United States: FCC Ban Hits A-Share Inverter Sector, Global Expansion Becomes Key to Corporate Success

On July 28 local time, the U.S. Federal Communications Commission (FCC) officially updated the Covered List, bringing “advanced robotics equipment” and foreign-made connected power inverters under regulatory control, with the new rules taking effect immediately. Following the implementation of this trade restriction, which had been in the works for nearly a month, the inverter sector on the A-share market came under pressure. Sungrow’s shares fell as much as 10% intraday, sparking widespread discussion in the capital markets about the outlook for Chinese new energy equipment exports.

The “new-old separation” approach leaves room for maneuver, while long-term risks remain unresolved.

The core provision of the ban that has drawn the most market attention is the implementation strategy of the "new-old divide"—the ban only restricts entirely new model products that have not yet obtained U.S. market equipment authorization and have not been listed for sale; existing models that have already obtained FCC certification and are currently circulating in the U.S. market are temporarily not subject to direct prohibition.

However, this does not mean that existing products can rest easy. The FCC explicitly reserved the right in its announcement to revoke the sales authorization of models on sale at any time, and long-term uncertainty persists. An executive of a listed inverter company frankly admitted that the clause stating "authorization for existing products can be revoked at any time" cannot be ignored, and the company is forming a dedicated team to continuously track policy developments.

The scope of regulation specifically covers two major tracks. The first is advanced robotic equipment, covering intelligent equipment with autonomous mobility capabilities, equipped with sensors and network modules, such as humanoid robots and quadruped robots. The FCC pointed out that such equipment can continuously collect surrounding environmental data, with potential risks including data being used to monitor U.S. citizens, enhancing foreign intelligence capabilities, and in extreme cases, even being remotely controlled.

The second is networked power inverters. As indispensable key equipment for the new energy industry, energy storage systems, and AI data centers, inverters undertake the core function of converting direct current from photovoltaics and energy storage batteries into alternating current compatible with the power grid. The U.S. side's regulatory rationale focuses on the security of grid infrastructure: inverters generally possess remote networked debugging capabilities, and related vulnerabilities carry the risk of being maliciously exploited, including remotely shutting down equipment, stealing power operation data, and launching cyberattacks to disrupt grid stability.

U.S. government officials publicly stated that the long-term goal of issuing this ban is to ensure the autonomy and controllability of the U.S. artificial intelligence and clean energy supply chains, and to promote the return of key manufacturing industries such as robotics and power inverters to the domestic market.

In fact, this ban had already sent a clear signal. As early as June 30, Reuters reported that the Trump administration was drafting a restriction plan for imported inverters, and the market continued to wait for the policy to be finalized. After nearly a month of negotiation, the regulatory document was officially implemented, and the scope of coverage largely aligned with the market's prior expectations.

Chinese companies dominate the global inverter landscape, and the supply gap in the U.S. market remains difficult to fill.

As the "heart" of photovoltaic and energy storage systems, inverters are essential hardware for the global energy transition. According to comprehensive statistics from energy consulting firms GEP and Wood Mackenzie, the overall global market size for photovoltaic and energy storage inverters exceeded $21 billion in 2025, with total annual inverter shipments approaching 589 GW. Institutions predict that the global inverter market size is expected to remain around $23 billion in 2026.

From the perspective of the competitive landscape, the global inverter industry exhibits a distinct characteristic of "two superpowers, multiple strong players, with Chinese enterprises dominating." In 2025, the combined global market share of Chinese inverter manufacturers approached 80%; among the top ten global inverter shipments, Chinese enterprises occupied six positions. Sungrow and Huawei form the first-tier duopoly, with the two companies collectively accounting for approximately 50% of the global inverter market.

The second tier consists of A-share listed companies: GoodWe, Ginlong Technologies, Deye, Hoymiles, and other manufacturers have deployed differentiated strategies in the residential photovoltaic-storage and distributed sectors, with each company's global share maintained in the range of 3% to 7%. Overseas competitors mainly include Germany's SMA, the United States' Enphase, and Israel's SolarEdge.

Notable data indicates that the global market share of US domestic inverter brands is only about 10%, and approximately 90% of US utility-scale inverters rely on imported supply, with local production capacity unable to fill the significant gap in the short term. In terms of regional demand structure, the North American market accounts for approximately 12% to 15% of global inverter demand, with the United States being the core of the region; from January to May 2025, the total value of Chinese inverter exports to the United States was $3.34 billion, accounting for less than 3% of China's total inverter export value.

At the segment level, photovoltaic inverters remain the foundation, while energy storage inverters are growing at a significantly faster pace. In 2025, global new installations of energy storage inverters reached 127 GW, with projections to increase to 165 GW in 2026. Energy storage inverters are widely used in large-scale energy storage stations, residential storage systems, and backup power for AI data centers, and are also a key category targeted by the current FCC ban.

