Solid-state transformers have long-term potential, but large-scale data center deployment may have to wait until after 2028
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Solid-state transformers have long-term potential, but large-scale data center deployment may have to wait until after 2028
JPMorgan's expert call concluded that SSTs can improve data center power architecture efficiency and significantly save space, but commercialization is still constrained by standards, reliability, cost, and application validation; in the short term, adoption is more likely to advance first in EV charging, industrial applications, renewables plus storage, and microgrids.
- Compared with the traditional power-frequency transformer plus UPS chain, SSTs can improve end-to-end efficiency by more than 5 percentage points and reduce power equipment volume to about 1/5 to 1/10 of traditional solutions.
- 800V HVDC is seen as a transitional architecture; over the next 5-10 years, UPS, HVDC, and SST solutions may coexist, with the final choice depending on chip power consumption, rack power density, and data center efficiency targets.
- Commercial traction remains limited: one electrical equipment company reported about 100-200 units of orders in North America, and China XD has 4 overseas orders, but scaled data center orders remain scarce.
- Delta Electronics is viewed by the expert as first-tier, with advantages stemming from earlier R&D, deployment, and operational data; Chinese vendors such as Sifang Automation and Sungrow also have product exposure.
Report interpretation
Overview
This report is a JPMorgan expert call recap on China's power infrastructure and solid-state transformers, focusing on the application prospects of SSTs and 800V HVDC in data centers, EV charging, high-energy-consumption industries, renewables plus energy storage, and microgrids. The expert believes SSTs have the potential to become a long-term upgrade path for data center power architecture, but they are still in the early commercialization stage at present.
Core views
The core view is that the long-term value of SSTs is clear, but the probability of large-scale data center adoption in the short term is limited. Their advantages include higher end-to-end efficiency, smaller footprint, software-defined power management, coordination between power supply and compute loads, and functioning as energy routers to enable bidirectional power flow. Constraining factors include unsettled product standards, insufficient long-term reliability validation, the fact that 800V HVDC solutions can already meet some current needs, cost pressure from rising silicon carbide device prices, and the lack of enough replicable large data center cases.
Analysis framework
The report is mainly based on an expert conference call transcript, covering technology routes, value relative to traditional power-frequency transformer and UPS chains, the 800V HVDC transitional architecture, commercial order validation, constraining factors, and the supplier landscape, supplemented by coverage ratings, prices, and historical recommendation information for Delta Electronics and Sungrow-A.
Methodology notes
From pilot to small-scale scaled deployment
The report uses standards maturity, reliability validation, order scale, application scenarios, and supply chain readiness to judge whether SSTs are ready to move from pilots to large-scale data center deployment.
Coexistence of multiple routes and transitional architecture
The expert views 800V HVDC as a transitional solution that retains front-end power-frequency transformers while switching downstream to DC power distribution, and believes UPS, HVDC, and SST solutions may coexist over the next 5-10 years.
Differences in hardware capability and operating data
The expert believes domestic vendors do not have obvious hardware disadvantages, but real deployment and operating data are the key differentiators, where Delta Electronics is ahead.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Delta Electronics, Inc. (2308.TW)First-tier SST supplier; report discloses an OW rating
- Strengths
- Earlier R&D, high industry recognition, and an existing accumulation of deployment and operating data.
- Weaknesses
- The report does not provide clear evidence of large-scale data center SST orders.
- Comparison
- Compared with most domestic vendors, Delta leads in real deployment and operating data.
- Risks
- Slow progress in SST standards and reliability validation, or alternative routes such as 800V HVDC delaying SST adoption.
- Sungrow-A (300274.SZ)Chinese new energy equipment vendor; has launched SST products; report discloses an OW rating
- Strengths
- Has an industry foundation in renewable energy and energy storage-related scenarios, and may benefit from renewables plus storage and microgrid applications.
- Weaknesses
- The report does not provide direct evidence of scaled SST orders or mass-production capability.
