2026 Global Transformer Boom Fuels Rising Demand for Electrical Insulation materials

The sharp increase in global transformer demand in 2026 — driven by AI data centers, grid modernization, renewable en...

The sharp increase in global transformer demand in 2026 — driven by AI data centers, grid modernization, renewable energy integration, and aging infrastructure replacement — is expected to significantly boost demand for electrical insulation boards and insulation paper.

Because insulation materials are essential components of every transformer, growth in transformer production translates almost directly into increased insulation consumption.

Transmission Mechanism: Why Insulation Demand Rises in Parallel

A transformer’s insulation system typically includes:

Structural insulation: epoxy fiberglass sheet (G10, G11), end rings, spacers

Winding insulation: electrical insulation paper, crepe paper, NMN/DMD composites

High-temperature insulation: aramid paper (e.g., Nomex type materials)

Liquid insulation: transformer oil

If global transformer output rises by 30%, insulation material demand generally increases by roughly 25–35%, depending on product mix.

Importantly, higher-spec transformers consume more high-performance insulation per unit, creating a structural upgrade effect.

Impact on Electrical Insulation Boards

Epoxy Fiberglass Laminates (G10 / G11)

Main applications:

Dry-type transformer structural supports

High-voltage clamping systems

Insulating frames and end rings

Expected Effects:

Demand Growth

Dry-type transformers (widely used in data centers and renewable installations) require more structural insulation boards than oil-filled units.

Shift Toward Higher Grades

F-class and H-class temperature resistance

Higher CTI (Comparative Tracking Index)

Lower water absorption

G11 and high-temperature laminates are likely to grow faster than standard FR4-grade materials.

Pricing Pressure

Increased consumption of fiberglass cloth and epoxy resin may tighten supply and lift prices, particularly for high-grade laminates.

Impact on Insulation Paper

The demand effect on insulation paper may be even more pronounced than on insulation boards.

(A) Electrical Kraft Paper (Cellulose-Based)

Core insulation for oil-immersed transformers

Large volume consumption per unit

Impact:

Strong volume growth aligned with medium- and high-voltage transformer expansion

Potential for temporary supply tightness

Moderate pricing support

This segment is volume-driven but relatively mature.

(B) Aramid Paper (High-Temperature Grade)

Used in:

Dry-type transformers

F/H class insulation systems

Data center transformers

As AI-related infrastructure expands, high-temperature transformers become more common.

(C) NMN / DMD Composite Insulation

Used for:

Layer insulation in windings

Both transformer and motor applications

Demand will grow proportionally with transformer production, though margins remain moderate unless specialty grades are involved.

Structural Upgrade: More Important Than Pure Volume

This demand surge is not purely cyclical — it reflects structural changes in the power sector:

Higher voltage transmission

Greater thermal stress

Stricter fire safety standards

Longer design life requirements

As a result:

High-performance insulation boards and high-temperature insulation paper will grow faster than standard-grade materials.

Conclusion

The 2026 global transformer boom is likely to:

Increase overall demand for insulation boards and insulation paper

Accelerate the shift toward higher-performance materials

Improve pricing power in premium insulation segments

Strengthen long-term structural growth in the insulation materials industry

The key opportunity lies not just in higher volumes, but in the upgrade toward high-temperature, high-reliability insulation systems.