The secondary market immediately came under pressure, with risk-averse sentiment among investors intensifying.

News of the new FCC regulations triggered immediate risk-averse selling in the A-share inverter sector. On the day of trading, Sungrow, the sector leader, saw its stock price plunge as much as 10.14% intraday, making it the top decliner in the sector. GoodWe and Chint Power Systems also experienced notable pullbacks, while other supply chain players such as Ginlong Technologies, Deye, and Ailuo Energy saw their shares weaken in tandem, leading to a significant cooling of sentiment in the photovoltaic, energy storage, and power electronics sectors.

The market’s trading logic is clear: in the short term, sales of existing certified products are temporarily unaffected, but the ban directly blocks the pathway for new inverter models to obtain FCC certification, effectively locking in the space for R&D, iteration, and commercial expansion of next-generation products aimed at the U.S. market. A greater medium- to long-term concern stems from the FCC’s retained clause allowing it to revoke existing model authorizations, fueling investor fears that further policy tightening may follow.

Industry analysts point out that the core of market divergence lies in the significant variation in the proportion of U.S. business across different companies. Sungrow’s revenue from the U.S. market accounts for 15% to 20% of its total revenue, and North American energy storage inverters are a high-margin business segment for the company, which explains why its stock was hit the hardest. In contrast, some manufacturers have a relatively low share of revenue from the U.S. market, resulting in milder stock price corrections.

In response to market panic, Sungrow previously noted that its inverter products exported to the U.S. do not possess remote upgrade or remote communication capabilities, and their hardware design complies with relevant local U.S. standards. Earlier this year, the U.S. Department of Energy conducted a special inspection of Chinese-made inverters, and the results showed no evidence that the equipment had been deliberately embedded with malicious wireless communication functions. This objective testing conclusion stands in stark contrast to the U.S. side’s decision to issue the ban on the grounds of “cybersecurity risks.”

Multiple institutions have also warned that this ban carries a strong demonstration effect, raising market concerns that Europe and the U.S. may successively introduce similar equipment access restrictions, which could suppress the overall overseas expansion valuations of domestic inverter companies.

As the earnings reporting season approaches, overseas operations have become the decisive factor for companies.

Behind the volatility in the secondary market, the inverter industry is entering a concentrated verification window for its Q1 and first-half 2026 performance, with the capability to deploy in overseas markets emerging as the core variable determining corporate earnings elasticity.

Sungrow, the industry leader, reported Q1 2026 revenue of 15.561 billion yuan and net profit attributable to the parent company of 2.291 billion yuan. Affected by policy expectations in overseas markets and industry price competition, net profit declined year-on-year in the first quarter, but the company’s business foundation remains solid. In 2025, the company’s overseas revenue accounted for over 60% of total revenue, with products sold in more than 100 countries worldwide. In terms of global deployment, Sungrow has established seven R&D centers and four overseas manufacturing bases, with an overseas inverter production capacity of 50 GW. It is also planning production capacity in Mexico and Thailand. The energy storage business has grown into the company’s largest revenue segment, and energy storage inverters for AI data centers have become a new growth curve.

GoodWe’s Q1 2026 performance saw a significant recovery, with revenue reaching 2.361 billion yuan, a year-on-year increase of 25.42%, and net profit attributable to the parent company of 101 million yuan, turning a loss into a profit. The company’s overseas revenue accounts for approximately 25% of total revenue, and its business volume in the United States is limited, resulting in a smaller direct performance impact compared to industry leaders. The company continues to deepen its presence in the residential energy storage markets of Europe, Australia, and Latin America, reducing its dependence on the North American market through market diversification.

Ginlong Technologies forecasts a net profit of 410 million to 460 million yuan for the first half of 2026, a year-on-year decrease of 23.61% to 31.91%. The earnings pressure mainly stems from industry price competition and foreign exchange fluctuations. Deye’s first-half 2026 performance was strong, with a pre-announced net profit increase of over 75% year-on-year, driven by the continued volume growth of its residential energy storage products in non-North American overseas markets.

Overall, the inverter industry exhibited a clear divergence in the first half of 2026. Companies with global channel networks and product portfolios covering diverse categories such as energy storage and residential solar-storage solutions demonstrated stronger earnings resilience. In contrast, manufacturers whose businesses are highly dependent on a single overseas region and have a narrow product mix are more vulnerable to geopolitical policy shocks.

The industry is proactively responding, and its global expansion is entering the deep end.

Executives at multiple listed inverter companies noted that the industry has largely reached a consensus that the short-term impact is limited, while long-term risks warrant vigilance. Based on the current provisions, the core of the ban is the suspension of FCC certification for new inverter models. Existing products that have already obtained certification can continue to be sold in the United States, meaning that current orders and the sale of existing products will not face direct short-term disruptions. However, given the volatility of U.S. market policies, subsequent developments may trigger a chain of demonstrative effects.

