China Great Wall: U.S. power grid equipment expected to start mandatory update cycle, benefiting the demand for domestic AI power equipment to go abroad.

China Great Wall released a research report stating that according to IEA data, global electricity grid investments have been rapidly increasing since 2020, with global grid investments reaching 390 billion US dollars by 2024 and expected to exceed 400 billion US dollars by 2025. The majority of the energy infrastructure in the United States is below standard levels, and with the significant increase in AI electricity demand, the US grid equipment is expected to enter a period of mandatory updates. The significant growth in AI data center electricity demand is expected to directly drive the demand for transformers, high-voltage cables, and other equipment, with China's grid equipment exports continuing to see high growth in 2025, benefiting domestic export companies. Major points from China Great Wall include: - Strong demand for global grid equipment with steady growth in investment scale - Demand for grid equipment in regions like the United States continues to rise due to the need for equipment upgrades, AI demand, and supply constraints. According to IEA data, global grid investments have been rapidly increasing since 2020, with global grid investments reaching 390 billion US dollars by 2024 and expected to exceed 400 billion US dollars by 2025. The majority of the energy infrastructure in the United States is below standard levels, coupled with a significant increase in AI electricity demand, the US grid equipment is expected to enter a period of mandatory updates. - Significant increase in electricity demand from AI data centers - According to IEA data, global data center electricity consumption is estimated to be around 415TWh in 2024, and is expected to increase to 945TWh by 2030, with an annual growth rate of about 15%. By 2030, the United States and China are expected to account for 80% of global data center electricity demand. Compared to 2024, by 2030, data center electricity consumption in the United States may increase by 240TWh (+130%), China by 175TWh (+170%), and Europe by 45TWh (+70%). The significant growth in electricity demand from AI data centers is expected to directly drive the demand for transformers, high-voltage cables, and other equipment, benefiting related domestic export companies. - Supply constraints for grid equipment overseas provide opportunities for Chinese companies to expand internationally - The delivery cycle for transformers in the United States has already extended from 50 weeks to over 120 weeks. Chinese companies related to grid equipment have relative advantages in terms of delivery time, technology, and cost, and export orders for equipment such as transformers are expected to continue to benefit. - The grid equipment industry welcomes new opportunities for development with policy support - Internally, during the "Thirteenth Five-Year Plan" period, national grid investment is expected to reach 4 trillion yuan, a 40% increase from the "Twelfth Five-Year Plan" period. On the international front, the "Stable Growth Plan for the Electric Power Equipment Industry (2025-2026)" clearly states the importance of actively exploring international markets, deepening cooperation with emerging markets, guiding companies to rationally and orderly expand their overseas presence, enhancing product quality, building a brand image for electric power equipment, and encouraging component manufacturing companies to integrate into overseas supply chains, etc. - Continuous high growth in Chinese grid equipment exports - According to data from the General Administration of Customs, the total export value of transformers in 2025 was 9.036 billion US dollars, with a cumulative growth rate of 34.83%, reaching a historical high. In December 2025, among the key exported power equipment products, the month-on-month growth rates of transformers, electrical cables, copper windings, low-voltage switches, and insulators were 31.92%, 22.20%, 11.71%, 10.60%, and 31.91%, respectively, demonstrating a trend of high growth in multiple varieties, with the single-month export amount showing an upward trend. In 2026, driven by multiple factors of domestic and foreign demand, the export of key grid equipment products is expected to continue to show positive trends. Risk warning: risks of overseas economic downturn; fluctuations in Fed policy expectations; uncertainty risks in overseas tariff policies; risks of escalating geopolitical conflicts, etc.