What changed in this filing

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Item 1. Business

2025-05-21 compared with 2024-05-29 · 80 added, 64 removed, 374 unchanged (28% of the section changed)

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At AMSC, we believe that our creativity can meet today’s challenges and help us progress to a better future.

That means using future-facing technologies to harmonize the world’s desire for decarbonization and clean energy with the need for more reliable, effective and efficient power delivery.

That means using future-facing technologies to harmonize the world’s desire for sustainable progress with the need for more reliable, effective and efficient power delivery.

Already, our transformative power solutions are moving the world forward.

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Right now, we are powering the evolution of a grid that is fit for the future:

a more reliable and resilient grid that can incorporate renewable energy sources and our pioneering products, software and control solutions are creating more cost-effective ways for renewables to deliver a cleaner, less carbon-intensive tomorrow.

a more reliable and resilient grid built to support and incorporate a broad mix of energy sources.

Our pioneering products, software and control solutions are creating more cost-effective and efficient ways to deliver power across a mix of energy sources to ensure a reliable grid that meets the rising demand of power and supports critical infrastructure.

This exciting energy future also depends on computer chips, batteries and fuel cells that are built from silicon, lithium and carbon.

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What's more, in an age of increasing global tensions, we are helping to move U.S.

Navy ships into the future by installing protection systems that help them stay hidden from our enemies.

We help protect and expand the capability of the U.S.

Navy surface fleet with advanced superconductor-based systems that provide superior performance advantages to the traditional methods of mine field protection.

We see the nascent business serving the Navy as an extension of what we do with our Grid business – this ship is a microcosm of the grid.

Navy and Royal Canadian Navy ships into the future by installing protection systems that help them stay hidden from our enemies.

We help protect and expand the capability of the Navies' surface fleet with advanced superconductor-based systems that provide superior performance advantages to the traditional methods of mine field protection.

We see the nascent business serving the Navies as an extension of what we do with our Grid business – this ship is a microcosm of the grid.

Our products help manage power with a purpose.

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Concerns about these factors have led to increased spending by corporations and the military, as well as supportive government regulations and initiatives on local, state and national levels, including renewable portfolio standards, tax incentives, and international treaties.

We estimate that the total annual addressable global market for our products and solutions is nearly $9 billion.

We estimate that the total annual addressable global market for our products and solutions is over $9 billion as of the fiscal year ended March 31, 2025.

Our Company’s addressable market is driven by (i) the nearly $500 billion investment in renewables to update the aging grid for better support in the adoption of intermittent renewable power sources, (ii) the nearly $100 billion investment in the mining and processing of materials as well as the $160 billion investment in semiconductor capacity—both of which are driven by the electrification of transportation, the need to prioritize energy security and bolster domestic supply chains—and (iii) the over $30 billion investment by the U.S.

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military ship systems and capabilities to help ensure performance and security amid geopolitical uncertainty.

On August 1, 2024, we entered into a Stock Purchase Agreement with the selling stockholders named therein.

Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, we acquired all of the issued and outstanding shares of Megatran Industries, Inc.

Megatran is now a wholly-owned subsidiary of the Company.

Megatran's, wholly-owned subsidiary, NWL, Inc., ("NWL") is a U.S.-based global producer of engineered power conversion solutions for demanding industrial and military applications.

Megatran, together with NWL and its other wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business segment.

We refer to this transaction as the "acquisition of NWL".

Market opportunities

We provide solutions that address four key drivers of our business:

the global demand for renewable energy;

the global demand for materials for the electrification of transportation, in particular for electric vehicles;

the global demand for renewable and traditional energy;

the global demand for critical materials for the electrification of transportation and industrial modernization;

the global demand for semiconductors, driven by the electrification of everything;

the electrification of the Naval fleet to enhance capability.

the electrification of Naval fleets to enhance capability.

This all requires an electric grid that is fit for the future.

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We provide field service and spare parts to our global installed base of over 18 Gigawatts ("GW").

The Global Demand for Materials and Electric Vehicles:

The Global Demand for Critical Materials for the Electrification of Transportation and Industrial Modernization:

We provide transformation, rectification, voltage management and harmonic filtering systems at the substation level that manage input power from the grid and control power for the operation of large-scale industrial equipment such as furnaces, chemical plants, or semiconductor fabrication plants.

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We sell advanced degaussing systems to the U.S.

Navy and the Royal Canadian Navy.

Degaussing systems reduce a naval ship's magnetic signature, making it much more difficult for a mine to detect and damage a ship.

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Recently, our product development efforts have included our Resilient Electric Grid ("REG") system for the transmission electricity grid, SPS for the U.S.

