Hong Kong has the plug: its grid builds to demand, and the chip needs a licence
Hong Kong’s only AI megasite, Sandy Ridge, was put out to tender to the whole industry. It drew a single bid.
The plug was not the problem. Hong Kong’s main utility, CLP Power, is bound by its deal with the government to meet demand for electricity, and last year it had about a quarter more capacity than its busiest hour. It has finished more substations for data centres since 2024 than in the six years before.
In Hong Kong the grid is building for its data centres, not holding them back. What Hong Kong cannot supply is the chip. Washington has treated it as China since 2020, so the address of the hall helps decide whether the best AI chips may go in at all.
Explain it like I don't work in finance
A landlord must by law wire every flat that gets let. His fuse box carries a quarter more than the building's busiest hour. Lighting the flats is easy.
Filling them is not. The best fridges come from one maker abroad, whose government approves them one by one. It judges the street address and the tenant's family. Counting sockets says nothing about what is inside.
Hong Kong’s two power companies work under a Scheme of Control, an agreement with the government. It obliges them to supply enough electricity to meet demand at the lowest reasonable cost. In return they earn a regulated return on what they build. Building for new demand is the job, not a favour.
So CLP builds substations, the yards where high voltage power is stepped down, as data centres ask for them. It plans 18 for data centres by 2028, and by June it had finished eight. Its sales to data centres are growing faster this year than last, yet on my arithmetic they still average under 300 megawatts, a small load on its system.
At Sandy Ridge, the utility is the one party promising to be early. CLP, which is building its power supply, says the site is targeted to start operating in phases from mid-2027. The winning bidder, a mainland group, expects to deliver its park within 2028, and the government has told legislators 2029.
The chips are another matter. Under American export rules, advanced AI chips need a licence to go into a Hong Kong hall, and the best ones are presumed refused. Since January, a defined class of chip up to Nvidia’s H200, shipped straight from America to a user in Hong Kong, is judged case by case. The same chip for a Chinese company’s hall abroad is still presumed refused.
Neither CLP nor Hong Kong’s government decides that. The power is there and growing. What runs on it is settled in Washington, chip by chip.
For investors
A utility obliged to build cannot ration the plug
Hong Kong’s grid has a legal duty to meet demand, so it cannot ration connections the way some neighbours do. CLP Power’s offering circular of 1 April 2026 states the deal plainly: under the Scheme of Control, CLP and its generating partner CAPCO “are obliged to meet electricity demand at the lowest reasonable cost”. In return they may earn “a reasonable return on their investments”, under an agreement that runs to 31 December 2033.
The government told the Legislative Council the same on 1 April 2026. The power companies must supply electricity “to meet the demand, including the demand from the I&T sector”, innovation and technology. That is the opposite of Johor and Singapore, where the connection is the scarce thing.
Each substation finished for a data centre is a plug the grid has built, so those substations are the measure to watch. CLP supplies Kowloon, the New Territories and most outlying islands, about 6.4 million people, and it is the utility the data centres have gone to.
The system has a quarter to spare, and data centres use little of it
CLP had 9,258 megawatts of capacity for Hong Kong customers at the end of 2025, and its highest local demand that year was 7,455. That is about 24% more capacity than the peak, so about a fifth of the system stood idle in the busiest hour. It met all demand in 2025.
Data centres are a small load on a system with a quarter to spare
CLP Power, Hong Kong, megawatts
Data centres are growing within that headroom, not straining it. CLP’s sales to them rose 6.7% in the first half of 2025, and 12.8% in the first nine months of 2026, when they were 6.6% of its sales. On my arithmetic that is an average draw of about 283 megawatts, under 4% of the 2025 peak.
The substations are arriving faster than ever
CLP is building data centre connections at a pace it has never managed before. Its 2018 to 2023 plan delivered three data centre substations, on the count in CLP’s 2025 annual results. The 2024 to 2028 plan had six energised by the end of 2025 and eight by June 2026, the latest two adding 260 MVA, and CLP targets one more in the second half of 2026.
CLP has finished eight data centre substations since 2024, and plans 18 by 2028
Data centre substations completed in CLP Power's 2024 to 2028 plan, cumulative
The plan is for 18 by 2028, which CLP described as an “additional 12 data centres substations” on top of the first six. Reaching it needs about four or five a year from here, against about three a year so far. That is the first half of the test below.
At Sandy Ridge, the utility gives the earliest date
The strongest sign that the plug is not Hong Kong’s gate is that the utility’s target for Sandy Ridge comes before anyone else’s. On 12 October 2026, CLP said its power infrastructure for the site is “progressing at pace in close collaboration with the project developer”, with operations targeted “in phases from mid-2027”.
