Power and cooling equipment suppliers see surge in demand amid global data centre construction boom

The global data centre construction boom is driving strong demand for transformers, power infrastructure, and advanced cooling systems as developers race to overcome infrastructure bottlenecks and meet surging artificial intelligence-related demand. While graphics processing unit developers dominate headlines, a group of power and cooling equipment suppliers is cashing in on the construction spree.

Energy-hungry data centres have triggered a surge in demand for equipment ranging from transformers to advanced cooling systems, creating winners across Asia's supply chain, although earlier stock-price gains have moderated. McKinsey forecasts nearly $7 trillion in data-centre investment globally by 2030, while Nvidia expects AI spending to remain robust for years.

Building data centres fast enough to meet demand is becoming more difficult. Hyperscalers often want facilities delivered within six months, but grid connection delays can stretch as long as 24 months in some emerging markets and more than eight years in major developed markets, according to consultancy Pivotale AI. Wing Kin Cheung, the CEO of digital infrastructure service provider BodaData, noted that within the industry, people frequently question the lead time for generators and transformers.

Transformers convert high-voltage electricity from grids into levels suitable for servers, cooling systems, and power distribution units. Leading transformer suppliers, including South Korea's HD Hyundai Electric and China's Hainan Jinpan Smart Technology, reported surging demand in the first half of 2026 tied to AI infrastructure projects, particularly in North America. HD Hyundai Electric noted that demand in Europe was rising as U.S. hyperscalers expanded investments in markets like Finland, Germany, and Britain, while Middle Eastern demand remained strong.

HD Hyundai Electric's order backlog rose 23% to $8.5 billion at the end of June from six months earlier. The company stated it has an order backlog covering more than three years, with production capacity for major power equipment secured for that period, and is in order discussions for volumes scheduled for delivery as far out as 2030. For Jinpan, new data-centre orders in the first half more than quadrupled from a year earlier, while its related backlog nearly tripled.

As AI chips consume more electricity, equipment makers are also betting on technologies aimed at improving efficiency and reducing environmental impacts. Bank of America estimates power consumption per AI rack could climb to more than 1.5 megawatts by the end of 2030, nearly 100 times that of a conventional rack. A technology attracting greater attention is the solid-state transformer, which replaces bulky magnetic coils and copper windings with semiconductors to transform and route electricity. UBS estimates solid-state transformers will increase power efficiency by around 4% and reduce costs.

Cooling systems are emerging as another growth area as operators struggle to manage heat. Bank of America forecasts liquid cooling will account for 70% of new AI data-centre installations versus air cooling by 2030, up from about 30% today. McKinsey states liquid cooling can reduce energy consumption by over 27%. Strong demand for thermal-management products is lifting Delta Electronics, Asia Vital Components, Auras Technology, and Shenzhen Envicool Technology.

Despite surging orders, stock-price gains of suppliers have moderated as investors question elevated valuations amid intensifying competition. Delta's shares are up more than 90% this year, while HD Hyundai Electric has stayed largely flat. China's Jinpan and Envicool have fallen nearly 30% and 20%, respectively. Delta Chairman Ping Cheng noted that gross margins will likely remain at roughly current levels given variables such as new product platforms, deployment delays, and component shortages.

"The data centre boom highlights a critical business reality: infrastructure constraints often dictate the pace of technological adoption. While software and chip developers capture public attention, the underlying supply chain for power and cooling holds the actual keys to scaling AI. Investors and entrepreneurs must look beyond the immediate end-product and evaluate operational lead times, grid bottlenecks, and supply chain dependencies when assessing long-term viability in this sector." — Dr. Shishir Gupta, Founder & CEO, StartupLanes