Global Scramble for China's Transformers Benefits This High-End New Material!

Driven by a global transformer shortage and a commercial spaceflight boom, a high-performance material called aramid paper is becoming a crucial link in the industrial chain.

On January 31, 2026, CCTV Finance reported that many transformer factories in Guangdong, Jiangsu, and other regions are currently operating at full capacity, with some orders for data center-related business extending into 2027.

Currently, the power transformer sector is experiencing a global shortage. North America is facing power shortages, Europe's power grids are aging, and the rapid rise of artificial intelligence (AI) is driving transformer demand. Additionally, the construction of global green energy power plants such as photovoltaic, wind, and hydropower stations is further expanding transformer demand. Recently, Elon Musk stated in an interview that "the bottleneck constraining artificial intelligence will shift from chips to voltage transformers."

With China's transformer production capacity accounting for 60% of the global total, many leading domestic transformer companies are experiencing full order books and extended delivery times. It is reported that the delivery cycle in the US market has increased from 50 weeks to 127 weeks. At an electrical equipment company in Foshan, export orders for dry-type transformers, a core product, are growing rapidly. At a transformer factory in Jiangsu, product orders have been scheduled until the end of 2027, and the first domestically produced fully insulated ultra-high-voltage, large-capacity transformer was recently shipped to the North American market. Additionally, in June 2025, Chengdu XD Zhongte Co., Ltd. stated that after completing order deliveries to Sweden and Saudi Arabia, they would immediately begin production of equipment for export to Canada and Indonesia.

According to data released by the General Administration of Customs of China on January 18, China's transformer exports reached a record 64.6 billion yuan last year, a year-on-year increase of nearly 36%, hitting an all-time high. In 2025, the domestic transformer market size is expected to grow by more than 20% year-on-year, with orders for high-end products related to AI computing power and Ultra-High Voltage (UHV) exceeding 35%, becoming the core engine of industrial growth.

Demand resonance in two high-growth sectors is jointly pointing to a high-end new material – aramid paper.

Aramid paper possesses core advantages such as strong mechanical properties, excellent elastic flexibility, heat resistance, flame retardancy, and insulation. Its reprocessability allows it to be adapted for extreme scenarios like aerospace and power equipment, making it an indispensable key material for high-end equipment.

In the aerospace field, aramid paper honeycomb can be used for the manufacturing of rocket engine casings and structural components of aircraft and spacecraft such as fuselages, main wings, and tail wings due to its high strength and high-temperature resistance. For example, aramid fiber reinforced polymer (AFRP) can be used for satellite connection components and protective structures in areas susceptible to space debris impacts.

Aramid fiber, due to its lightweight properties, can achieve a weight reduction of 30%-40% and is used in cabin doors and windows, fairing surfaces, etc.

Aramid materials, due to their heat resistance, flame retardancy, and impact resistance, can be used in fairing panels and sandwich structures of launch vehicles.

Furthermore, aramid fiber possesses excellent insulation properties, and aramid fiber reinforced composites can be used in satellite electronic equipment bay structures with specific requirements for electromagnetic shielding. In addition, solar panels in satellites widely use various honeycomb components made of aramid fiber composite panels with excellent insulation properties.

In the field of power equipment, aramid insulation paper is mainly used for: coil and winding layer insulation materials in transformers, insulation sleeves, insulation materials between components, insulation materials for wires and joints; coil windings, slot insulation, phase insulation, turn-to-turn insulation, and line terminal insulation materials in motors and generators; insulation for cables and wires, and insulation materials for nuclear power equipment. Representative products include dry-type transformers, locomotive traction motors, mining downhole motors, and microwave oven transformers.

Additionally, aramid paper can be used in solid-state transformers, which are central to next-generation power supply solutions for data centers.

The global aramid paper market is currently dominated by DuPont (12,000 tons/year) with a market share of 57%-60%. Among domestic Chinese enterprises, Minshida has broken the monopoly to become the world's second-largest aramid paper producer, with a market share of approximately 10%-14%. Other players include Times Huaxian (3,000 tons/year), Chaomeisi (2,000 tons/year, acquired by Tongyizhong), and Ganzhou Longbang Material Technology (1,000 tons/year).

Compared to overseas competitors, Minshi possesses significant advantages in cost and delivery time: product prices are 20%-30% lower than DuPont, and while overseas counterparts require 8-12 weeks for delivery, Minshi's delivery time is significantly shortened, precisely matching the "fast delivery" needs of new energy and transformer customers. Furthermore, relying on its holding shareholder Taihe New Materials, Minshi achieves a stable supply of raw materials, building a complete industrial chain support system.

It is reported that Minstar's aramid paper products are currently mainly used in two major fields: electrical insulation and honeycomb core materials. Among them, electrical insulation is mainly used in motors, transformers, reactors, and electronic products, with the new energy vehicle drive motor segment experiencing the fastest growth. Honeycomb core material products are maturely applied in various aircraft and satellite fields, and end customers already cover leading domestic and foreign companies such as AVIC, Siemens, and ABB, with product recognition verified by the industry.

In addition, Minstar has entered the solid-state transformer field and has reached cooperation or contact with a number of leading domestic and foreign customers, with some products already being introduced into applications.

Minsda is also actively expanding into the consumer market. On October 10, 2025, it announced its participation in the Coil Winding, Insulation & Electrical Manufacturing Exhibition (CWIEME) in Italy, focusing on new material applications and future trends in core areas such as motors and transformers. The company is promoting its independently developed AirVita series pickleball paddles to universities. Leveraging the lightweight, high-strength, and high-elasticity characteristics of aramid materials, the AirVita series precisely caters to the sporting needs of different skill levels, demonstrating Minsda's extension of aramid paper into consumer markets such as sports.

In terms of production capacity, Minstar currently has a total aramid paper production capacity of 4,500 tons/year. Its 1,500-ton production line, funded by raised capital, entered the trial production stage in June 2025. As of September 30, 2025, the line's capacity utilization rate was approximately 50%, indicating relatively sufficient capacity reserves.

In terms of performance, the company achieved a total operating revenue of 343 million yuan in the first three quarters of 2025, a year-on-year increase of 21.77%, and a net profit of 91.1717 million yuan, a year-on-year increase of 28.88%. Huayuan Securities predicts that Minshida's net profit attributable to the parent company for 2025-2027 will be 143 million, 181 million, and 230 million yuan, respectively.

Regarding the performance growth in the first half of 2025, Minstar stated that it was mainly driven by the sustained high-speed development of domestic new energy vehicles, wind power, photovoltaics, energy storage, AI intelligent data centers, and other industries, which boosted the market demand for drive motors and various transformers. Furthermore, the upgrade of power grids in Europe and the United States and the growth in computing power demand led to the expansion of transformer demand. In addition, the company continued to increase its efforts in developing overseas markets, which promoted the year-on-year growth in sales of aramid paper in the electrical insulation field, affecting the year-on-year growth in operating revenue and operating costs.

In conclusion, from the perspective of the aerospace field and transformer market demand, the future application potential of aramid paper is broad.