Power transformer shortages impose two-and-a-half-year wait times on Gulf AI data centres

AI data centre expansion plans across the Gulf Cooperation Council face a critical operational bottleneck in the acute global shortage of large power transformers and mounting international competition for available supply, according to supply chain analysts and specialists. This pressure is not limited to competing with global buyers; it also extends within the region itself, where data centres are racing against growing clean energy projects to connect their facilities to public grids, while regional localisation efforts will take time before reaching actual production.

Data centres rely on advanced electrical transformers to regulate and distribute power from the public grid to servers and sensitive heating and cooling systems. Hassan Zaheer, managing partner at Abu Dhabi research firm PTR, explained that most Gulf demand for large power transformers is met by the same Western and Asian suppliers, including Hitachi Energy, Siemens Energy, GE Vernova, Hyundai Heavy Industries, and Hyosung, all of which are reporting multi-year order backlogs for cloud operators and hyperscale data centres in the United States and Europe.Global waiting lists are effectively imposing restrictive quotas on the volumes available to Gulf projects, even though regional demand is growing at a less severe pace than in Western markets.

Estimates from consultancy Wood Mackenzie showed that US transformer demand jumped between 41 and 116 per cent depending on the unit type between 2019 and 2025, creating a supply deficit of more than 30 per cent over the past year. According to data from the Wisconsin AI Infrastructure Initiative, enterprise transformer delivery timelines have doubled to between 128 and 143 weeks, or at least two and a half years, compared to around 12 months before 2020. Ben Boucher, senior supply chain data analyst at Wood Mackenzie, notes that limited domestic transformer manufacturing capacity in the Gulf leaves its projects vulnerable to the same constraints, particularly as infrastructure plans continue to expand.

The GCC countries currently host more than 170 operational and planned data centre projects valued at over $93bn, according to figures from business intelligence firm MEED. As a result of this momentum, the value of Saudi Arabia's imports of transformers exceeding 10,000 kVA has surged more than eightfold since 2021, a jump largely driven by a higher volume of imported individual units alongside rising prices, according to Boucher's analysis.

These requirements coincide with Gulf efforts to meet carbon neutrality targets and renewable energy plans aimed at adding nearly 165 GW by 2030 with estimated additional investments of roughly $60.7bn, according to a study by the Baker Institute for Public Policy at Rice University authored by researcher Salem Al-Hajraf.Data centre developers are not only competing with each other for electrical equipment, but are also entering a direct race with major renewable energy projects and public grid expansions.Hassan Zaheer confirms that there are clear efforts to localise transformer production and distribution, but bringing any new manufacturing capacity online will require one to two years, making power infrastructure, and not just processing chips, the true bottleneck for AI data centre launch dates in the region.