China’s Power and Cooling Firms Capitalize on Trillion-Dollar Data Center Boom
· chinamoneynetwork.com
A known group of power and cooling equipment suppliers is profiting from the global data center construction boom. The surge in demand for equipment like transformers and advanced cooling systems is driven by energy-hungry data centers. McKinsey projects nearly $7 trillion in data center investments by 2030, with Nvidia expecting strong AI spending for years to come. Meeting the demand for data centers poses challenges as hyperscalers push for rapid facility delivery. Delays in grid connections, especially in emerging markets, can stretch up to 24 months, impacting the pace of construction. Wing Kin Cheung, CEO of BodaData, highlighted the industry's focus on lead times for generators and transformers. Key transformer suppliers like HD Hyundai Electric and Hainan Jinpan Smart Technology have experienced increased demand tied to AI infrastructure projects. HD Hyundai Electric noted rising demand in Europe driven by U.S. hyperscalers' investments in markets like Finland and Germany. Both companies are intensifying their development of solid-state transformers (SSTs) to enhance power efficiency and reduce environmental impacts. As AI chips consume more power, SST technology is gaining attention for its potential to improve energy efficiency. UBS estimates that SSTs will enhance power efficiency by around 4% and reduce costs. The technology is forecasted to have a 40% penetration rate by 2030, with Chinese companies poised to gain market share due to their technological expertise and cost advantages. Cooling systems are emerging as a crucial growth area in data centers due to the heat generated by powerful AI chips. Liquid cooling is projected to dominate new AI data center installations by 2030, offering energy consumption reductions of over 27%. Developers are exploring innovative cooling solutions such as floating facilities, underwater data centers, and servers in caves or tunnels. Despite the strong demand for thermal-management products, stock-price gains for suppliers have moderated. Delta, HD Hyundai Electric, Jinpan, and Envicool have experienced varying stock movements amid intensified competition. Delta Chairman Ping Cheng emphasized that market variables like new product platforms and component shortages pose risks that could impact margins. Investors are advised to be discerning in selecting industry leaders who can secure customers in a competitive market. Bank of America's Matty Zhao cautioned that not all suppliers will succeed amid the evolving landscape of data center infrastructure.
This area is available only to Subscribers.
A known group of power and cooling equipment suppliers is profiting from the global data center construction boom. ...