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I'm purposely dropping AC from its normal levels (230VAC @50Hz) just to analyse the behaviour of a DC motor drive board that I have.

When the AC mains voltage falls below 180V, the 7 segment display of my board goes off. The circuit derives the 5V for the MCU and 12V for the display driver ULN2003 from a 12V step down transformer, a bridge rectifier and a 7805 regulator circuit. ULN's 12V supply is given from the input pin of 7805.

I'm curious about the display turning off problem when the AC voltage drops. As the display needs 12V only, can't it still find the power from the 180V AC? What would be the better power supply solution for such a noisy mains?

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What is the normal level for your mains AC voltage - what do you normally run it at? Why is the mains AC falling? – Andy aka Mar 10 '14 at 10:49
@Andyaka 230V,50Hz is the normal level. I purposely dropping AC just to analyse the circuit behaviour. – raforanz Mar 10 '14 at 11:04
Just pointing out that the "pro" solution for buffering against power supply changes is usually to plug a power conditioner between the wall voltage and the equipment. A simple UPS is sometimes sufficient. (Try running digital audio equipment in an old building whose mains voltage is sometimes a full 25% below nominal... Go on, try, I dare ya.) – keshlam Mar 10 '14 at 15:23

Your 12V linear regulator is most likely running out of headroom, due to the fact that you have a fixed turns-ratio step-down transformer as its input source (which is of course gets rectified and smoothed). As the AC voltage coming in drops, so must the AC voltage coming out of it. Once the voltage gets too low, your linear regulators don't stand a chance.

You can either replace the whole power supply with a switcher as the other answer suggested, or use a switcher to generate a regulated 15VDC bus to feed the regulators (instead of the transformer and rectifier scheme). If your loads are noise sensitive, keeping the linear regulators may give better performance (at the cost of lower efficiency).

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what would be the better power supply solution for [a nominal 230V mains supply that drops to 180V]?

A switched mode power supply can often operate at any voltage from 100V to 250V.

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