As demand related to AI factories expands, companies involved in control equipment, sensors, power supplies and switchboards are accelerating capital investment. Specific investment plans have been announced, including expanded large-transformer capacity and a growing number of data center projects.
Demand supporting AI data centers and semiconductor plants is creating a structural growth opportunity for Japan's electrical and heavy electrical equipment sector. Investment to increase transformer capacity, along with the development of factory automation equipment spanning sensors, control equipment, power supplies and switchboards, is expected to continue.
Daihen announced plans to double its current production capacity for large transformers by fiscal 2029. Meidensha plans to invest ¥16 billion at its Numazu facility, bringing the facility into operation in 2028 and increasing capacity 1.5 times. Against a backdrop of growth in extra-high-voltage receiving and transforming equipment, Takaoka Toko's consolidated operating profit for the fiscal year ending March 2026 rose 60.2% from the previous fiscal year to ¥9.7 billion, while its dividend payout ratio was raised to 40%.
Within factories, the full range of sensors, control equipment, power supplies and switchboards is essential for AI-based production-line control, and their role as the industrial nervous system is driving demand. Cases in which the same product groups serve both data centers and factories are increasing, broadening the market's scope.
Nitto Kogyo and Kawaden, among others, are expanding their areas of responsibility for large-scale projects involving data center cabinets and extra-high-voltage receiving and transforming equipment. The markets for factory and data center applications are drawing closer together, creating new sources of demand. The article will introduce all 20 stocks, organized by function.