Delays in native 800V power delivery deployment for AI data centers spark concerns; Morgan Stanley: Market reaction is overdone; OCP Summit may catalyze semiconductor stocks

Morgan Stanley said in its latest research report released on October 12 that the market had previously been overly optimistic about the deployment pace of 800-volt direct current (800VDC) power supply technology for artificial intelligence (AI) data centers, but recent concerns about delays in the rollout of the technology have also been exaggerated. The bank believes that although the time for NVIDIA Corporation (NVDA.US)'s next-generation AI server racks to fully adopt an 800V power supply architecture may be postponed to 2028, the overall direction of the technology transition has not changed. The Open Compute Project (OCP) Global Summit held on October 12-15 is expected to further clarify the development roadmap for 800V technology and become a positive catalyst for power management and analog semiconductor-related stocks. Morgan Stanley analyst Joseph Moore noted in the report that since the beginning of this year, the commercialization progress of 800V power supply technology has been a focus of the semiconductor industry. As power consumption of AI servers continues to rise, traditional power supply architectures are facing increasing challenges, and adopting higher-voltage DC power supply systems is seen as an important direction for improving data center power efficiency and meeting future high-power computing needs. However, the actual deployment pace of 800V technology may be slower than the market previously expected. According to Morgan Stanley's analysis, NVIDIA Corporation originally planned to introduce native 800V power supply through the Kyber rack architecture in the Rubin Ultra series scheduled for launch in the second half of 2027. However, Kyber is no longer the rack form currently planned for Rubin Ultra, and the related plans are being adjusted. NVIDIA Corporation's latest published technology roadmap shows that its third-generation server rack, with about 570 kilowatts of power, still uses 54V DC power distribution. Morgan Stanley believes this configuration is basically consistent with the previously expected Rubin Ultra rack specifications of about 600 kilowatts and 144 GPUs. This means that NVIDIA Corporation's first server rack clearly adopting a native 800V power supply architecture may not appear until the subsequent Feynman architecture generation, with power reaching about 1 megawatt, expected around 2028. However, Morgan Stanley emphasized that the delay in deploying native 800V racks does not mean the entire 800V power supply technology transition has stalled. The bank noted that 800V sidecar power supply modules have already begun shipping according to the original plan, and NVIDIA Corporation's Power Center centralized power supply system expected in 2027 is still advancing. At the same time, related technologies such as power conversion, power management, and voltage regulator modules (VRM) are still expected to continue developing as the power density of AI computing chips increases. For power semiconductors such as gallium nitride (GaN), the delay in deploying native 800V racks may postpone the release of some demand for high-frequency DC converters. But overall, the promotion of the 800V power supply architecture only reflects changes in the development pace of different segments, rather than a reversal in the technology direction. It is worth noting that Morgan Stanley believes market pessimism toward 800V-related semiconductor stocks may have already overreflected the impact of technology deployment delays. After NVIDIA Corporation's GTC conference in March this year announced a more detailed 800V technology roadmap, related semiconductor stocks were once sought after by investors. Data show that the forward 12-month enterprise value-to-sales (EV/Sales) valuation multiple for 800V-related companies rose about 50% after the conference and reached a peak in mid-June. However, as news emerged that 800V technology deployment might be delayed, valuations of related stocks fell significantly. At present, the sector's forward 12-month EV/Sales valuation multiple has dropped to about 6.5 times, basically returning to the level before this year's March GTC conference. At the same time, the valuation premium of the Philadelphia Semiconductor Index relative to 800V-related stocks has widened from about 12% previously to 25%, above the average level of about 17% since April 2025. Morgan Stanley pointed out that although valuations of related stocks have fallen significantly, corporate fundamental expectations have not deteriorated in tandem. Data show that since this year's March GTC conference, the expected year-over-year revenue growth rate for 800V-related companies over the next 12 months has increased from about 12% to 27%. And since the first reports of technology deployment delays, market revenue forecasts for the sector over the next 12 months have instead been revised up by about 11% cumulatively, with no company seeing its revenue forecast cut. The bank believes this indicates that adjustments to the timing of 800V technology deployment have not yet had a significant impact on the short-term fundamentals of related companies. The overall recovery of the analog semiconductor industry and continued strong demand from AI data centers are still supporting corporate growth prospects. The upcoming 2026 OCP Global Summit will be an important opportunity for the market to reassess the outlook for 800V technology. OCP is an open compute project jointly participated in by large cloud computing companies, equipment manufacturers, and component suppliers, dedicated to promoting the development of next-generation data center infrastructure technologies. Morgan Stanley pointed out that with the rapid growth in power supply demand for AI servers, the OCP Global Summit has significantly increased topics related to power and data center facilities in recent years. According to the bank's statistics, the total number of technical sessions at the 2026 OCP Summit reached 364, up from 267 in 2024, an increase of more than 30%. Among them, the number of sessions related to power and data center facilities nearly tripled compared with 2024, and their share of the total technical agenda has risen to about 16%. This year's summit will focus on issues such as 800V DC power supply, high-voltage DC power distribution, rack power supply architecture, energy storage, and system safety. Technology companies including NVIDIA Corporation, Alphabet Inc. Class C (GOOGL.US), Microsoft Corporation (MSFT.US), and Meta (META.US) will all participate in related technical discussions. Among them, NVIDIA Corporation plans to introduce progress in the 800V DC power supply architecture from technical standard coordination to actual deployment, while Alphabet Inc. Class C, Microsoft Corporation, and Meta will also participate in topics related to server power supply demand and technical standards. Morgan Stanley believes the market will focus on whether 800V sidecar power supply modules continue to advance as planned, the deployment arrangements for the 2027 Power Center system, and the specific launch timing of native 800V server racks. In addition, NVIDIA Corporation previously said that more than 80 equipment manufacturers and infrastructure companies have participated in building the 800V power supply technology ecosystem. Morgan Stanley believes the growing number of industry participants also shows that this technology transition is still advancing. In terms of investment opportunities, Morgan Stanley pointed out that if the OCP Summit further confirms that the long-term development direction of 800V power supply technology has not changed, related semiconductor stocks may see a positive market reaction. The bank specifically mentioned that companies such as Analog Devices, Inc. (ADI.US), Texas Instruments Incorporated (TXN.US), ON Semiconductor Corporation (ON.US), Wolfspeed (WOLF.US), and Navitas Semiconductor (NVTS.US) are all expected to benefit from growing demand for power management and power semiconductors in AI data centers. However, Morgan Stanley believes the greater impact of the 800V technology transition may be reflected in the utilization of mature-node semiconductor manufacturing capacity. The bank noted that, apart from the Chinese market and some of Texas Instruments Incorporated's capacity, utilization rates at mature-node wafer fabs globally are generally at relatively high levels. As demand for analog chips in AI data centers remains strong, if 800V power supply technology further expands demand for related chips, mature-node capacity supply may become tight in 2027. Morgan Stanley said it has already begun to expect possible supply shortages for some mature-node semiconductor products next year, and therefore maintains a positive view on the analog semiconductor sector as a whole.