Why investors are going gaga over solid-state transformers

The article discusses the growing interest and investment in solid-state transformers (SSTs), which represent a significant modernization of traditional electrical transformers that have remained largely unchanged since Thomas Edison’s era. Unlike conventional transformers made of copper and iron that passively transfer electricity and perform a single function, SSTs use advanced power electronics and semiconductor materials such as silicon carbide or gallium nitride. This allows them to actively manage and control electricity flow, convert between alternating current (AC) and direct current (DC), and handle multiple voltages and bidirectional power flow. These capabilities make SSTs more flexible, software-updatable, and immune to commodity price fluctuations affecting copper and steel. Startups like DG Matrix, Heron Power, and Amperesand have recently raised substantial funding rounds to scale production of SST technologies, targeting data centers initially due to their need for compact, efficient, and controllable power systems. However, the broader opportunity lies in upgrading the aging electrical grid, where over half of distribution transformers in