Global Market: Data centre boom fuels demand for power, cooling equipment suppliers

While Nvidia has become synonymous with the artificial intelligence boom, a lesser-known group of power and cooling equipment suppliers is benefiting from the global surge in data centre construction as developers race to overcome infrastructure bottlenecks, Reuters reported.

Energy-intensive data centres are driving demand for equipment ranging from transformers and power-management systems to advanced cooling technologies. The trend is creating opportunities across Asia's supply chain, although gains in several related stocks have moderated after sharp rallies.

McKinsey estimates that nearly $7 trillion could be invested in data centres globally by 2030. Nvidia has also indicated that AI-related spending is likely to remain strong for years, underscoring expectations of sustained demand for the infrastructure needed to support AI workloads.


However, expanding data centre capacity is becoming increasingly difficult as developers face delays in securing power and connecting new facilities to electricity grids. Consultancy Pivotale AI estimates that grid connection delays can reach 24 months in some emerging markets and more than eight years in major developed economies.

The lengthy timelines are putting greater focus on equipment such as transformers, which convert high-voltage electricity from the grid into levels suitable for servers, cooling systems and power distribution units.

Transformer Demand Surges
Leading transformer manufacturers are seeing a sharp increase in orders linked to AI infrastructure projects, particularly in North America.

South Korea's HD Hyundai Electric reported strong demand during the first half of 2026, with the company also seeing increased interest from Europe as U.S. hyperscalers expand investments in Finland, Germany and Britain. Demand from the Middle East has remained strong as well, according to Reuters.

The company's order backlog increased 23% to $8.5 billion at the end of June from six months earlier. The company expects data centre demand to remain robust and has production capacity for major power equipment largely committed for the next three years.

China's Hainan Jinpan Smart Technology has also benefited from the trend. New data centre orders in the first half of 2026 more than quadrupled from a year earlier, while its related backlog nearly tripled.

AI Pushes Demand For More Efficient Power Systems
The rapid growth in AI computing is also increasing demand for technologies that can improve energy efficiency and reduce the environmental footprint of data centres.

Bank of America estimates that power consumption per AI rack could rise to more than 1.5 megawatts by the end of 2030, based on Nvidia's technology roadmap. That would be nearly 100 times the power consumption of a conventional rack.

One technology attracting increasing attention is the solid-state transformer, or SST. Unlike traditional transformers that rely on bulky magnetic components and copper windings, SSTs use semiconductor technology to transform and route electricity.

UBS estimates that SSTs could improve power efficiency by around 4% and reduce costs. Commercial adoption remains at an early stage, but the bank expects penetration to reach 40% by 2030 and sees Chinese manufacturers gaining market share because of their technological capabilities and cost advantages.

HD Hyundai Electric and Jinpan are expanding their work on SST technology. Taiwan's Delta Electronics, another major power infrastructure supplier, has said a small data centre is already using its SSTs.

Delta told Reuters that demand for AI power, cooling and data centre infrastructure solutions remains a key growth driver. The company is expanding its production footprint in Thailand, the United States and China to meet rising demand.

Read more: AI data centre demand fuels Fervo Energy’s geothermal growth story

Cooling Becomes Critical
Power infrastructure is only one part of the data centre supply chain. Cooling systems are becoming increasingly important as more powerful AI chips generate substantially more heat.

Bank of America expects liquid cooling to account for 70% of new AI data centre installations by 2030, compared with around 30% currently. McKinsey estimates that liquid cooling can reduce energy consumption by more than 27%.

The shift is creating opportunities for companies supplying thermal-management equipment, including Delta Electronics, Taiwan's Asia Vital Components and Auras Technology, as well as China's Shenzhen Envicool Technology. These companies are among suppliers operating within Nvidia's broader ecosystem.

Data centre developers are also examining unconventional infrastructure models, including floating and underwater facilities as well as installations in caves and tunnels. Such projects could widen the addressable market for power-generation and cooling equipment.

HD Hyundai Electric has highlighted the potential for marine medium-speed engines as data centre operators expand self-generation and explore floating data centre concepts.

Supply Constraints And Valuations Remain Risks
Despite strong order growth, investor enthusiasm toward some data centre equipment suppliers has cooled as valuations have risen and competition intensifies.

Delta's shares have gained more than 90% this year, while HD Hyundai Electric has remained broadly flat after rising more than 100% last year. Jinpan and Envicool have declined nearly 30% and 20%, respectively, following gains of about 118% and 244% in 2025.

The companies are also facing potential pressure from component shortages, deployment delays and the introduction of new product platforms.

Bank of America has cautioned that investors need to be selective because rising AI infrastructure spending will not benefit every supplier equally.

For equipment manufacturers, the data centre boom therefore represents a significant long-term opportunity, but capacity constraints, competition, valuations and the pace at which AI infrastructure is deployed will determine which companies ultimately emerge as the biggest winners.