Data center equipment and infrastructure: Data-center equipment demand remains strong as modular systems, liquid cooling and 800VDC architectures advance

Overview

This conference-takeaway report summarizes Goldman Sachs' meetings with data-center equipment suppliers in Singapore. Its central conclusion is that AI-driven demand continues to support power, cooling, automation and generation equipment, while modularization, liquid cooling and 800VDC designs are becoming key routes to faster and denser data-center deployment.

Core views

Goldman Sachs found demand for data-center equipment to be strong across the suppliers it met, with capacity tight but supply chains generally holding up. Alfa Laval and Schneider Electric reported triple-digit order growth across training and inference workloads. Eaton said customers are signing three-year capacity agreements, compared with commitments of less than one year previously, while INNIO reported slot reservations extending to 2031. Lead times varied materially: roughly three to four months for cooling solutions, nine to 13 months for low-voltage data-hall products, 20-24 months or more for engines, and 2.5-3 years for high-voltage transformers. Suppliers are expanding capacity and mitigating bottlenecks through advance component purchases and localized manufacturing. The report identifies 800VDC as an important next-generation architecture, with launches generally targeted for 1H27 and broader adoption expected by late 2027 or early 2028. Eaton, Schneider Electric and Vertiv are developing portfolios that include solid-state transformers and sidecars. Eaton targets first deployment of its 2.5MW medium-voltage solid-state transformer in Singapore in 2Q27 and expects broader adoption later that year; Vertiv expects sidecars in 1H27. Schneider expects its sidecar prototype next year, but sees low-voltage rectifiers arriving in 2028-29 and solid-state transformers only by the end of the decade. The architecture still involves open design questions, including storage location, the role of medium-voltage UPS, the possible use of BESS instead of diesel generation, load smoothing and future microgrids. Liquid cooling is presented as crucial to supporting megawatt-scale rack loads under 800VDC. Alfa Laval, Envicool and Schneider all highlighted this need. Alfa Laval is described as the market leader in copper-brazed heat exchangers used in cooling distribution units and directly supplies eight of the top ten CDU OEMs. Envicool and Vertiv offer cold plates, piping and CDUs, while Schneider's acquisition of Motivair supports prefabricated high-density liquid-cooled AI clusters combining chillers, CDUs and medium-voltage switchgear. The report also notes that direct-to-chip liquid cooling becomes more important as next-generation NVIDIA chips approach thermal limits. Power-generation equipment suppliers reported very strong demand despite different product approaches. Wartsila supplies 9-24MW heavy-duty gas or diesel engines, INNIO offers smaller 1.8-4.5MW gas engines for data centers, Cummins supplies 1-3.25MW diesel engines, and Caterpillar's Solar Turbines span 1-38MW. INNIO reported a 15GW, $7bn order backlog, 64% of which is behind-the-meter, and plans to triple annual Jenbacher production from 1,500 engines in 2025 to 4,500 by 2030. Caterpillar is fully booked through 2027 and is increasing engine and turbine capacity by three times and 2.5 times, respectively. The report links the diverse equipment sizes to different installation models: INNIO's smaller engines are easier to containerize, whereas Wartsila's heavy-duty units are not offered in containerized formats. Modular, prefabricated deployment is becoming more prominent because it reduces construction complexity and time to market. Eaton said modular systems account for 60-70% of demand, up from 10-20% in prior years, and can reduce data-center construction time to one year from a historical two to three years. Vertiv's standardized offsite-prefabricated 50MW modular blocks similarly target a 12-month time to market. Schneider, Envicool and INNIO also offer modular or containerized solutions. Honeywell is a notable exception: it can supply automation and controls for modular projects but does not offer modular systems itself and does not expect one-supplier modular solutions to dominate the market. The report also highlights a shift toward direct, long-duration OEM service relationships as AI workloads raise uptime requirements. Vertiv said customers are locking in 15-20-year service agreements directly with OEMs. INNIO has 20-year service agreements across 100% of its installed base, with recurring service revenue exceeding initial equipment capital expenditure. Wartsila takes a more conservative approach, generally limiting contracts to five years because of long-term inflation risk. Company-specific discussions reinforce the broad industry view. Alfa Laval said data centers account for 5-6% of group sales and are generating triple-digit order growth; it believes that even a 50% market deceleration would not remove the industry's supply pressure. Eaton is expanding capacity, has pre-bought long-lead components, and said it can pass component inflation through to customers. Schneider said its data-center business is close to 30% of sales, with more than 60% of data-center revenue from North America and 65% of global new builds directed to AI workloads. Vertiv is pursuing earlier project engagement, pre-purchasing components two to three years ahead and building local manufacturing capability. Political and environmental scrutiny is rising but had not materially disrupted activity according to the companies cited. Schneider referenced a two-week data-center pause in Thailand, and Wartsila referenced a community-driven project cancellation in Australia, but the report says broader impacts have not yet emerged on the ground. Instead, sustainability concerns are contributing to renewable-power purchase agreements, lower water use and advanced generator technologies. Power constraints have delayed some projects, although Alfa Laval characterized the disruption as less than initially expected.