- Comparison
- One of the Chinese vendors that may stand out, but the expert emphasizes that Delta is further ahead in operating data.
- Risks
- A long timeline for data center application realization, with insufficient product certification and commercial validation.
- Sifang Automation (601126 CH)Chinese SST-related vendor with a grid background; report discloses NC
- Strengths
- Has a utility grid background, practical experience in PV-storage-DC architecture, and relatively advanced industrialization capability, and is exploring cooperation with a leading U.S. DC electrical equipment supplier.
- Weaknesses
- Still needs to advance North American channels, certification, and real deployment validation.
- Comparison
- Hardware capability is not obviously behind, but deployment data and international certification remain key gaps.
- Risks
- Uncertainty around the pace of cooperation, certification, and commercialization.
- Eaton (ETN US)Overseas publisher of SST-related products; report discloses NR
- Strengths
- Has an overseas electrical equipment brand and channel foundation.
- Weaknesses
- The expert has not yet seen widely cited commercialization cases.
- Comparison
- Compared with Delta, the report does not emphasize its leadership in SST operating data.
- Risks
- Product launches do not equal scaled commercial orders, and data center adoption may still be delayed.
Key data
- SST efficiency improvementMore than 5 percentage pointsCompared with the traditional power-frequency transformer plus UPS chain, whose end-to-end efficiency is usually below 90%.
- SST equipment volumeAbout 1/5 to 1/10 of traditional solutionsHelps free increasingly tight equipment room space in AIDC facilities and supports higher power density.
- Timing of large-scale data center adoptionUnlikely before 2028The expert expects entry into the small-batch, scaled commercial stage to be more likely after 2028.
- Architecture coexistence period5-10 yearsTraditional UPS, 800V HVDC, and SST solutions are expected to coexist.
- North America order indicationAbout 100-200 unitsOne electrical equipment company said it had secured orders of this scale, representing a relatively clear early validation point.
- China XD overseas orders4 unitsThe report says China XD obtained four overseas orders, but broader scaled data center orders remain limited.
- Chinese vendor product launchesMore than 20 companies have launched products, and more than 30 are in pre-launchMost are still in the development stage and lack true mass-production capability.
- Current rating and price of Delta ElectronicsOW; NT$1,855.00The report discloses the price as of the close on July 14, 2026.
- Current rating and price of Sungrow-AOW; Rmb108.00The report notes the price as of July 13, 2026.
Impact & implications
From an investment perspective, the SST theme is better viewed as a medium- to long-term upgrade theme for power equipment and AI data center power architecture, rather than a short-term logic of large-scale order realization. Vendors with early deployment, certification, operating data, and North American channels may benefit more; however, before standards and reliability evidence are sufficient, market expectations for SST penetration in data centers need to remain cautious.
Risks
- SST product standards and unified specifications across the data center supply chain are not yet mature, which could delay owner investment decisions.
- Data centers have extremely high requirements for power availability, and SST long-term operating data and reliability validation are insufficient.
- 800V HVDC is already sufficiently usable for current needs, which may weaken the short-term economic and operational necessity of adopting SSTs.
- Rising silicon carbide device prices may push up system costs.
- There is a lack of clear, replicable large-scale commercial data center orders, so market expectations may be premature.
- Which architecture ultimately wins depends on chip power consumption, rack power density, and efficiency targets, leaving technological route uncertainty.
What to watch
- Whether SSTs move from pilots into the small-batch scaled commercial stage around 2028.
- Whether data center owners begin publicly adopting SSTs and form verifiable large orders.
- Whether SST-related product standards, certification, and reliability testing make substantive progress.
- The speed of 800V HVDC penetration in AIDC and its substitution or coexistence relationship with SSTs.
- The operating data, delivery cases, and capacity readiness of vendors such as Delta Electronics, China XD, Sifang Automation, and Sungrow.
- The impact of silicon carbide device price changes on SST system economics.