Summary of AIDC Power Supply Systems Conference Call Industry Overview - The conference focused on the **AI Data Centre (AIDC)** power supply systems, highlighting the rapid evolution of AI and machine learning workloads, which are driving significant changes in power distribution and supply systems [3][11][24]. Key Insights 1. **Market Growth Projections** - AIDC power systems are projected to grow at a **25% CAGR** from 2025 to 2028, reaching a market size of **US$24 billion** [3][11]. - The largest segments within AIDC equipment include **Power Supply Units (PSU)** at **US$9.7 billion**, followed by **UPS + HVDC** at **US$8.4 billion**, **Diesel Power Generators** at **US$5.6 billion**, and **Battery Backup Units (BBU)** at **US$0.4 billion** [3][15]. 2. **Technological Transitions** - Key trends identified include **high-voltage conversion**, **direct current deployment**, **higher power density**, and **modular architecture** [3][4]. - **HVDC (High-Voltage Direct Current)** systems are expected to see a **94% CAGR** from 2024 to 2028, increasing their market share from **10% to 40%** [4][9][12]. 3. **Chinese Suppliers' Competitive Advantage** - Chinese companies are positioned to gain market share due to **lower costs** and **technological advancements**, particularly those with partnerships with overseas hyperscalers [5][20]. - The report suggests that aligning with hyperscaler demand early is crucial for rapid supply chain penetration [9][20]. 4. **Demand for Backup Power** - There is an anticipated boom in demand for backup power and power supply units, driven by the increasing power density and efficiency requirements of AIDCs [4][15]. 5. **Investment Trends** - North American hyperscalers (Meta, Amazon, Microsoft, Google) are expected to invest over **US$388.8 billion** in 2025, rising to **US$458.1 billion** in 2026 [27]. - Chinese hyperscalers (Alibaba, Tencent, Baidu) are projected to increase their capex to **US$31.9 billion** in 2025 and **US$32.8 billion** in 2026 [27]. Additional Insights 1. **Power Supply Unit (PSU) Evolution** - The efficiency of AI power shelves is increasing, with current power shelves achieving **97.5%-98% efficiency**, compared to **96%** for non-AI power shelves [75]. - The market for PSUs is dominated by Taiwanese companies, but mainland Chinese companies are catching up [77]. 2. **Solid State Transformers (SST)** - SSTs are expected to become the third-generation technology in power supply systems, combining transformer and HVDC functions, with commercialisation anticipated to begin in **2027** [69][70]. 3. **Competitive Landscape** - The AIDC market is currently dominated by established players like **Schneider**, **Eaton**, and **Vertiv**, but there is room for new entrants with strong technological capabilities [82][88]. - Companies like **Kehua** and **Sungrow** are highlighted as favorable investment opportunities due to their strong market positions and growth potential [9][92]. 4. **Valuation and Market Sentiment** - Despite an **86% YTD rally**, the sector is trading at a **31x 2026E PE**, which is considered undemanding given the forecasted **33% CAGR** in sector EPS from 2025 to 2027 [9][92]. Conclusion The AIDC power supply systems market is poised for significant growth driven by technological advancements and increasing demand from hyperscalers. Chinese suppliers are well-positioned to capitalize on these trends, and investment opportunities exist in companies that are innovating and expanding their market reach.