Navy, and D-VAR Volt Var Optimization (“VVO”) for the distribution electricity grid.

Navy and the Royal Canadian Navy, and D-VAR Volt Var Optimization (“VVO”) for the distribution electricity grid.

Provide resiliency and protection capabilities.

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As part of our strategy, we serve our key target markets with local sales and field service personnel, which enables us to understand market dynamics and more effectively anticipate customer needs while also reducing response time.

We currently serve target markets such as Australia, Canada, Chile, India, Japan, Jordan, Mexico, Singapore, South Africa, South Korea, the United Kingdom, and the United States.

We currently serve target markets such as Australia, Canada, Chile, France, India, Japan, Mexico, New Zealand, Singapore, South Africa, South Korea, Taiwan, the United Kingdom, and the United States.

Grid market overview

It is widely believed that the electricity grids around the world require modernization through widespread technology upgrades if they are to maintain reliability while solving rapidly evolving challenges such as more frequent severe weather, threats of physical- and cyber-attacks, expanded renewable generation (both large and small scale) and new types of customer loads such as electric vehicles.

In fact, a series of reports written by the Electric Power Research Institute ("EPRI") in 2016 emphasize the need for increased resiliency, flexibility and connectivity in electric grids.

According to the EPRI reports, the number of geophysical, meteorological, hydrological, and climatological events in the U.S.

rose to an all-time high of 247 events in 2010 – up from approximately 200 in 2009 and less than 200 in all years combined from 1980 to 2010.

Modernizing the global electric grid is widely recognized as essential to maintaining reliability and meeting emerging challenges.

These include the increasing frequency of severe weather events, physical and cybersecurity threats, the rapid expansion of renewable energy—both utility-scale and distributed—and the rise of new customer load types.

As electric distribution networks become more complex with the integration of distributed energy resources, automation, and bidirectional power flows, there is a critical need for more accurate, dynamic, and resilient grid systems.

Additionally, the rapid growth of data centers, projected to more than double global electricity demand by 2026, presents additional grid planning challenges.

Available data further indicate that the existing U.S.

electrical grid has been stressed by U.S.

wind power generation increasing from 6 GW in 2003 to approxima tely 149 GW in 2023, and photovoltaics ("PV") power generation increasing from almost zero in 2003 to approxi mately 103 GW as of the end of 2023.

Growth in both wind power and PV is expected to continue with the vast majority of such intermittent generation sources unsupported by energy storage, placing stress on the power grid.

Finally, the Edison Electric Institute estimates that the number of electric vehicles on the road in the U.S.

is projected to reach 18.7 million in 2030, up from more than 1.0 million at the end of 2018.

These facts and the dependence on the safety, security and economy of the electricity grid have prompted broad recognition worldwide of the need to modernize and enhance the reliability and security of power grids.

The Biden Administration’s energy plan could positively impact the demand for our new energy power systems solutions.

The energy plan intends to reform and extend the tax incentives that generate energy efficiency and clean energy jobs as well as to develop financing mechanisms that leverage private sector dollars to maximize investment in the clean energy revolution.

We plan to seek to collaborate with top tier wind turbine manufacturers to provide new wind farm connectivity to the U.S.

The Biden Administration also intends to spur the installation of millions of solar panels – including utility-scale, rooftop, and community solar systems.

Our systems are primarily focused on addressing renewable energy installations for project developers and wind turbine manufacturers.

Because solar power is dynamic and intermittently variable in nature, distribution grids will need to enhance their network’s capabilities to accommodate this new resource, while maintaining efficiency and power quality for their customers.

Our system offers electric utilities superior power quality, environmental benefits, and significant cost-savings over traditional solutions.

The Biden Administration's energy policy also focuses on the next generation of electric grid transmission and distribution, which has been the heart of our long-term growth strategy.

We believe our new energy power systems products are well suited to address this enormous challenge.

The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was enacted in August 2022, in part, to address the challenges of climate change.

The Inflation Reduction Act is expected to result in the investment of $369 billion in climate solutions and environmental justice.

The goal of the Inflation Reduction Act is to reduce emissions by 40 percent by 2030 while restoring U.S.

credibility to lead climate action on the global stage.

The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the “CHIPS Act of 2022”), also was enacted in August 2022 and is intended to enable the re-shoring of critical manufacturing capability to the U.S., which is expected to be beneficial to our business.

The CHIPS for America Fund, provides $52.7 billion of funding for the development of U.S.

manufacturing, research and development (R&D), and workforce development programs.