In terms of corporate response strategies, three pathways have emerged as the mainstream choices in the industry. First, product differentiation and customization. Companies are adjusting hardware architectures to meet North American regulatory requirements, removing remote networking modules as needed, and distinguishing between "networked inverters" and models without communication functions to align as closely as possible with existing regulatory rules. Second, accelerating regional diversification. Firms are intensifying their expansion efforts in Europe, Southeast Asia, the Middle East, and Latin America to reduce reliance on the North American market. Customs data indicate that the value of China's inverter exports to the United States accounts for less than 3% of total exports, and the vast global market provides a buffer for corporate transformation. Third, planning localized overseas production capacity. Several leading enterprises are assessing the feasibility of establishing factories in Southeast Asia and Mexico to circumvent trade barriers through overseas production bases.

From an industrial reality perspective, Chinese inverters hold the majority share of the global market, while domestic U.S. inverter production capacity is limited and unlikely to fill the import gap in the short term. U.S. distributed photovoltaic and energy storage projects may face pressure from a reduced selection of equipment and rising construction costs.

China has clearly stated its opposition to the broadening of national security concerns.

In response to the new regulatory measures issued by the U.S. Federal Communications Commission (FCC), the Chinese Embassy in Washington issued an immediate response. The embassy stated that it firmly opposes the excessive interpretation of national security concepts and the use of such concepts as a pretext to unjustly suppress Chinese enterprises. It urged the United States to create a fair, just, and non-discriminatory business environment for Chinese business entities.

Many industry observers have raised questions: if the primary concern is purely network security, the optimal path should be to establish public, unified, and implementable equipment security standards, encouraging global manufacturers to adhere to a unified set of specifications. In contrast, directly blocking market access and setting entry barriers based on country of origin constitutes a typical act of trade protectionism. This approach not only disrupts the stability of global industrial and supply chains but also undermines the vital interests of domestic U.S. new energy developers, robotics buyers, and end consumers.

The global new energy industry is highly globalized, with the photovoltaic and energy storage supply chains spanning multiple countries and regions. Power inverters, as core hardware for the clean energy transition, continue to see expanding market demand. Humanoid robots are regarded as the most important hardware carrier for the next generation of artificial intelligence and represent a focal point in global technological competition. The successive introduction of restrictive policies by the U.S. will exacerbate the fragmentation of global industrial chains and delay the progress of global energy transition and the collaborative innovation of artificial intelligence technologies.

Supply chain restructuring accelerates, long-term trend remains unchanged

The recent ban clearly indicates that the focus of U.S. industrial policy has shifted to two high-growth sectors: clean energy equipment and general-purpose intelligent robots. This regulatory model exhibits strong continuity. Looking back, U.S. controls on communication equipment and drones have consistently followed a pattern of "prohibiting market access for new models while retaining the authority to audit existing installations." This approach gradually tightens entry barriers to prevent a sudden, concentrated market shock, while continuously transmitting pressure throughout the supply chain.

In the short term, the ban will slow down the pace at which Chinese manufacturers of new-generation inverters and humanoid robots expand into the U.S. market. Sentiment in related sectors of the capital market may continue to fluctuate. Based on performance in the first half of 2026, leading enterprises with balanced earnings structures and diversified overseas market presence demonstrate stronger resilience against risks.

From a medium- to long-term perspective, the Chinese inverter industry possesses a solid foundation to withstand external shocks, supported by a global market share of nearly 80%, a complete industrial chain ecosystem, continuous technological R&D capabilities, and a vast domestic market base. Barriers in overseas markets will also drive the industry to accelerate technological independence and product upgrades, tap into the potential of the domestic solar and energy storage market, and explore emerging overseas markets.

Industry experts caution that inverter companies need to establish a normalized mechanism for tracking overseas policies, distinguishing between short-term sentiment shocks and long-term fundamental changes, and rationally formulating strategies for R&D, new product planning, and overseas expansion. Meanwhile, industry associations and enterprises should continue to strengthen international dialogue, promote the establishment of objective, transparent, and technology-standard-based global equipment safety rules, and oppose the politicization of economic and technological issues.

Trade protectionist barriers cannot halt the overall trend of technological progress and industrial development. Global energy transition and the industrialization of artificial intelligence are certain long-term trends, and market demand objectively exists. Only by adhering to open cooperation and competing based on unified, fair technical standards can countries jointly drive the sustained development of the new energy and robotics industries. Unilateral restrictive measures will ultimately only lead to increased supply chain costs and delayed industrial innovation, failing to achieve the goal of unilateral "decoupling and chain-breaking."