CITIC SEC released a research report expressing optimism about the concurrent growth opportunities in AIDC and overseas expansion by 2026, with key examples including space-based photovoltaics, AIDC, power equipment, and energy storage. The report also recommends focusing on high safety-margin sectors such as grid infrastructure during the domestic policy window. Over the medium to long term, the firm advises continued attention to the long-term upgrade trends in overseas power grid systems driven by AIDC and new energy, highlighting representative Chinese companies with strong overseas presence, multi-product export capabilities, and deep involvement in AIDC power system upgrades.
1) Space-based photovoltaics: With computing power enhancements, single-satellite power is rising significantly. Solar arrays represent the most inflationary component in terms of value share. Overseas capacity deployment is accelerating due to demand growth. The firm estimates the long-term market size for photovoltaic cells in the satellite sector could approach nearly one trillion yuan. Between 2026 and 2035, annual satellite launches are projected to increase from 5,000 to 100,000 units, driving total demand for space-based photovoltaic cells from 0.1 GW to 5–10 GW. Gallium arsenide cells will remain dominant in the short term with a 70% penetration rate, but as costs decline and technology advances, P-type heterojunction (HJT) and perovskite/crystalline silicon tandem cells are expected to gain share, with the latter projected to reach 70% penetration in the long run. The overall market size for photovoltaic cells in the satellite sector is forecasted to reach 297.7 billion yuan by 2035–2040.
2) AIDC and overseas expansion: Upgrades in AIDC power supply systems are creating new opportunities, while overseas grid modernization trends are clear. AI power systems are evolving from uninterruptible power supply (UPS) to all-DC systems, with rising output voltage levels and accelerated adoption of solid-state transformer (SST) solutions. Increasing power density in server power supplies is driving both volume and price growth, spurring demand for supercapacitors. In terms of competitive landscape, VRT and Delta Electronics lead in HVDC, while CSP manufacturers and NVIDIA solutions advance in parallel. In rack power supplies, Taiwanese manufacturers hold an overall advantage, with companies like Megmeet entering NVIDIA’s supply chain. For secondary and tertiary power supplies, Infineon, MPS, and Vicor lead in DC/DC power chip technology. The firm is optimistic about rising market share for domestic server power supply brands and investment opportunities arising from capacity shortages, solution upgrades, and overseas expansion of new products like supercapacitors and SST. Additionally, AIDC and new energy are driving overseas grid system upgrades. The report suggests that overseas markets may replicate China’s 14th Five-Year Plan power system upgrade cycle, progressing in three stages: energy storage, baseload power equipment, and grid equipment.
3) Domestic grid demand: With the "Two Sessions" window in March, policy and project synergies are expected, highlighting leaders in gas-insulated switchgear (GIS). Grid investment under the 15th Five-Year Plan remains robust, with major projects like ultra-high voltage (UHV) expected to see continued momentum. In January 2026, State Grid announced a planned investment of 4 trillion yuan for the 15th Five-Year Plan, a 40% increase from the 14th Five-Year Plan, reinforcing expectations of steady growth in grid investment. According to reports, State Grid stated that the investment will prioritize green transformation, aiming to add about 200 GW of wind and solar capacity annually, raise the share of non-fossil energy consumption to 25%, and increase electricity’s share in final energy consumption to 35%, supporting the initial establishment of a new energy system. The firm believes that major projects, particularly UHV construction, are poised for renewed growth, benefiting core equipment segments.
Key risks include slower-than-expected global power system upgrades, deceleration in AIDC investment, delays in corporate overseas expansion, and underwhelming domestic grid investment.
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