Crusoe-backed US transformer developer Heron Power has selected Morgan Hill, California, as the home of its first large-scale factory, as it seeks to meet growing demand from the data center sector.

Heron will convert the former 286,000 sq ft (26,570 sqm) distribution warehouse, just south of San Jose, into a manufacturing facility to produce its 5MW Heron Link medium-voltage power conversion system, targeted for data center and large-scale energy projects.

When operational, the factory is expected to manufacture up to 10,000 Heron Links every year, representing 40GW on an annual basis. Site preparation at the facility is expected to begin immediately, with mass production slated to commence in late 2027.

"America's grid has to grow faster than it has in decades. We're seeing new demand from AI and EVs, and at the same time new supply from solar and storage," said Drew Baglino, CEO and founder of Heron Power. "The equipment running the grid hasn't changed in fifty years. Heron Factory One in Morgan Hill is how we fix that. We're manufacturing the leapfrog technology our grid needs, at scale, in America first."

The selection of its first manufacturing facility follows the close of its Series B funding round earlier this year, which saw the company raise $140 million and brought its total funding to date to $183m. It closed its Series A funding round last May.

According to the company, Heron Link is a modular megawatt power converter built on the latest advances in wide-bandgap semiconductors. In addition, the company claims that the product is designed for high power density and ease of maintenance, offering greater reliability and lower costs for renewable energy storage and data center developers.

The company has already partnered with data center firms to deploy its solution. Last June, the firm signed a Letter of Intent (LOI) with Crusoe to supply power converter technology for the Stargate data center campus in Texas.

Heron Power was founded in 2024 by former Tesla senior executive Drew Baglino and is based in Scotts Valley, California.