Heron Power picks Morgan Hill for first factory, targeting 40 GW of annual solid-state transformer output

Heron Power, the Crusoe-backed solid-state transformer startup, announced on 13 August 2026 that it has chosen Morgan Hill, California - roughly 30 minutes south of San Jose - as the site of its first large-scale manufacturing facility^[1]. The factory is designed to produce up to 10,000 Heron Link units a year, representing 40 GW of annual power-conversion capacity^[1].

What Heron Link is and why it matters

Heron Link is a 5 MW medium-voltage power conversion system built on wide-bandgap semiconductors. The product collapses multiple pieces of grid equipment into one compact modular unit, powered by software-controlled semiconductors. Its modular architecture enables renewable energy, storage, and data center developers to connect directly to medium-voltage transmission without a conventional transformer.

The company frames the product as a response to a structural supply problem. More than 80% of critical grid components such as transformers and inverters are currently imported. Conventional transformer lead times have stretched to two years or more in some markets, a constraint that has become a direct bottleneck for data center interconnection timelines.

The factory and its backers

Heron Power will convert a former 286,000 sq ft distribution warehouse into an advanced manufacturing facility. The company plans to invest more than $100 million in the conversion. The facility is expected to create over 600 jobs. Site preparation is expected to begin immediately, with mass production slated to commence in late 2027.

The site selection followed a ten-month process. The City of Morgan Hill, PG&E, and state partners worked alongside Heron Power and its real estate advisor JLL, with the project supported in part by a $26.4 million California Competes tax credit administered by CA GO-Biz.

The factory announcement follows the close of Heron Power's Series B earlier this year. The $140 million round was led by Andreessen Horowitz's American Dynamism Fund and Breakthrough Energy Ventures. That brought total funding to date to $183 million.

Customer pipeline and the Crusoe connection

Heron Power's relationship with Crusoe predates the factory announcement. The two companies signed a Letter of Intent for Heron to supply power converter technology for the Stargate data center campus in Texas. Crusoe is among a small group of early customers the company has disclosed publicly; Heron Power has reported 50 GW of orders with more than a dozen prospective customers actively engaged in technical product collaborations.

The broader competitive field is filling in quickly. Rivals developing next-generation power-conversion equipment include:

• DG Matrix, which is deploying its solid-state transformer via partnerships with PowerSecure and Exowatt
• DG Matrix raised $60 million in a round led by Engine Ventures, including Mitsubishi Heavy Industries and ABB
• Hyperscale Power and a SolarEdge-Infineon joint venture are also developing modular power-conversion products

The key question now is execution. Mass production at the converted warehouse is not expected to begin until late 2027, meaning Heron Power still has to prove it can scale from prototype engineering to high-volume manufacturing on that timeline. Whether the Morgan Hill facility can reach its stated 40 GW annual run rate - and whether Heron's LOI pipeline converts into binding supply agreements - will determine whether the factory becomes a meaningful dent in the transformer shortage or another well-funded proof of concept.