Future of Tech: AI Data Centers to Unlock Solid State Transformation
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Bernstein highlights that AI data centers are accelerating the adoption of solid-state transformers (SST). By utilizing semiconductor power electronics instead of traditional copper-and-iron designs, SST technology offers superior efficiency, enhanced control, and a more compact footprint. The market opportunity is substantial, with the US SST market projected to reach $3 billion by 2030. Under a blue-ocean value-pricing scenario, this market could expand to nearly $10 billion. The commercialization timeline targets pilot programs in 2026, commercial launches in 2027, and industrial scaling during 2028-2029. Eaton has already secured medium-voltage SST orders, with deliveries anticipated as early as 4Q26. This technological shift presents a notable disruption to traditional European electrical OEMs, as SSTs threaten to erode the control functionalities of low-voltage switchgears. Bernstein identifies OEMs that proactively establish strong positions in the SST sector as best positioned to navigate this transformation. The firm assigns Outperform ratings to Eaton (Target Price: $428), ABB (Market-Perform, Target Price: CHF 65), Schneider (Target Price: €300), Siemens (Target Price: €290), and Legrand (Target Price: €150), though Legrand faces heightened risks if SST scaling occurs rapidly.