Orient Securities released a research report stating that SST is expected to become the optimal choice for DC power transformation in data centers in the long term. NVIDIA (NVDA.US) highlighted SST as a mainstream technical solution for future power architectures in its AIDC whitepaper. The demand for new power solutions like HVDC and SST is well-defined, with AI servers and data centers likely to expand the growth potential for SiC/GaN power devices. Additionally, advancements in HVDC and SST solutions, along with the maturity of SiC/GaN power devices, could help server power supply manufacturers capture new market opportunities.

Key insights from Orient Securities include:

**AIDC Emphasizes High Voltage and Efficiency, Driving Demand for HVDC and SST Solutions** The shift from general computing to AI computing has led to a surge in power demand for AIDC, making high voltage and efficiency critical trends. Current power supply chains involve multiple AC/DC and DC/DC conversions, leading to efficiency losses, increased failure risks, and higher maintenance costs. As single-rack power consumption continues to rise, traditional AC distribution solutions will escalate capital and operational expenses for next-gen data centers. Consequently, more efficient, compact, and intelligent power architectures are urgently needed.

To enhance data center power efficiency, NVIDIA and industry partners proposed an 800V HVDC power architecture, which could significantly improve efficiency and reduce electricity costs. Furthermore, SST (solid-state transformers) are poised to become the mainstream solution for power transformation. SST leverages power electronics for energy transfer and conversion, offering higher efficiency, superior power quality, modularity, and stability compared to traditional transformers, thereby improving space utilization and power efficiency. NVIDIA’s AIDC whitepaper identifies SST as the leading long-term power architecture solution.

**Some Investors See Limited Growth Potential for SiC/GaN Industry** According to Yole and CIC data, SiC penetration in global power semiconductors reached 4.9% in 2024, while GaN accounted for 0.5% in 2023 (per Frost & Sullivan). Some investors believe the growth potential for wide-bandgap semiconductors may be constrained due to factors like the increasing adoption of SiC in new energy vehicles.

However, Orient Securities argues that new AIDC power solutions like HVDC and SST will boost demand for SiC/GaN devices, unlocking industry growth. Compared to traditional silicon-based devices, wide-bandgap semiconductors enhance power density and reduce transformer size. Future HVDC architectures will require SiC/GaN for SST and DC-DC power supplies. NVIDIA has already partnered with Navitas Semiconductor, Innoscience, Infineon, and other SiC/GaN manufacturers.

The firm believes the full potential of SiC/GaN in AIDC power systems remains untapped. Data from Hangjiasan and Navitas suggests the market for SiC/GaN in 800V HVDC data center power systems could reach $2.7 billion by 2030. As AI computing infrastructure expands, demand for SiC/GaN devices is expected to rise, further driving industry growth.

**Risks:** Weak consumer electronics demand, slower-than-expected AI adoption, and shifting competitive dynamics.