From this $52.7 billion, $39 billion is allocated to be spent on financial assistance to build, develop, or modernize domestic semiconductor facilities in order to bolster U.S.

leadership in the semiconductor industry.

We believe we are well positioned to seize the numerous opportunities presented by the Inflation Reduction Act and the CHIPS Act of 2022.

wind power generation increasing from 6 GW in 2003 to more than 156 GW in 2024, and photovoltaics ("PV") power generation increasing from almost zero in 2003 to approxi mately 223 GW as of the end of 2024.

electric grid is under increasing strain due to a combination of factors:

the aging infrastructure, with 70% of transmission lines over 25 years old, the surge in electricity demand driven by data centers, artificial intelligence, and the electrification of transportation, and the rising frequency of extreme weather events exacerbated by climate change.

These challenges are compounded by delays in connecting new renewable energy sources to the grid, threatening the stability and reliability of the nation's power supply.

These factors, along with the essential role the grid plays in economic resilience, public safety, and national security, have prompted widespread recognition of the urgent need to modernize and fortify the reliability, flexibility, and security of the electric grid.

The Trump administration’s energy policy—focused on boosting domestic energy production, revitalizing U.S.

manufacturing, and strengthening military readiness—presents potential opportunities for AMSC’s power systems and naval solutions.

The push for traditional power production is fueling industrial growth, which in turn increases demand for a high-performing power grid.

This shift has major implications for power quality, capacity and reliability, especially as an aging infrastructure is pushed to meet new demands from energy-intensive sectors like artificial intelligence, cloud computing, and semiconductor manufacturing.

In April 2025, the administration issued an executive order titled "Strengthening the Reliability and Security of the United States Electric Grid," invoking emergency authority to address increasing electricity demand and capacity constraints.

This directive empowers the Department of Energy ("DOE") to utilize all available power generation resources to ensure the reliable delivery of electricity, especially in response to the growth of technology-driven sectors.

Our Grid product solutions, including capacitor banks, harmonic filters, and STATCOMs, are well-positioned to support power quality in energy-intensive industries such as artificial intelligence, data centers, steel, automotive, chemicals, and semiconductors, among others.

At the same time, the administration's focus on revitalizing U.S.

manufacturing is expected to increase advanced manufacturing in the United States.

Our Grid products are designed to ensure uptime, maximize throughput, and enhance power quality in distribution networks affected by industrial loads.

We are well positioned to help power facilities in ways that scale without adding complexity or size and see this as a potentially favorable opportunity.

The administration’s focus on revitalizing the defense sector and maintaining a world-class Navy further amplifies demand for reliable power supplies in military applications and mission-critical solutions.

AMSC’s transformers and power supplies for motor drives are actively supporting the rigorous requirements of critical military infrastructure and equipping the U.S.

naval fleet with technologies that enhance performance and protection—enhancing operational readiness both domestically and globally.

We believe we are well positioned to seize the numerous opportunities presented by these policies.

Power grid operators worldwide face various challenges, including:

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mandated efficiency upgrades, mass adoption of rooftop solar, community solar, utility-owned micro-grids, variable load conditions on the distribution grid and voltage regulations alternatives.

Power Supplies and Military-Grade Magnetics Applications.

Our Power Supplies play a vital role in electrostatic precipitator systems ("ESP"), helping utility and industrial customers reduce airborne particulate emissions and meet environmental compliance standards.

In the defense sector, our Military Application Magnetics—such as transformers and inductors—are engineered for performance and durability across shipboard, land-based, and airborne electrical systems supporting U.S.

and allied operations.

We also provide high-capacity transformers designed for megawatt-scale industrial motor drives, ensuring reliable power for demanding industrial applications.

REG Systems .

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military moves to rebuild and retool for competition against other great powers.

In March 2023, the U.S.

In January 2025, the U.S.

Navy’s 2025 shipbuilding plan covering government fiscal years 2025 to 2054, calls for a larger and more distributed fleet.

To achieve that goal, the Navy would buy 290 to 340 ships over the 2024 to 2053 period:

237 to 267 combat ships and 53 to 73 combat logistics and support ships.

To achieve that goal, the Navy would buy 364 ships over the 2025–2054 period:

293 combat ships and 71 combat logistics and support ships.

For a description of risks related to our government contracts, see Part I, Item" 1A, “Risk Factors – Our contracts with the U.S.

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The continued funding of such contracts remains subject to annual congressional appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit."

As of November 6, 2023, the Navy included 291 battle force ships—aircraft carriers, submarines, surface combatants, amphibious ships, combat logistics ships, and some support ships.

