Guosen Securities Co.,Ltd. released a research report stating that as AI chip power consumption increases and single-cabinet density rises, with overseas leaders gradually advancing comprehensive liquid cooling solutions, the global liquid cooling market is poised for rapid growth. Professional temperature control manufacturers with system-level understanding capabilities are expected to benefit more from industry development. Meanwhile, domestic manufacturers still have opportunities to penetrate overseas markets leveraging advantages such as cost-effectiveness. The firm suggests focusing on investment opportunities across the entire liquid cooling industry chain, with particular emphasis on Shenzhen Envicool Technology Co.,Ltd. (002837.SZ).
**AI Era Drives Data Center Heat Density Acceleration, Liquid Cooling Becomes Mainstream Technology for Intelligent Computing Centers**
In the AI era, computing chip power consumption continues to rise, with equipment power density reaching the limits of traditional air cooling methods. Compared to air cooling technology, liquid cooling offers advantages including faster temperature transfer, greater heat removal capacity, lower noise levels, energy efficiency, and space savings. Additionally, with PUE assessment standards tightening globally across all regions, liquid cooling penetration rates are expected to continue rising.
The universal liquid cooling architecture can be divided into facility-side components (including primary and secondary side equipment) and ICT equipment-side components (such as cold plate modules). Secondary side equipment includes manifolds, cooling distribution units (CDUs), piping, and dynamic environmental systems, while primary side equipment mainly comprises outdoor chiller units.
Currently, liquid cooling applications primarily utilize cold plate technology. For example, NVIDIA's latest commercial B-series GPUs and subsequent technologies all employ cold plate liquid cooling for heat dissipation, featuring 100% full liquid cooling architecture covering core components including CPUs, GPUs, and memory. Immersion cooling solutions represent the long-term development direction.
**Broad Market Potential for Data Center Liquid Cooling, Secondary Side Market Expected to Reach Tens of Billions by 2026**
The North American market currently values cold plate liquid cooling at approximately $1,040 per kW. By 2026, CSP cloud providers' self-developed ASIC chips adopting liquid cooling solutions could drive market scale to $3 billion. NVIDIA GPU demand remains robust, with optimistic projections suggesting NVIDIA's liquid cooling market could exceed $7 billion by 2026. Overall, the North American liquid cooling market is expected to reach $10 billion by 2026.
In the domestic market, cold plate liquid cooling is currently valued at approximately 5,000 yuan per kW. Domestic operators and internet companies building data centers are gradually adopting liquid cooling solutions. China's data center liquid cooling penetration rate is expected to enter an acceleration phase in 2025, with projected market scales of 11.3 billion yuan and 23.8 billion yuan for 2026 and 2027, respectively.
**Industry Landscape and Competitive Dynamics**
Traditional overseas cooling companies maintain certain early-mover advantages in the liquid cooling sector, but domestic manufacturers possess advantages in cost-effectiveness, rapid response times, customized services, and industrialization capabilities, positioning them to benefit from AI development.
The industry supply chain includes upstream liquid cooling components, midstream system solution providers/integrators, and downstream customers comprising AIDC service providers, operators, and internet companies.
**System Integrators**: Success depends on comprehensive capabilities, as system integration is complex with high design requirements and stringent equipment temperature control stability demands. Established temperature control manufacturers hold advantages, including overseas players like Vertiv and domestic companies like Shenzhen Envicool Technology Co.,Ltd.
**Component Manufacturers**: Manufacturing processes involve certain technical and customer barriers. For instance, Taiwanese thermal management manufacturers such as Auras, Tyan, and Delta Electronics gained first-mover advantages through early collaboration with NVIDIA on liquid cooling research. However, as CSP cloud providers develop self-designed ASIC chips with liquid cooling solutions while pursuing more cost-effective decoupled approaches, domestic suppliers are expected to encounter development opportunities.
**Risk Factors**: AI development and investment falling short of expectations, intensified industry competition, global geopolitical risks, and supply chain disruption due to new technology developments.
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