Orient Securities has released a research report stating that solid-state transformers (SST) are emerging as the definitive power supply solution for next-generation data centers, unlocking substantial market growth potential. The rising power density of data centers is pushing the boundaries of traditional power distribution, positioning SST as the potential ultimate pathway for external power supply technology. This technology is expected to find applications in data centers, charging stations, and new energy distribution networks, with the firm expressing a positive outlook on its industrialization trend.

The report outlines several key perspectives, starting with the necessity to upgrade external power distribution architecture due to increased data center power density. If the power consumption of a single NVDA rack escalates from the kilowatt level to the megawatt level, traditional low-voltage solutions will face systemic bottlenecks such as excessive current, significant cable losses, and severely constrained power distribution space. This creates an urgent need for new power supply architectures. The external power distribution framework is evolving through a clear progression: from Uninterruptible Power Supplies (UPS) to High-Voltage Direct Current (HVDC) systems, then to Panama Power sources, and finally to SST. While UPS is the conventional solution, its efficiency limits computing power growth. HVDC removes the inverter stage of UPS but still has limitations. Panama Power, an integrated HVDC solution, significantly shortens the power supply chain but remains bound by voltage and space restrictions. Solid-state transformers, with their high system efficiency, minimal footprint, near-zero copper usage, ease of deployment, and broad compatibility, are set to become the ultimate power solution for next-generation data centers.

The market space for SST is vast. The industry chain is divided into upstream material and component manufacturers, midstream system integrators, and downstream application service providers. Upstream, the chain comprises suppliers of core components like power electronic devices, high-frequency transformers, structural parts, and cooling systems. The midstream, which produces complete SST products, is currently led by overseas giants like Vertiv, Eaton, Delta, and Siemens. Downstream applications primarily target data centers and smart grids. NVIDIA has confirmed its future industrial layout for SST, and national policies are bolstering the sector's development, elevating its market status and growth prospects. Based on power demand forecasts from a US RAND Corporation report and SST penetration rate estimates from SemiAnalysis, the research firm calculates the SST market could reach a size of RMB 174.9 billion by 2030.

The applications for SST are diverse, with acceleration in industrialization progress. AI data centers represent the largest application scenario for SST. Beyond this, the market space in distribution networks, charging piles, and rail transit is also considerable, with domestic use cases already in place. Overseas, Delta and Eaton are pioneering the adoption of SST solutions, while several foreign firms like Heron, DGMatrix, and SolarEdge are deeply embedded with leading global computing customers, keeping pace with the generational evolution of server racks and setting a clear timeline for SST implementation. Domestically, there are frequent positive catalysts. Companies such as Xidian Power and Weiguang Energy have secured overseas data center orders, and numerous local firms including Weiguang Energy, Jinpan Technology, NARI Technology, China XD Group, Zhiguang Electric, Shandong Xinfeng, NARI Electric, and Yangguang Energy have launched new SST products for scenarios like data centers, microgrids, and integrated PV-storage-charging systems, actively embracing the SST era.

SST is transitioning from a cutting-edge technology to a standard component of energy infrastructure. The competitive landscape for SST in the future will be shaped by factors such as the depth of understanding of power grids, the speed of technological iteration, and the capability to provide complete solutions and achieve large-scale manufacturing. The report also highlights risks including fluctuations in raw material prices, volatility in macroeconomic and industry demand, uncertainties in the maturity and reliability verification of SST technology, and the impact of changes in calculation assumptions on the research results.