Nippon Steel will produce steel for transformers to be used in data centers, a report shows.

Nikkei reported on November 4 that the Nippon Steel-owned U.S. Steel would build new production capabilities at its Big River Steel facility in Osceola, Arkansas. Total investment is expected to reach billions of dollars.

These facilities, set to begin mass production in 2028, will make grain-oriented electrical steel sheets which are essential for the production of electrical transformers.

Transformers are used in data centers to convert high-voltage electrical power from the grid to lower voltages.

This report was released on the same day as the American steelmaker’s November 4 announcement that it was targeting $14 billion of US growth capital, with $11bn set to be invested by the end of 2028.

Nippon Steel was the world’s fourth-largest steel-producing company by tonnage in 2024. It acquired U.S. Steel in June of this year following lengthy negotiations with the Biden and Trump governments.

As part of the deal, the US government gained a so-called ‘golden share,’ which grants it veto power over a wide range of corporate decisions.