The US government is studying restrictions on foreign-manufactured inverters, primarily targeting Chinese products, to prevent potential interference with American power supplies. The Federal Communications Commission (FCC) is drafting the proposal, which would apply to new models of foreign inverters and could be announced this year, according to five informed sources who disclosed the information to Reuters. Chinese solar inverter leader Sungrow's stock plummeted 13% in one day following the news, while Taiwan companies including Aska (6409), FSP (3015), Delta Electronics, and Allis Electric (1514) are viewed as potential beneficiaries of order transfers. The move reflects intensifying US-China competition in energy supply chains, with the EU Commission recently banning Chinese inverters in publicly-funded energy projects.
US Government Cites National Security in Inverter Restriction Proposal
According to Reuters reporting, five informed sources revealed that the Trump administration is currently studying measures to prohibit imports of foreign-manufactured inverters, mainly targeting Chinese-made products, to avoid Beijing potentially using these devices to interfere with US power supply. The FCC is leading the drafting of this restriction, which applies to new models of foreign inverters. Following the news, Chinese solar inverter companies Ginlong Technologies, Goodwe, and Hopewind Electric also declined alongside Sungrow. This development has impacted stock markets on both sides of the Taiwan Strait, with Taiwan's capital markets actively discussing Aska, FSP, Delta Electronics, and Allis Electric. The situation involves a complete reshuffling of the solar supply chain beyond simple stock price movements.
Defense Authorization Act Already Prohibits Chinese Solar Components
Pocket Securities stated this is not the first time the US has targeted Chinese inverter products. According to the Fiscal Year Defense Authorization Act, the US Department of Defense already explicitly prohibits procurement of solar photovoltaic components, modules, or inverters manufactured by foreign entities of concern, with Chinese companies falling under this category. Additionally, the EU Commission recently decided that all energy projects funded by public money are prohibited from using Chinese-manufactured inverters, a decision viewed as an important catalyst for the Trump administration to restart related measures.
Four Taiwan Companies Positioned for Order Transfers
Pocket Securities analyzed that this wave of order transfer speculation has attracted significant attention because several Taiwan manufacturers have different levels of positioning in the inverter field:
Aska (6409): The company's core business is uninterruptible power systems (UPS), with solar inverters currently accounting for approximately 35% of revenue, representing a relatively high proportion among Taiwan manufacturers. Aska previously suffered from Chinese price wars, causing its inverter business to fall into a slump, prompting the company to actively develop commercial products, raise average unit prices, and strengthen overseas market deployment. If US restrictions take effect, Aska is viewed by markets as one of the manufacturers likely to receive larger order transfers, with production capacity planned in Taiwan.
FSP (3015): The company sells its LightUp series solar inverters globally, focusing on off-grid solar inverters marketed as one of the most cost-effective solutions for self-generation. Products cover output power ranging from 2KW, 3KW, 5KW, 6KW, 8KW to 11KW, compatible with national power grids, independent generators, and battery modules, supporting Bluetooth interface and App power monitoring, allowing end users to build suitable energy storage systems according to their needs.
Delta Electronics: With annual revenue exceeding NT$500 billion, the inverter business accounts for a relatively low proportion of overall revenue, but the product line is comprehensive with wide-ranging applications, from residential rooftops, commercial building-integrated solar systems, industrial factory rooftops, to megawatt-level factory power generation applications, all with corresponding grid-connected solar inverter products. Markets expect Delta Electronics to benefit from this wave of order transfers.
Allis Electric (1514): The only heavy electrical equipment manufacturer in Taiwan with mass production capability for inverters. The company entered the communications power field in 1979 and began mass-producing solar inverters in 2011, establishing complete independent R&D capabilities. Products supply the domestic market and are exported to Vietnam and the Philippines, with early exports to Italy, accumulating certain overseas track records. Allis emphasized that if US customers require products to quickly convert from European to American standards, the company can independently complete design modifications and related certifications, with response speed being a key advantage.
Technical Capability Replaces Price Competition in US Market
Allis believes competition in the US market centers on technology rather than price. Pocket Securities explained this is because US states have different power system specifications, with the same inverter often requiring multiple versions to meet local grid requirements. With major US domestic manufacturers having withdrawn from this field, once Chinese supply is restricted, manufacturers with independent R&D and customization capabilities will become the most competitive group in the market. This logic explains why markets particularly value manufacturers like Aska and Allis that possess independent technical foundations, rather than simply competing on production scale.
FAQ
What restrictions is the US government studying on inverter imports?
The US government is studying restrictions on foreign-manufactured inverters, primarily targeting Chinese products. The Federal Communications Commission (FCC) is drafting a proposal that would apply to new models of foreign inverters, with potential announcement this year according to five informed sources who disclosed the information to Reuters.
Which Taiwan companies may benefit from the US inverter import restrictions?
Four Taiwan companies are positioned as potential beneficiaries: Aska (6409), which has solar inverters accounting for approximately 35% of revenue; FSP (3015), which sells LightUp series inverters globally; Delta Electronics, with annual revenue exceeding NT$500 billion and comprehensive inverter product lines; and Allis Electric (1514), the only Taiwan heavy electrical manufacturer with mass inverter production capability.
How did Chinese inverter stocks react to the news?
Chinese solar inverter leader Sungrow's stock plummeted 13% in one day following the news. Other Chinese companies in the same sector including Ginlong Technologies, Goodwe, and Hopewind Electric also declined simultaneously.
