Delivery equals justice! goldman sachs: The Aging U.S. Power Grid Is Providing Historic Opportunities for China's Power Industry Chain

The core contradiction in AI infrastructure development is shifting: from merely pursuing the number of GPUs to competing for the speed of power supply. In the context where "Time-to-Power" has become the most severe bottleneck in AI construction, Chinese power solution providers with rapid delivery capabilities and large-scale production advantages are facing a historic opportunity for value reassessment.

According to information from Chasewind Trading Desk, the Goldman Sachs team led by Jacqueline Du stated in a report released on the 14th that the average lifespan of power grids in the United States and the European Union has reached 35 to 40 years. In the face of the explosive energy consumption demand from AI data centers (AIDC), the infrastructure is becoming increasingly fragile. Currently, the domestic power equipment production capacity in the United States can only meet about 40% of local demand, and the grid connection waiting time has extended to nearly five years. This mismatch between supply and demand is forcing U.S. utility companies and data center operators to break traditional practices and start accepting non-traditional suppliers to fill this years-long supply gap.

This structural shortage is reshaping the pricing power of supply chains. Goldman Sachs emphasizes in its report that for qualified Chinese suppliers, their winning advantage is no longer just low cost, but shorter delivery cycles.Driven by severe shortages, Chinese enterprises enjoy a significant premium on product pricing in overseas markets compared to domestic sales, with the premium ranging from 10% to 80%.This provides relevant companies with extremely high profit visibility.

Based on this, Goldman Sachs has expanded its coverage of the AIDC power supply chain, focusing on companies that can address the "power delivery" bottleneck. Goldman Sachs has provided a clear preference ranking for product categories related to power supply in China.Gas turbine blades > Power transformers > Electrical components > Uninterruptible power supply/power rack > Liquid cooling system > Server power supply.The bank believes that Chinese companies with advanced high-voltage direct current (HVDC) expertise, high-density power conversion capabilities, and mature OEM/ODM relationships will leverage this spillover demand to achieve rapid expansion.

U.S. Power Bottleneck: Supply Gap Continues Until 2030

The power demand of data centers in the United States is experiencing explosive growth. Goldman Sachs predicts that.By 2030, the electricity consumption of data centers in the United States (including AI and non-AI) is expected to increase by approximately 175% compared to 2023, contributing about 120 basis points to the overall electricity demand in the United States and driving the annual growth rate to 2.6%.

Power supply shortages are particularly severe in the United States. According to data from Goldman Sachs, during the period of 2025-2030, the effective peak reserve power capacity in the U.S. is expected to further decline during the summer, while China's reserve capacity is expected to rise. Even if U.S. domestic power transformer suppliers complete their announced capacity expansion plans, by 2027 they will only be able to meet about 40% of local demand.

On the generation side, gas turbines have become the bottleneck of bottlenecks.Goldman Sachs pointed out that approximately 60% of the power for AI data centers is expected to come from natural gas due to its fast construction speed, stable output, low carbon emissions, and the ability to generate power on-site, bypassing grid limitations. Major gas turbine manufacturers such as Siemens Energy, General Electric, and Mitsubishi Heavy Industries have order backlogs reaching 4.5 to 5 years, with Siemens Energy explicitly stating that its gas turbine production capacity is sold out until 2028.

In the transmission and distribution sector, power transformers are facing the most urgent supply shortage. Siemens Energy predicts that the transformer shortage rate in the EU and the US will be around 30% in 2025, expected to ease to about 10% by 2030. Each transformer needs to be customized according to unique standards for impedance, cooling, tap changers, overload, and seismic resistance, making the production process labor-intensive and lengthy.

39% Compound Growth: 800V DC Architecture Brings Technological Upgrade Cycle

Goldman Sachs estimates,The total addressable market for AI data center power products is expected to expand at a compound annual growth rate of approximately 39% between 2025 and 2030.Gas turbines, power transformers, uninterruptible power systems, server power supplies, electrical components, liquid cooling systems, and seven other product categories.

This growth is driven by three major factors: continuous capacity building, increasing power density, and the transition from primarily AC to primarily DC architecture. As AI rack power increases from 100kW to higher levels, even approaching 1MW, the engineering complexity in areas such as rectification, protection, cooling, and energy storage integration rises comprehensively, creating a greater value pool for DC-ready components and grid-connected assets.

The 800V DC distribution architecture is becoming the standard configuration for most AI data center greenfield projects under construction, with some pilot projects already exploring approximately 800V DC busbars.Goldman Sachs pointed out that compared to traditional communication topology, adopting higher voltage DC distribution can save about 5-15% in energy consumption at the facility level. Key manufacturers like NVIDIA have fully committed to transitioning to an 800V DC architecture roadmap, and major ecosystem participants are aligning their product roadmaps with DC-ready power conversion, protection, and battery storage system integration.

