China’s power supply industry is racing to meet the demands of the AI era. Propelled by the surge in generative AI and the buildout of data center infrastructure, the country’s three largest PSU makers by revenue—Shenzhen Honor Electronic, Great Wall Power Technology, and Shenzhen Megmeet Electrical—are rapidly expanding into the higher-margin server power supply market.
Honor Electronic and Great Wall Power Technology are aligning their 2025 roadmaps around third-generation semiconductors, a shift that typically enables higher efficiency, better power density, and improved thermal performance. By tapping materials such as silicon carbide and gallium nitride, they are positioning to serve AI servers and cloud data centers that need reliable, high-wattage power delivery with tighter energy budgets.
Shenzhen Megmeet Electrical is pursuing a differentiated strategy. Rather than pivoting immediately to wide-bandgap devices, the company is doubling down on silicon-based IGBTs, aiming to balance performance with cost efficiency. Its approach includes lowering procurement costs for rare-earth permanent-magnet components, accelerating development of Power Rack solutions, and broadening its product portfolio to cover more rack-level and system-level power applications. This could give Megmeet pricing flexibility and supply chain resilience in segments where cost and availability are critical.
All three manufacturers are targeting server PSUs for their relatively higher margins, but the profitability trajectory tells a nuanced story. From 2019 to 2024, their PSU gross margins have grown less steadily than those of leading Taiwanese competitors such as Delta Electronics and Lite-On Technology. The gap suggests that while Chinese vendors are moving upmarket, they are still navigating challenges like component cost volatility, technology transitions, and intense pricing pressure in global tenders.
What this means for the market is clear: demand for efficient, high-density server power is soaring as AI training and inference workloads proliferate. Third-generation semiconductors promise meaningful gains in efficiency and compactness, which can cut operating costs and free up space in dense racks. At the same time, a cost-optimized path built around mature silicon IGBTs and streamlined sourcing could appeal to buyers seeking dependable performance without premium pricing. Expect fierce competition on both technology and total cost of ownership as these strategies play out.
Looking ahead to 2025, watch for rapid iteration in server PSU designs, including higher power ratings, improved thermal solutions, and rack-level power innovations. If Honor and Great Wall execute well on wide-bandgap adoption, they could narrow the margin stability gap with established rivals. If Megmeet’s cost-first approach scales effectively with robust Power Rack offerings, it may win share in high-volume deployments where budget and availability dominate decision-making.
Key takeaways:
– Generative AI is accelerating the shift toward higher-margin server PSUs among China’s top PSU makers.
– Honor Electronic and Great Wall Power Technology are prioritizing third-generation semiconductors to boost efficiency and power density.
– Shenzhen Megmeet Electrical is focusing on silicon IGBTs, supply chain cost reductions, and Power Rack solutions to expand its portfolio.
– Despite progress, Chinese vendors’ PSU margin growth from 2019 to 2024 has been less stable than that of leading Taiwanese competitors.
– 2025 will be pivotal as technology upgrades and cost strategies converge in the race to power AI-era data centers.
