2025-09-15 13:17Summary 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.