By COMFORT OGBONNA
The global race to build data centers for artificial intelligence is creating major opportunities for a group of power and cooling equipment manufacturers that operate largely outside the spotlight surrounding the biggest technology companies.
As demand for AI computing continues to expand, data center developers are facing a growing challenge: finding enough electricity and the equipment needed to deliver it reliably. Transformers, generators, power distribution systems and advanced cooling technologies have consequently become critical components of the rapidly expanding data center industry.
The global data center investment boom is expected to reach extraordinary levels in the coming years. McKinsey estimates that nearly $7 trillion could be invested in data centers worldwide by 2030, reflecting expectations that demand for computing capacity will continue rising as companies deploy AI systems and other data-intensive technologies.
The scale and speed of construction, however, are creating pressure throughout the infrastructure supply chain.
Data center operators increasingly want facilities completed within months, but securing connections to electricity grids can take far longer. In some emerging markets, delays can extend to about two years, while projects in major developed markets can face waiting periods of more than eight years, according to industry estimates.
That has shifted attention toward companies capable of supplying the equipment needed to power and cool data centers.
Transformers are particularly important because they convert high-voltage electricity from power grids into usable levels for servers, cooling equipment and other systems inside data centers. As AI systems require increasingly large amounts of electricity, demand for high-capacity transformers has accelerated.
South Korea’s HD Hyundai Electric and China’s Hainan Jinpan Smart Technology have both reported strong demand for equipment connected to AI infrastructure projects, particularly in North America.
HD Hyundai Electric has also seen growing demand from Europe as major U.S. technology companies expand their data center investments in countries including Finland, Germany and Britain. Demand from the Middle East has remained strong as well.
The company’s order backlog reached about $8.5 billion at the end of June, an increase of 23% from six months earlier. The company has said its production capacity is heavily committed for several years, reflecting the difficulty developers face in securing major power equipment.
Some customers are already discussing deliveries extending as far as 2030, highlighting the long lead times associated with large electrical infrastructure projects.
Jinpan has experienced a similar surge. Orders related to data centers more than quadrupled during the first half of 2026 compared with the same period a year earlier, while its related backlog nearly tripled.
The growing demand is not limited to traditional transformers.
As AI chips become more powerful and consume more electricity, equipment manufacturers are developing new technologies designed to improve efficiency, reduce energy losses and address concerns about the environmental impact of data centers.
One technology receiving increasing attention is the solid-state transformer. Unlike conventional transformers, which rely heavily on magnetic components and copper windings, solid-state transformers use semiconductor technology to transform and manage electricity.
The technology remains in the early stages of commercial adoption, but analysts expect its use to increase as data centers demand more efficient ways to manage increasingly large electrical loads.
UBS estimates that solid-state transformers could improve power efficiency by about 4% while also lowering costs. The firm expects the technology’s penetration to reach about 40% of the relevant market by 2030, with Chinese manufacturers potentially gaining a significant share because of their technological capabilities and lower production costs.
HD Hyundai Electric and Jinpan are among the companies investing in the development of solid-state transformer technology.
Taiwan-based Delta Electronics is also expanding its presence in the sector. The company has said a small data center is already using its solid-state transformers and that demand for AI-related power, cooling and data center infrastructure remains an important source of growth.
Delta is expanding manufacturing capacity in Thailand, the United States and China as it prepares for higher demand.
Cooling technology is becoming just as important as electricity supply.
The powerful processors used for AI generate enormous amounts of heat, requiring sophisticated systems to keep servers operating within safe temperature ranges. As computing power increases, traditional air cooling is increasingly being supplemented or replaced by liquid-based systems.
Industry analysts expect liquid cooling to account for about 70% of new AI data center installations by 2030, compared with roughly 30% today.
Liquid cooling can also significantly reduce the amount of energy required to manage heat. McKinsey estimates that the technology can cut cooling-related energy consumption by more than 27% under appropriate conditions.
The increasing focus on cooling is creating opportunities for companies that manufacture thermal-management equipment, including Delta Electronics, Asia Vital Components, Auras Technology and China’s Shenzhen Envicool Technology.
These companies are benefiting from their positions within the broader AI hardware supply chain.
The power requirements of AI data centers are expected to rise sharply. Bank of America estimates that electricity consumption per AI rack could exceed 1.5 megawatts by the end of 2030, a level that would be dramatically higher than the power requirements of conventional server racks.
That growth is encouraging developers to consider alternative approaches to data center construction and energy supply.
Some companies are examining floating data centers, underwater facilities and installations in underground tunnels or caves. Other projects are looking at generating electricity directly at data center sites rather than relying entirely on traditional power grids.
Such developments could create opportunities for manufacturers that previously had limited exposure to the data center industry.
HD Hyundai Electric, for example, has identified potential opportunities related to marine engines as interest grows in floating data centers and facilities capable of generating their own electricity.
Despite the strong demand, investors have become more cautious about some of the companies benefiting from the data center boom.
Share-price gains have moderated in several cases as valuations have risen and competition has intensified. Delta Electronics’ shares have gained more than 90% this year, while HD Hyundai Electric has remained broadly flat after recording gains of more than 100% last year.
Jinpan and Envicool have also given back some of their previous gains. Their shares have declined nearly 30% and 20%, respectively, after rising sharply in 2025.
The changing market conditions have raised questions about how much of the industry’s rapid revenue growth will translate into higher profit margins.
Delta Chairman Ping Cheng has warned that new product platforms, project delays and shortages of components could create additional challenges during the second half of the year.
Competition is also likely to become more intense as manufacturers seek to capture a larger share of the growing data center infrastructure market.
For investors, the rapid expansion of AI infrastructure therefore presents both an opportunity and a risk. Companies supplying essential equipment could benefit from years of strong demand, but rising valuations, supply constraints and competition could make it difficult for every supplier to maintain its recent growth.
As data centers become increasingly central to the global AI economy, the companies providing the electricity, transformers and cooling systems required to keep them running could become some of the industry’s most important beneficiaries.
The biggest winners, however, are likely to be those manufacturers that can secure long-term customers, expand production without sacrificing profitability and deliver specialized equipment quickly enough to meet the industry’s accelerating construction schedule.
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