Korea power equipment

Research evidence excerpt

Korea power equipment

Macquarie Equity Research Korea power equipment

Executive Summary

• Threat posed by SSTs to the transformer industry may be overstated, in our view.

Investor concerns surrounding SST have increased significantly following NVIDIA's 800VDC

roadmap. In many cases, SSTs are being viewed as a potential disruptive threat to the

transformer industry as a whole. We believe this framing lacks important nuance. The

transformer industry is not a homogeneous market, and the economic rationale supporting

SST deployment varies significantly across voltage classes and applications. We believe the

areas most exposed to SST adoption are not necessarily the UHV transformers serving

transmission networks, but rather electrical equipment located closest to increasingly DC-

native loads such as AI data centres.

• AI is creating the first commercially relevant market for SSTs. We believe the most

important development is not the technology itself, but the emergence of an end market

in which SST economics may finally work. SST concepts have existed for decades and

have historically been explored across railway systems and EV charging infrastructure.

However, commercial adoption remained limited because conventional transformers were

already sufficiently efficient and reliable for most applications. AI factories are changing

that equation. As rack densities move from tens of kilowatts toward megawatt-scale

deployments, power density, footprint efficiency, and conversion losses are becoming

increasingly important design considerations. This creates the first commercially meaningful

environment in which the benefits of SSTs may justify their additional complexity and cost.

• The transition will be evolutionary, not disruptive. We do not expect the transition