High-voltage direct current (HVDC) power distribution technology is poised to become the future direction for AIDC power supply, offering advantages such as reduced system energy consumption, higher power density in data centers, and better synergy between green energy and computing power. Compared to traditional AC power supply, HVDC overcomes the "skin effect" of AC transmission, delivering lower transmission losses, reduced copper usage, and lower infrastructure costs. As AIDC evolves toward higher energy consumption and power density with advancements in computing chips, HVDC is expected to dominate the next-generation power supply for AIDC.
The adoption of HVDC power solutions outside server racks is imminent, with the Panama power solution likely emerging as the mainstream choice, while solid-state transformers (SST) are projected to become the ultimate solution. The current UPS-based power supply architecture for data centers is a product of traditional AC distribution standards. The shift toward HVDC technology varies slightly between domestic and international markets in terms of product design and technical approaches.
1) **Domestic Market**: China has been an early adopter of HVDC power solutions outside server racks, primarily featuring two technical routes: 240/336V modular HVDC power supplies and the Panama power solution. The latter offers higher integration, significantly lower CAPEX compared to UPS and HVDC solutions, and system efficiency of up to 97.5%. Major cloud service providers (CSPs) like Alibaba and Tencent have already adopted Panama power solutions on a large scale. HVDC penetration in new AIDC builds is expected to rise rapidly by 2026, with Panama solutions likely dominating. The domestic HVDC market is projected to exceed RMB 80 billion by 2030, with a CAGR of ~122% from 2025 to 2030.
2) **Overseas Market**: The key driver for HVDC adoption abroad is NVIDIA’s next-generation Rubin GPU, which requires 800V DC power. Overseas users are expected to directly adopt 800V solutions. The Sidecar solution, offering higher power density and integration than standalone power cabinets, is gaining traction but faces production challenges. Leading server power suppliers like Delta and Megmeet are promoting this solution. The penetration of 800V HVDC overseas is expected to accelerate by 2027, with standalone power cabinets likely outpacing Sidecar solutions in adoption. The overseas HVDC market is forecast to surpass RMB 140 billion by 2030, with a CAGR of ~170% from 2025 to 2030.
3) **SST Adoption**: SST eliminates the need for frequency transformers, significantly improving efficiency and reducing size. China leads globally in SST development, with overseas CSPs increasingly proposing SST-based AIDC power solutions. HVDC technology is expected to converge toward SST, with mass adoption likely starting in H2 2027. By 2029–2030, SST is anticipated to become the mainstream solution for AIDC power supply outside server racks, with the global SST market potentially exceeding RMB 100 billion by 2030.
**Domestic HVDC and SST Lead Globally, Expansion into North America Holds Huge Potential** Data center clients prioritize brand reputation and quality, maintaining stable supply chain dynamics. China’s HVDC technology is significantly ahead of global peers, with SST already applied in charging stations and DC microgrids, optimizing both technology and cost. Leading global Tier 1 players are actively collaborating with Chinese firms on HVDC and SST solutions. Companies like KSTAR, Sinexcel (with OEM experience), Sungrow, and Jinpan Technology (with overseas channels and power electronics expertise) are well-positioned to penetrate the North American market. Firms like Sifang and Weiguang Energy, with SST advantages, may partner with global Tier 1 players to expand overseas. Domestic power supply companies are set to capitalize on AI-driven growth.
**Investment Recommendations** - **Comprehensive Power Supply Providers (SST + HVDC)**: Sungrow, Jinpan Technology. - **HVDC Power Suppliers**: ZTEQ, KSTAR, Kehua Data, Sinexcel, UU Power. Also watch: Yage (phase-shifting transformers) and Tonhe Tech (rectifier modules). - **SST Focus**: Sifang, China XD Electric. Monitor core component suppliers like Spextreme, Jingquanhua, and Click.
**Risks**: Slower-than-expected customer tenders, delays in AIDC construction, unfavorable tariff policies, and intensifying competition.
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