The utility gives Sandy Ridge the earliest date of anyone
Dates given for Sandy Ridge, from the award on 2 March 2026
Every other party gives a later date. The tender allowed operations within 42 months of the award on 2 March 2026. The government told the Legislative Council on 22 April 2026 to expect operations in 2029. The tenant’s own interim report expects the park delivered within 2028.
No filing I read gives a megawatt figure for Sandy Ridge, so the dates are the only measure. On them, the utility’s comes first.
The plot drew one bid, and the winner sells racks, not chips
The award shows how thin the field was. The Innovation, Technology and Industry Bureau awarded the Sandy Ridge Data Facility Cluster, a site of over 110,000 square metres in North District, on a 50-year land grant. “One tender was received in this exercise.”
The ultimate holding company named in the award is Range Intelligent Computing Technology Group, the foreign name of a Shenzhen-listed company. Its interim report of 28 August 2026 sets its strategy as AI computing at home and the “IDC rack business” abroad, Hong Kong included. Letting racks means Range sells space, power and cooling, and its customers bring the chips.
Its filings name no Hong Kong customer and say nothing about which chips will run there. Its top three customers, unnamed, were 93.7% of its 2025 revenue. The government counts Hong Kong’s total computing power today at 5,000 petaflops and expects Sandy Ridge to reach 36 times that by 2032. Neither figure states its precision, so read the ratio as scale, not a count of chips.
The chip licence follows the hall’s address
Hong Kong’s real gate sits in Washington, and it turns on where the hall is. Since 23 December 2020 the US Bureau of Industry and Security has treated Hong Kong “the same as China” under its export rules. Hong Kong keeps its own customs and export control system, but gets no easier American treatment.
The rule of 15 January 2026 changed the review policy for one class of chip, “the Nvidia H200 and its equivalents, as well as less advanced chips”. Exported from America to an end user located in China, Hong Kong included, these are now reviewed case by case. Every other route, and every better chip, stays under a presumption of denial.
For H200-class chips, a Hong Kong address is the one door left ajar
US licence review policy for advanced AI chips, by route, since 15 January 2026
Read together, the rules invert Johor’s picture for this one class. An H200-class shipment to a Chinese-headquartered tenant’s hall in Hong Kong gets case-by-case review; the same shipment to that tenant’s hall in Johor is presumed refused. For anything better, Hong Kong is presumed refused for every tenant. That reading of the rule text is mine.
The conditions are heavy, and what has shipped is small. The exporter must certify that US supply is sufficient and that exports to China and Macau stay within 50% of what was shipped for use in America. Nvidia said on 26 August 2026 that its Hopper data centre shipments to China were less than 1% of its data centre revenue, and its outlook assumes none.
SemiAnalysis sorts the world into power-gated places, such as America, and chip-gated ones, such as China. In law Hong Kong sits in the second box, but on a grid obliged to build, so the chip is the only gate it has.
What could make the plug bind after all
The case against is that headroom on paper may not reach the site. CLP’s reserve margin is for its whole system, not for the Northern Metropolis grid where Sandy Ridge sits. No primary source gives Sandy Ridge’s demand in megawatts, so a large first phase could test the local network in a way the system figure would hide.
The substation target is not safe either. CLP must lift its pace from about three a year to four or five to reach 18 by the end of 2028, and the 18 is its own “up to” figure, so demand that never arrives would miss it too. Hong Kong Electric, the island’s other utility, does not mention data centres in its 2025 annual or 2026 interim results.
These are limits, not counter-evidence. No record I read shows a Hong Kong data centre waiting for the grid, and the utility’s date for Sandy Ridge is the earliest on offer.
So the single bid at Sandy Ridge was not a verdict on the plug. The landlord has wired the flats and carries a quarter more than the busiest hour. Which fridges go in is decided abroad, by the street address as much as by the tenant.
The door is ajar for a chip of 2024, and the halls open from 2027
The licence rule quietly fixes one thing in place: the chip. The class Washington reviews case by case is set by performance and memory bandwidth limits, pegged at Nvidia’s H200, a chip of 2024. Nvidia has launched a new flagship about every year since: Blackwell in 2024, Blackwell Ultra in 2025 and Rubin in 2026. Sandy Ridge opens in phases from mid-2027 on CLP’s date, and in 2029 on the government’s.
Hong Kong's chip ceiling stands still while Nvidia launches a flagship a year
Nvidia's flagship AI chip by year of launch, the class the US reviews case by case for Hong Kong, and each party's date for Sandy Ridge
So the one door left ajar points at a chip that ages while the halls are built. When Sandy Ridge’s first phase runs, the best chip it may hope for will sit at least three flagships behind. On the figures in Memory, not maths, Rubin has four times the H200’s memory bandwidth. Its peak maths is about 17 and a half times higher, though that sets Rubin’s 4-bit sums against the H200’s 8-bit, the smallest format each supports.