Analysis framework

Goldman Sachs synthesized management discussions and booth tours at Data Center World, comparing demand signals, order growth, capacity commitments, lead times, product roadmaps and installation models across cooling, electrical equipment, automation, power-generation and service suppliers. The report then uses company-specific observations to assess common infrastructure trends and differences in supplier positioning.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Alfa Laval

  Covered supplier of heat exchangers and cooling equipment for data centers

  Strengths

  Market leader in copper-brazed heat exchangers for CDUs; directly supplies eight of the top ten CDU OEMs; reported triple-digit data-center order growth.

  Weaknesses

  Does not manufacture cold plates and has no aftermarket for liquid cooling.

  Comparison

  Its cooling products can also serve HVAC, heat pumps and oil and gas, unlike data-center-specific equipment.

  Risks

  Power constraints have delayed some projects, although the company said disruption has been less than initially expected.

• Eaton Corp.

  Covered provider of power infrastructure, modular systems and 800VDC equipment

  Strengths

  Developing a 2.5MW medium-voltage solid-state transformer, scaling to 5MW; modular systems represent 60-70% of demand; capacity has been expanded for four to five years.

  Weaknesses

  Its sidecar for refurbishment had not yet been sold.

  Comparison

  Eaton believes medium-voltage UPS may not be necessary in a full 800VDC architecture.

  Risks

  Component inflation remains present, although Eaton said it is passing this through to customers.

• Honeywell International Inc.

  Covered automation and systems-integration provider for data centers

  Strengths

  Vendor-agnostic building-management systems, power management, physical security and fire protection; benefits from data centers becoming power-generating assets.

  Weaknesses

  Does not provide modular systems or whitespace mechanical cooling.

  Comparison

  Competes with Schneider Electric, Siemens and JCI, and with Rockwell and Emerson in automation.

  Risks

  High-voltage transformer lead times of 2.5-3 years can affect project timing.

• INNIO

  Covered supplier of gas engines for base-load and backup data-center power

  Strengths

  15GW, $7bn backlog; reservations through 2031; smaller engines are easier to containerize; 20-year service agreements cover 100% of its installed base.

  Weaknesses

  Pricing per MW depends significantly on project scope and region.

  Comparison

  Its 1.8-4.5MW data-center engines are smaller and easier to install than Wartsila's heavy-duty units.

  Risks

  Large manufacturing expansion is required to lift annual Jenbacher production to 4,500 engines by 2030.

• Schneider Electric

  Covered supplier of data-center power, cooling, software and modular infrastructure

  Strengths

  Data-center business close to 30% of sales; triple-digit order growth; broad electrical, cooling and software portfolio; regional manufacturing for Motivair.

  Weaknesses

  Its low-voltage rectifier roadmap is expected only in 2028-29 and solid-state transformers by the end of the decade.

  Comparison

  Offers an industry-first 660kV sidecar prototype and works with NVIDIA on 3D data-center digital twins.

  Risks

  Political scrutiny and moratoriums have increased, although management said they had not affected the business.

• Shenzhen Envicool Technology

  Covered supplier of air and liquid cooling, modular solutions and energy storage

  Strengths

  NVIDIA-certified cooling offerings, three-to-four-month lead times, global modular solutions and manufacturing across China, Thailand and Dallas.

  Weaknesses

  Faces direct competition from Vertiv.

  Comparison

  Differentiates through pricing, customization and lead times enabled by Chinese supply chains.

  Risks

  Competitive intensity in cooling equipment remains significant.

• Vertiv

  Covered provider of power, thermal and service solutions for data centers

  Strengths

  Broad power, thermal and service portfolio; 50MW prefabricated modular blocks; 5,300 service engineers; early project engagement and long-duration service agreements.

  Weaknesses

  Requires advance purchasing of key components two to three years ahead to manage supply constraints.

  Comparison

  The report characterizes Vertiv as one of a limited number of full-suite companies with deep expertise.

  Risks

  Supply-chain constraints remain a consideration despite localization and pre-purchasing.

Key data

• Cooling-solution lead times3-4 monthsReported for suppliers including Alfa Laval and Envicool
• Low-voltage data-hall product lead times9-13 monthsReported by Honeywell
• High-voltage transformer lead times2.5-3 yearsReported in Honeywell's data-center commentary
• Engine lead times20-24+ monthsReported for Cummins, INNIO and Wartsila equipment
• INNIO order backlog15GW, valued at $7bn64% is behind-the-meter
• INNIO annual Jenbacher production plan1,500 engines in 2025 to 4,500 by 2030A planned tripling of annual capacity
• Eaton modular-system demand share60-70%Versus 10-20% in prior years
• Data-center construction time with modular systems1 yearVersus a historical two to three years, according to Eaton
• Schneider Electric data-center businessClose to 30% of salesReported to have triple-digit order growth and double-digit sales growth
• AI share of global new data-center builds65%Schneider Electric's estimate

Impact & implications

The report argues that the current data-center build cycle is extending demand across multiple equipment categories rather than concentrating it in a single technology. It highlights modular construction, liquid cooling, 800VDC equipment and long-term service arrangements as important areas of supplier participation as AI infrastructure becomes denser and more operationally critical.

Risks

• Political and environmental opposition to data-center development could become more material, despite limited reported operational impact so far.
• Power constraints can delay projects.
• Tight capacity and long lead times for engines, transformers and certain electrical products can constrain deployment schedules.
• Key 800VDC design choices, including storage, UPS, BESS and load-smoothing configurations, remain unsettled.
• Long-duration service agreements can expose suppliers to inflation risk, which Wartsila cited in limiting contract duration.