The architecture upgrade creates structural opportunities for suppliers of DC power infrastructure components. Goldman Sachs is particularly optimistic about Hongfa Co., Ltd in the high-voltage DC relay sector and Jianghai Co., Ltd in the capacitor sector, believing that existing AI data center-related orders have already provided a more direct boost to their core businesses. As the demand for duration rises, product portfolios should lean towards higher specification high-voltage DC relays and supercapacitors (with electric double layer capacitors leading the growth, followed by lithium-ion capacitors).

Delivery Speed Determines Success: The Core Competitiveness of Chinese Suppliers

Goldman's analysis of eight key product categories indicates that for qualified Chinese suppliers capable of capturing spillover demand,A decisive competitive advantage is not only lower costs, but more importantly, shorter delivery cycles.

Facing a 3-5 year wait time for critical components, data center operators and utility companies have prioritized delivery speed as a key decision factor, outweighing their historical preferences for suppliers. Although challenges in global service capacity still exist, in the current constrained supply environment, the value proposition of fast delivery combined with acceptable quality is compelling.

Taking electric transformers as an example, Siyi Electric's short delivery cycle enables it to gain market share in the U.S. market. Goldman Sachs forecasts that the revenue from the U.S. market will increase from 26% of Siyi Electric's overseas revenue in 2026 to 28% in 2028. Goldman Sachs noted that only a few Chinese companies can combine high quality with long-term commitment, navigating the market through rigorous certification processes, continuous upfront investment, and a proven track record of overseas performance, in which Siyi Electric excels.

In the field of gas turbine blades, Ingleit, as a leading domestic manufacturer of high-end precision castings, currently holds less than 1% of the global market share, indicating significant growth potential. The company has signed long-term agreements with Baker Hughes, Ansaldo, and General Aviation. Goldman Sachs believes that Ingleit will benefit from the shortage of gas turbine supplies, achieving growth as a supplementary supplier.

Pricing Power Evident: Overseas Order Gross Margin Premium Ranges from 10% to 80%

Due to severe supply shortages,Chinese suppliers can obtain a significant price premium of 10% to 80% in overseas markets compared to domestic sales.Goldman Sachs pointed out that although production remains concentrated in China to maintain the key advantage of delivery cycles, even taking into account the rising costs related to tariffs and logistics, the eventual increase in profit margins is still significant.

This opportunity is not universally available but concentrated among a few top Chinese industrial enterprises that possess the ability for scale, quality control, and serving international customers. Taking power transformers as an example, Siyuan Electric's product gross margin in the U.S. is about 45%, while the domestic sales gross margin is about 30%; Huaming Power's overseas sales gross margin is approximately 40%, with a domestic sales gross margin of about 25%.

In the uninterrupted power supply system sector, Kstar's overseas ODM model can achieve a pricing premium of 25-50% compared to domestic ultra-large-scale customer orders. Goldman Sachs estimates that Kstar's overseas high-power electrical system sales will surge from RMB 100 million in 2025 (accounting for 2% of total revenue) to RMB 800 million in 2026 and RMB 1.782 billion in 2028 (accounting for 11% and 15% of total revenue, respectively), mainly driven by order execution serving American end-users through European clients.

Goldman Sachs estimates show that under exposure to the U.S. market, the average compound annual growth rate of sales for the covered companies between 2025-2030 could reach 23%, while excluding the U.S. market, it would be 17%. By 2030, the revenue contribution from overseas AI data center markets (mainly the U.S.) for these Chinese companies is expected to average 23%, with a global market share averaging 4%.

Product priority order: gas turbine blades > power transformers > electrical components

Goldman Sachs has provided a clear preference ranking for product categories related to power supply in China.Gas turbine blade > power transformer > electrical component > uninterruptible power supply/power rack > liquid cooling system > server power supply.

Gas turbine blades rank the highest due to their extremely high barriers in materials science and manufacturing—especially in single-crystal high-temperature segment technology—and severely limited global effective capacity. Power transformers follow closely, benefiting from labor-intensive manufacturing and lengthy certification cycles. Electrical components benefit from strong demand visibility and broad exposure to AI and grid infrastructure construction, but due to easier scalability in manufacturing, they have less structural advantage in delivery cycles or differentiation.

The uninterrupted power supply/power rack system benefits from a differentiated ODM business model, enabling companies like Kstar to enter the US market; liquid cooling systems also enjoy structural growth, with their quantity and content value increasing as power density improves, though they face relatively fierce global competition. Server power ranks the lowest because, compared to global peers, there is still a significant gap in products/scale, and rapid technological iterations bring uncertainties of technological disruption.