That moves the cost onto the tenant, not the landlord. Range sells racks, space, power and cooling, and its customers bring the chips. A tenant capped at the H200 class needs more chips, and so more racks, for the same work than one on the frontier. The rack seller’s business survives the cap; the tenant’s bill for each unit of work is what grows.
Johor sharpens the contrast. In Johor, a tenant headquartered in China is presumed refused even the H200 class. In Hong Kong an exporter may seek a licence for that tenant, but only up to a ceiling that falls further behind each year. Three things would move the ceiling: any change to 15 CFR 742.6, any H200-class licence naming a Hong Kong user, and Range’s filings on which chips Sandy Ridge will run. Short of that, the halls can open on time and still receive a chip three years old, and the gap widens with every launch.
What would prove me wrong
The substation test is marked every six months, in CLP’s interim and annual results. It is not safe: about nine remain for 2027 and 2028 if CLP meets its target for 2026, roughly four or five a year against about three a year so far.
The Sandy Ridge test is the date. CLP says phases from mid-2027, the tenant says delivery within 2028, and the government told LegCo 2029. If the first phase is not energised by the end of 2027, the claim breaks, whether the delay sits in the grid or the building.
CLP’s reserve margin is context, not a test: a margin below 15% in its Ten-year Summary would warn that the plug was tightening. The export licence is mechanism, not forecast, so it is not in the falsifier. Nor would slow filling break the claim, since Range’s own delivery date is 2028.
Research notes
One initiation note rests on this claim: CLP Holdings. The contrast with Johor and Singapore, where the connection is the scarce thing, is the subject of that deep piece. Whether any of this is already in share prices is a question for these notes, not for the journal.
The claims on record, word for word
The test this piece stands behind, quoted word for word from the claims page:
Hong Kong has the plug, and the chip needs a licence (30 October 2026)
Claim: “Hong Kong’s grid is building to its data centres, not holding them back: CLP will have completed the 18 data centre substations in its 2024 to 2028 Development Plan by 31 December 2028, and Sandy Ridge’s first phase will be energised by 31 December 2027.”
Breaks if: “CLP’s interim or annual results show fewer than 18 data centre substations completed in its 2024 to 2028 Development Plan by 31 December 2028, or Sandy Ridge’s first phase is not energised by 31 December 2027.”
This piece absorbs no earlier piece, so it carries no older claims.
The figures behind the charts
CLP’s system and its data centre connections:
| Measure | Figure | Source |
|---|---|---|
| Capacity available to Hong Kong customers | 9,258 MW: CAPCO’s plants, 70% of Daya Bay nuclear station’s output, 600 MW of Guangzhou pumped storage | CLP Power offering circular, 1 April 2026; CLP Ten-year Summary |
| Local maximum demand, 2025 | 7,455 MW (7,532 MW without demand response) | CLP Ten-year Summary, 2025 |
| Local reserve margin, 2025 | About 24% more capacity than peak demand; about 19% of capacity was idle at the peak | Offering circular; my arithmetic from the Ten-year Summary |
| Demand met in 2025 | All of it; 36,989 GWh supplied to the system, down 1.13% | same |
| Data centre substations | Three in the 2018 to 2023 plan; six energised in 2024 and 2025 (three in 2025); eight finished in the 2024 to 2028 plan by June 2026, the latest two adding 260 MVA; one more due in the second half of 2026 | CLP annual results, 26 February 2026; interim results, 6 August 2026 |
| Planned by 2028 | 18 in all: six energised in 2024 and 2025, and “additional 12 data centres substations” | CLP results presentation, 26 February 2026 |
CLP’s 2023 annual results (26 February 2024) said “just four” in the previous five-year period; its 2025 annual results count three in 2018 to 2023, the plan period the piece describes, so the piece uses three.
The substation chart places the three finished in 2024 at the end of that year, six at the end of 2025 and eight at June 2026; the plan line runs to nine at the end of 2026 and 18 at the end of 2028.
| Period | CLP sales to data centres, change on a year earlier | Share of CLP sales | CLP total sales | Source |
|---|---|---|---|---|
| First half 2025 | +6.7% | not given | 16,453 GWh | Interim results, 4 August 2025 |
| Nine months 2025 | +6.7% | not given | 27,456 GWh | Quarterly statement, 20 October 2025 |
| Full year 2025 | +7.5% | not given | 35,760 GWh | Annual results, 26 February 2026 |
| First quarter 2026 | +11.1% | not given | 7,319 GWh | Quarterly statement, 18 May 2026 |
| First half 2026 | +11.8% | 7.1% | 17,038 GWh | Interim results, 6 August 2026 |
| Nine months 2026 | +12.8% | 6.6% | 28,131 GWh | Quarterly statement, 12 October 2026 |
My arithmetic, not CLP’s: 6.6% of 28,131 GWh is about 1,860 GWh over the 6,552 hours of the nine months. That is an average draw of about 283 MW, or 281 to 286 MW allowing for rounding.
