On January 13, China's A-share market's three major indices corrected collectively, while the power grid equipment sector saw unusual movements in the afternoon. Several transformer concept stocks rose strongly. Sanbian Science & Technology Co., Ltd. (002112.SZ) and Tebian Electric Apparatus Stock Co., Ltd. (600089.SH) surged straight to their daily limit. XD Electric Co., Ltd. (601179.SH) briefly touched the daily limit. Yineng Power Co., Ltd. (920046.BJ) soared nearly 30% before paring gains to 20.06%. Anker PowerDoe Co., Ltd. (300617.SZ) rose more than 17% and then pulled back, closing up 10.84%. Canna Power Co., Ltd. (920299.BJ) closed up 13.76%. A number of other stocks followed suit, including Zhongneng Electric Co., Ltd. (300062.SZ), Baoding Tianwei Baobian Electric Co., Ltd. (600550.SH), Igor Co., Ltd. (002922.SZ), Jinpan Technology Co., Ltd. (688676.SH), Huatong Wire & Cable Co., Ltd. (605196.SH), and Jiangsu Huachen Electric Co., Ltd. (603097.SH). On the same day, the Power Grid Equipment ETF (159326) rose 2.83%.
Both Tebian Electric and XD Electric are leading domestic transformer manufacturers. On the news front, unconfirmed market rumors claimed that Sanbian Science & Technology has secured a bulk order for 35KV transformers from Tesla's xAI data center, and Tebian Electric has partnered with Tesla to become a tier-one supplier for FSD (Full Self-Driving).
Public information shows that Sanbian Science & Technology has laid out its presence in overseas markets such as the United States and Greece in Europe. As early as November 2024, the company announced that its wholly-owned subsidiary, Sanbian Technology USA Corporation, had completed registration in the United States, focusing on the sales of various transformers and related services. In December last year, it announced the establishment of a wholly-owned subsidiary in Europe with a planned total investment of 500,000 euros. In an article released in January 2025, Sanbian Science & Technology mentioned, "In 2024, we established a wholly-owned subsidiary in the United States, after which our main transformers entered Musk's xAI supercomputer center. In 2024, our mass-produced 330kV, 400kV and other products continued to enter the global power grid."
After the market closed on the 13th, Anker PowerDoe announced that it had recently signed a contract with Customer A to supply power equipment for the customer's North American data center project. The contract amount is 8.983 million US dollars, which is equivalent to approximately 62.978 million yuan based on the exchange rate announced by the State Administration of Foreign Exchange of the People's Bank of China on January 12, 2026, accounting for about 5.80% of the company's audited operating income in 2024.
The end of computing power is electricity, and the end of electricity is transformers. For more than a year, an unexpected "transformer shortage" has swept the world, showing no signs of abating to this day. The surging power demand of AI data centers, power grid renovations in Europe and the United States, the expanding scale of renewable energy grid connection, and the explosive growth in energy storage demand have jointly triggered this transformer buying spree. The supply-demand mismatch has led to a continuous increase in the global transformer delivery cycle.
Elon Musk, CEO of Tesla, stated in the recently aired "Moonshots" podcast that with the exponential growth of artificial intelligence, energy, and space systems, the real bottleneck is power generation, and transformers are the bottleneck within the bottleneck.
He said that people underestimate the difficulty of connecting power to the grid. "First, you need to generate electricity, and transformers require transformers themselves. You have to convert the voltage to a level that computers can handle, and also cool the computers. Basically, power generation and heat dissipation are the limiting factors for AI development. Once humanoid robot technology is available, they can solve the problems of power generation and heat dissipation. But for at least the next two years, these will remain limiting factors." He further explained that data centers must be equipped with power plants with sufficient capacity, and then convert the 100 to 300 kV voltage output by the power plants. Eventually, it must be converted to several hundred volts at the rack level.
Colossus 2, the ultra-large-scale data center being built by Musk's xAI in Memphis, Tennessee, USA, will have the world's first gigawatt-level training cluster, but it is hindered by the outdated U.S. power infrastructure.
Amid the global scramble for transformers, another piece of news has attracted considerable attention and become a catalyst for the latest market rally: on the evening of January 12 local time, a transformer explosion in the western part of Cleveland, Ohio, USA, triggered fires in multiple utility poles, resulting in power outages for some local users. It is reported that no casualties were caused by the accident, and power repair work is underway. The cause of the transformer explosion remains unknown.
In addition, on Monday (Eastern Time), former U.S. President Donald Trump posted on social media that Microsoft will announce measures to ensure that U.S. residents do not face higher electricity bills as the company builds more data centers to meet the growing demand for artificial intelligence. Trump emphasized on social media that Microsoft will strive to control electricity prices and hinted that other companies will make similar commitments."From the perspective of deliveries from Chinese manufacturers to overseas markets, the delivery cycle is about one and a half to two years. If it is overseas production capacity, the delivery cycle is even longer. In the most tight global situations, delivery may take two to three years," Liao Qihua, Head of China Energy Transition and New Energy Research at UBS Investment Bank, analyzed in a previous interview with The Paper. "Chinese transformers currently do not have a large global market share, but we can see that export growth is very fast. According to customs data, the year-on-year growth rate of transformer export value in the first 10 months of 2025 reached about 40%. It should be noted that this occurred when the industry boom has lasted for nearly two years, with no signs of slowing down."
UBS believes that the transformer market will continue to be in a high boom cycle in 2026. "From the perspective of demand and capacity expansion, the boom in transformers can be maintained next year. In 2027, it will depend on the implementation of global AI investment, which looks quite optimistic at present," Liao Qihua told The Paper.
Although the cost of building factories in overseas markets is high, the high profits are more attractive. According to The Paper, the selling price of a domestic main transformer in European and American markets is about four times that in the domestic market.
The unprecedented super cycle of electricity continues. Hitachi Energy, the world's largest transformer manufacturer and a key supplier of power transmission and distribution technology, has raised its market growth forecast, extending the growth cycle of its global power grid business from the previously predicted 2030 to 2035.