As of January, 2025, the Navy included 364 battle force ships—aircraft carriers, submarines, surface combatants, amphibious ships, combat logistics ships, and some support ship.

Since WWII, the Navy fleet has protected its warfare vessels with copper-based degaussing systems.

Our HTS-based degaussing system provides world class mine protection while reducing the weight of the degaussing system by an estimated 50-80%, and reducing energy consumption.

We believe that our HTS systems are an enabling technology for the Navy in its mission to create an all-electric ship (Super Ship).

Our HTS-based SPS degaussing system has been designed into the San Antonio-class amphibious warfare ship platform, with the first system delivered in January 2022 to be deployed on the USS Fort Lauderdale.

We believe that our HTS systems are an enabling technology for the U.S.

Navy in its mission to create an all-electric ship (Super Ship).

Our HTS-based SPS degaussing system has been designed into the San Antonio-class amphibious warfare ship platform, with the first system delivered in January 2022 deployed on the USS Fort Lauderdale.

AMSC and the U.S.

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We provide advanced ship protection systems, power management, and power generation systems that are designed to help fleets increase system efficiencies, enhance warfare capabilities, and boost reliability, performance and security.

Our systems support the Navy’s mission to “electrify the fleet”.

Our systems support the U.S.

Navy’s mission to “electrify the fleet”.

Our systems allow for the ship to generate a large amount of electrical power and distribute the power through an onboard power system to a propulsion motor by way of a much smaller, lighter, and higher performing HTS cable system, enabling a more advanced, reliable, and secure solution with a smaller footprint.

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The core components of a degaussing system are transferable to other applications being targeted for ship implementation.

Our SPS has been designed into the San Antonio class of amphibious assault vessels, with the first system delivered in January 2022 to be deployed on the USS Fort Lauderdale.

We are also seeking opportunities to propagate SPS throughout the surface fleet, creating the potential for a relatively long-term revenue stream.

Our SPS has been designed into the San Antonio class of amphibious assault vessels, with the first system delivered in January 2022 deployed on the USS Fort Lauderdale.

We are also providing SPS systems to the Royal Canadian Navy and seeking opportunities to propagate SPS throughout other allied navies, creating the potential for a relatively long-term revenue stream.

Additionally, we are developing a deployable mine countermeasure solution to enhance U.S.

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Propulsion systems.

Our development work in power generation systems for the Navy extends to HTS-based electric power propulsion.

Our development work in power generation systems for the U.S.

Navy extends to HTS-based electric power propulsion.

Onboard power delivery systems and power generation systems, when applied to propulsion motors, enable the transition to high power dense electric propulsion systems.

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Wind market overview

The global energy mix is transitioning towards an increasing amount of renewable energy, including wind power.

The global energy mix has been transitioning towards an increasing amount of renewable energy, including wind power.

Wind power is unlimited in supply and its generation is a zero-emission process.

Wind power has become a major pillar of power supply throughout the world.

Wind power is expected to play a key role in the achievement of the objectives of the Paris Climate Change agreement and the Sustainable Development Goals.

According to GlobalData, a research firm, nearly 92 GW of wind generation capacity were added worldwide in calendar 2023, as compared to 78 GW in calendar 2022.

According to GlobalData, a research firm, approximately 118 GW of wind generation capacity were added worldwide in calendar 2024, as compared to nearly 117 GW in calendar 2023.

GlobalData anticipates that more than 136 GW of additional capacity will be added in 2025.

According to GlobalData, annual wind installations in India for calendar 2023 were 4.3 G W and for calendar 2024 are estimated to be above 4 G W.

According to GlobalData, annual wind installations in India for calendar 2024 were 3.4 GW and for calendar 2025 are estimated to be above 4 GW.

Several factors are expected to drive the future growth in the wind power market, including substantial government incentives and mandates that have been established globally, technological improvements, turbine cost reductions, the development of the offshore wind market, and increasing cost competitiveness with existing power generation technologies.

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We serve customers globally through a localized sales and field service presence in our core target markets.

We have served over 100 customers in the grid market since our inception, including Commonwealth Edison, Huntington Ingalls Shipbuilding, the U.S.

We have served over 100 customers in the grid market since our inception, including Commonwealth Edison, Huntington Ingalls Shipbuilding, Innomotics LLC, the U.S.

Navy, Capital Power Corp., Targa Resources Corp., Micron Technology Inc., SSE plc in the United Kingdom, Consolidated Power Projects (Pty) Ltd in South Africa, Fuji Bridex in Singapore, and Ergon Energy in Australia.

