According to a research report, recent System1 (SST) product releases showcase distinct features, with firms possessing strong grid comprehension and robust market channels expected to lead. The System1 industry is accelerating its transition from technical validation to practical application, marking a step forward in industrialization. It is also noted that data centers may see small-scale pilot projects and demonstration models next year, laying the groundwork for the future large-scale application of System1 solutions in next-generation AIDC. The report expresses optimism about the quickening pace of System1 industrialization and recommends monitoring progress at relevant companies. Key viewpoints are as follows: Products exhibit unique characteristics, and companies with strong grid understanding and market access are poised to excel. The report summarizes recent new product launches: Delta's containerized System1 DC mobile intelligent computing center integrates CPU, AI acceleration cards, and server hardware, offering a complete solution from grid to chip with a plug-and-play feature. Sifang unveiled a 2.4MW first-generation model with 10kV input and 800V output, featuring a highly integrated design. The 1.0 product is already in mass production, with future iterations planned, such as 35kV and 13.8kV versions, based on industry demand. The report is positive about the company's extensive operational experience with System1 in DC distribution networks and microgrids, its years of expertise in power electronics including power quality, unit control, and grid-forming energy storage, and its involvement in green power direct connection services. As a core regulation unit for source-load coordination, System1 is expected to synergistically enable comprehensive solution implementation. Eaglerise launched new products in its System1 Junnuo series and plans to allocate more resources to develop the Panama power supply market; the company's data center transformers have already entered markets including the US and Japan. With years of accumulated high-frequency transformer technology, the report is optimistic about its diversified product portfolio in the AIDC sector and its overseas service responsiveness. Advancements across multiple applications are making the industrialization roadmap increasingly clear. System1 already has mature demonstration projects in areas like charging, new energy, microgrids, and rail transit. The report suggests that data centers, which have high demands for stability and reliability, currently lack complete project cases of System1 application, and data testing and validation still require time. This year is seen as critical for companies to accelerate R&D, iterate prototypes, collaborate with clients on custom versions, and conduct testing. Subsequently, with the widespread adoption of 800VDC architecture overseas, next year may see small-scale pilot and demonstration projects, establishing a foundation for the future large-scale use of System1 solutions in next-generation AIDC. Valuation and Recommendation The report is optimistic about the accelerating pace of System1 industrialization and recommends focusing on developments at related companies: Sifang, Eaglerise, Jinpan, Mingyang, and China XD. Risks include AIDC capital expenditure falling short of expectations, changes in technology pathways, and intensifying market competition.
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