Sandy Ridge’s terms:
| Term | Figure | Source |
|---|---|---|
| Premium | HK$581 million | ITIB release, 2 March 2026 |
| Floor area | 250,000 sq m, about 88% high-tier data centre | same |
| Investment | HK$23.8 billion cumulative, to the third year of operation | same |
| Computing power | 180,000 petaflops by 2032, “36 times the current computing power in Hong Kong” | same; 2026 Policy Address, 16 September 2026 |
| Who decides how it is used | “the operator according to its business plan and market demand” | LegCo reply, 22 April 2026 |
The 5,000 petaflops base, 3,000 of them at Cyberport’s AI Supercomputing Centre, is from the Secretary for Innovation, Technology and Industry (16 January 2026). The Sandy Ridge timeline places “within 2028” and “2029” at mid-year; the tender’s 42 months from 2 March 2026 ends in early September 2029.
Range Intelligent Computing Technology Group is the foreign name the Shenzhen-listed company 300442 gives itself in its interim report of 28 August 2026, which defines the Hong Kong park as its Sandy Ridge intelligent computing centre project, held through two Hong Kong subsidiaries.
| What the filing says | Source |
|---|---|
| Strategy: AI computing services at home, the “IDC rack business” abroad, Hong Kong included | Interim report, 28 August 2026 |
| Hong Kong and Batam, Indonesia, together plan about 600 MW in the short to medium term; no Hong Kong-only figure | Annual report, 10 April 2026; interim report |
| The Hong Kong park is expected to be delivered within 2028; construction in progress there was RMB 17.1 million at 30 June 2026 | Interim report |
| Its top three customers, unnamed, were 93.7% of 2025 revenue | Annual report, 10 April 2026 |
At home, Range describes liquid cooling adapted to domestic Chinese chips; that is about its mainland parks.
The US licence by chip and route:
| Chip | Route | US review policy | Source |
|---|---|---|---|
| H200 class or below | Exported from the US to an end user located in China, Hong Kong included | Case by case, if the exporter certifies its conditions | 15 CFR 742.6(b)(10)(iii)(A)(1), 15 January 2026 |
| H200 class or below | Re-exported from abroad, or transferred within China | Presumption of denial | same |
| H200 class or below | To a company headquartered in China but located outside it, such as a hall in Johor | Presumption of denial | same |
| Above those limits | To or within China, Hong Kong included, for any tenant | Presumption of denial | same |
The class is defined by performance and memory bandwidth limits; the rule does not name Hong Kong, which is inside China under 85 FR 83765. Beyond the supply and 50% conditions, the consignee must screen remote users, and every shipment is tested by an independent laboratory in the US first.
Who is exposed if Hong Kong has the plug and the chip needs a licence
This maps who operates in each layer. It is not a recommendation, and naming a company is not a view on its shares. Figures in the piece are disclosures used as evidence for the mechanism.
- The utilities
- CLP Power and Hong Kong Electric generate and deliver Hong Kong's electricity under the Scheme of Control.
- The site operator
- Range Intelligent Computing builds and runs data centres.
- What could fill the halls
- Nvidia and AMD make the AI chips named in the US rule.
- On the other side
- Anyone reading Hong Kong's spare power as AI computing to come, and halls whose tenants rest on a licence decided in Washington.
Sources: CLP Power Hong Kong's offering circular (1 April 2026) and CLP's Ten-year Summary of Scheme of Control statistics (2025); CLP Holdings' interim and annual results and quarterly statements (26 February 2024, 4 August 2025, 20 October 2025, 26 February 2026, 18 May 2026, 6 August 2026, 12 October 2026) and results presentation (26 February 2026); Hong Kong Electric's results (17 March and 11 August 2026); the Innovation, Technology and Industry Bureau (2 March 2026), the Secretary for Innovation, Technology and Industry (16 January 2026), Legislative Council replies (1 and 22 April 2026) and the 2026 Policy Address (16 September 2026); Range Intelligent Computing Technology Group's annual, interim and third quarter reports (10 April, 28 August and 23 October 2026); the US Bureau of Industry and Security's rules of 23 December 2020 and 15 January 2026 and 15 CFR 742.6; Nvidia's CFO commentary and results release (26 August 2026). The power-gated and chip-gated framing is SemiAnalysis's, from its free articles of 13 March 2024 and 30 December 2025. Personal research, not investment advice.