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In fiscal 2024, Inox accounted for 14% of our total revenues.

In fiscal 2022, Fuji Bridex Pte Ltd accounted for 15% of our total revenues.

In fiscal 2023, Inox accounted for 13% of our total revenues.

No other customer accounted for more than 10% of our total revenues in each of fiscal 2024 and 2023.

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Grid segment manufacturing, and research and development

Bordentown, New Jersey — Grid segment manufacturing

Klagenfurt, Austria —Wind segment engineering, research and development, and customer support

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Richland, Washington — Grid segment research and development

Roebling, New Jersey — Grid segment manufacturing

Silesian, Poland — Grid segment manufacturing

Westminster, Massachusetts — Grid segment manufacturing

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Generally, the Company believes that adequate alternative sources are available for the majority of its key raw material and purchased component needs, however, the Company is dependent on a single or limited number of suppliers for certain materials and components.

In addition, new or proposed tariff increases on our raw materials, in particular stainless steel, may increase prices for such raw materials and/or may create shortages as customers seek alternative suppliers.

Sales and Marketing

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The sales force also leverages business development staff for our various offerings as well as our team of wind turbine engineers and power grid transmission planners, all of whom help to ensure that we have an in-depth understanding of customer needs and provide cost-effective solutions for those needs.

We segment our operations into two market-facing business units:

We segment our operations into two market-facing business segments:

Grid and Wind.

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We face competition from other companies offering FACTS systems similar to our D-VAR products.

These include adaptive VAR compensators, Dynamic voltage restorers (“DVRs”), and STATCOMs produced by ABB, Hitachi, Siemens, Mitsubishi, and Ingeteam, and battery-based uninterruptable power supply (“UPS”) systems offered by various companies around the world.

These include adaptive VAR compensators, Dynamic voltage restorers (“DVRs”), and STATCOMs produced by ABB, Hitachi, Ingeteam, Mitsubishi, RXHK and Siemens, and battery-based uninterruptable power supply (“UPS”) systems offered by various companies around the world.

We face competition from other companies offering medium-voltage metal-enclosed power capacitor banks and harmonic filter banks for use on electric power systems similar to our NEPSI TM products.

These include Southern States, Controllix PowerSide, Elgin Power Solutions, Scott Engineering and QVARx.

These include Southern States, Controllix, Powerside, Elgin Power Solutions, Scott Manufacturing Solutions and QVARx.

We face competition from other companies offering DC power supply systems similar to our Neeltran TM products.

These include SCR Controlled Rectifiers, IGBT-controlled choppers produced by ABB, Siemens, Friem, Dynapower, and Nidec offering systems around the world.

We face competition from other companies offering transformers and power supplies similar to our NWL products.

These include industrial and military transformers produced by Espey Manufacturing & Electronics Corp .

, Hammond and Ocrev, and power supplies offered by Kraft Powercon, Andritz, Lonking Holdings, and Rico.

With our HTS-based REG product, we are offering a new approach that provides alternatives to utilities for power system design.

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Other companies that serve the wind turbine components industry include ABB and Hopewind.

We also face indirect competition in the wind energy market from global manufacturers of wind turbines, such as Siemens Gamesa, General Electric, Vestas and Suzlon.

We also face indirect competition in the wind energy market from global manufacturers of wind turbines, such as Siemens Gamesa, Vestas, Envision and Suzlon.

We face competition for the supply of wind turbine engineering design services from design engineering firms such as Aerovide and W2E.

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However, we may have to obtain additional licenses to HTS materials.

Our HTS wire patents will begin to expire in 2024, with the latest set to expire in 2039.

Our HTS wire patents began to expire in 2024, with the latest set to expire in 2041.

In addition to HTS wire patents, we have extensive patents and patents pending covering applications of HTS wire, such as HTS fault current limiting technology including our fault current limiting cable, HTS rotating machines and ship protection systems.

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We have patent coverage on the unique design features of our blade pitch control system, which ensures optimal aerodynamic flow conditions on the turbine blades and improves system efficiency and performance.

The pitch system includes a patented SafetyLOCK™ feature that causes the blades to rotate to a feathered position to prevent the rotor blades from spinning during a fault.

Our wind patents will begin to expire in 2025, with the latest set to expire in 2039.

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The health and safety of our employees is of utmost importance to us.

Recognizing and respecting our global presence, we strive to maintain a diverse and inclusive workforce everywhere we operate.

Recognizing and respecting our global presence, we strive to maintain an inclusive workforce, where anyone can reach their potential regardless of background, everywhere we operate.

As of March 31, 2025, we employed 569 persons.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business