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NewsStructural4 min readDisconfirmAI Editorial

Envision Energy's Vertical Integration: How China's AI Data Centers Can Build 120MW in One Year at One-Fifth the US Cost

The SemiAnalysis team conducted an on-site visit to Envision Group's Galaxy campus in Ulanqab, Inner Mongolia, identifying its full-chain integration from wind farms to solid-state transformers and prefabricated substations as a key differentiator from the US Abilene campus. The report argues that power access is becoming a core condition for data center development, while explicitly acknowledging whether this advantage can translate into sustained competitiveness remains to be seen.

2026-11-08 03:01 GMT+8

In September 2026, SemiAnalysis authors Everlyn Tan, Dylan Patel, and others traveled to Ulanqab, Inner Mongolia, to conduct an on-site visit of Envision Group's Galaxy data center campus. This campus, with a planned total capacity of 800MW, rivals the scale of the Stargate core campus in Abilene, Texas, USA—built by Crusoe for Oracle and OpenAI, featuring approximately 820MW of critical IT capacity. However, SemiAnalysis argues that what truly warrants attention is not the scale itself, but the depth of vertical integration demonstrated by Envision Energy: it simultaneously possesses wind farms, dedicated transmission lines, blade manufacturing plants, energy storage systems, low-voltage power modules, 800V solid-state transformer (SST) systems, and the design and integration capabilities for prefabricated substations. The authors explicitly state that it is too early to determine whether this integrated model constitutes a meaningful competitive advantage.

How does this integration translate into actual advantages? Phase I of Galaxy, with a capacity of 120MW, was delivered in less than one year at a cost approximately one-fifth that of the United States. Its power supply adopts the Source-Grid-Load-Storage (SGLS) model unique to China: the project builds its own wind and solar farms, pairs them with energy storage, constructs the data center, and connects via dedicated lines rather than the public grid. Envision selected two plots with strong wind resources, located about two hours' drive from the campus and roughly 80 kilometers apart—a distance that reduces the probability of simultaneous calm winds throughout the year. The combined installed capacity of the two wind farms is 420MW, approximately 1.75 times the data center's 240MW load. Excess power during windy periods is stored in four-hour batteries and released when winds are weak. Envision aims to cover more than 60% of the electricity consumption for the first two phases with its own wind power, but the article frames this as a target rather than an achieved result.

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Vertical integration is equally evident within the campus. Envision's affiliate, AESC, manufactures all core components of the energy storage systems, from battery cells to power conversion to software, completing full system commissioning before leaving the factory. Most suppliers only cover one segment—high voltage, low voltage, or generators—requiring 3 to 6 months of on-site commissioning to integrate parts. In a 5MW pilot hall, solid-state transformers directly convert 10kV AC from the grid to 800V DC to supply the racks, eliminating the low-voltage transformers, UPS, and rectifier stages. This architecture aligns with the direction Nvidia is pushing for next-generation high-density racks; however, while the US industry remains in the roadmap phase, approximately one-quarter of Chinese data centers built over the past decade already operate on DC power supply.

SemiAnalysis's core argument is that power access is becoming the central condition for data center development. In the United States, developers bridge power gaps using on-site gas turbines and fuel cells; in Southeast Asia, governments are beginning to require data centers to generate their own power; in China, approvals increasingly favor projects that synergize computing power with electricity. When energy access itself becomes part of the product, enterprises possessing full-chain capabilities gain cost and schedule control that traditional developers cannot easily replicate. Envision's prefabricated substation takes less than three months from factory module production to grid connection, compared to approximately six months for conventional indoor substations.

However, the authors explicitly mark the boundaries of this argument. The article notes that vertical integration has not yet directly won orders from hyperscale customers, where the primary criteria for selecting vendors remain resources and track records. The data center market in China is highly competitive; rents have halved over five years to approximately $40 per kilowatt per month (excluding electricity), capital expenditures have dropped by about 25% to under $3 million per megawatt, and electricity prices in Inner Mongolia are approximately $0.055 per kilowatt-hour. In such a market, integration signifies greater control over costs and schedules rather than automatic order conversion. The article suggests that this advantage may evolve from marginal improvement to structural barrier only as power access continues to tighten and the internal power supply architecture of data centers is redesigned.

Sources

  • newsletter.semianalysis.com↗
  • tomshardware.comTom's Hardware↗
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