expansion wave. By combining long-term lease, a standard-plus-custom product mix and a regionalised delivery radius, it directly addresses the surge in demand from data centres and heavy-industry customers. In the short term the project will not immediately relieve North American transformer tightness; over the medium term, however, it will sit alongside Hitachi Energy, Eaton and Hyosung as one of the load-bearing pillars of the shift from a Canada-Mexico-import model to a multi-site US-domestic supply base.