Core Insights - Major companies are competing to release new models and marketing activities, leading to a tight supply of computing power, which is expected to persist for a considerable time [2] Group 1: Liquid Cooling Market - The global liquid cooling market is projected to grow 5-10 times compared to last year, with many companies expected to receive substantial orders [4] - Vertiv reported strong order growth, with organic growth of approximately 252% year-over-year and 117% quarter-over-quarter, estimating order size between $8.2 billion and $8.4 billion [6] - The backlog of orders reached $15 billion, showing a year-over-year increase of about 109% and a quarter-over-quarter increase of 57% [6] Group 2: UBS Upgrade on Invec - UBS raised the target price for Invec by 60% to 160 yuan, driven by a significant upward revision of the global liquid cooling market size and an expected CAGR of 51% from 2025 to 2030 [10] - Invec's market share is anticipated to increase faster than previously expected, with a projected market share of 10% by 2027 [10] - UBS believes Invec's core competitive advantage lies in its full value chain liquid cooling capabilities, which enhance heat dissipation efficiency [11] Group 3: Valuation Insights - UBS argues that Invec's current valuation is unreasonable and significantly underestimates its growth potential, with a projected revenue and EPS CAGR of 69% and 167% from 2025 to 2027 [12] - The valuation adjustment reflects confidence in the company's short-term market share increase and the potential for margin improvement from overseas business [12] Group 4: ByteDance's Liquid Cooling - ByteDance has increased its global capital expenditure to 300 billion, indicating a significant commitment to liquid cooling technology [13]

Core Viewpoint - The liquid cooling industry is expected to experience rapid demand growth starting in 2026, while supply will lag behind, creating a highly favorable market environment for early movers in the sector [17]. Demand Side - As the power consumption of AI computing cards and cabinets increases, traditional air cooling solutions become inadequate, necessitating the adoption of liquid cooling solutions for effective heat dissipation. Specifically, cabinets with power consumption exceeding 35-40KW cannot utilize air cooling [4]. - North America faces severe electricity shortages, and liquid cooling can significantly reduce Power Usage Effectiveness (PUE), thereby saving energy costs and alleviating delays in data center projects caused by power shortages. Liquid cooling solutions can achieve a PUE of less than 1.2 [4]. - Many data centers in North America are located near economic centers or residential areas, and liquid cooling can significantly reduce noise levels compared to air cooling, accelerating project implementation and reducing financial costs [6]. Supply Side - The supply landscape for liquid cooling in North America is currently dominated by American and Taiwanese manufacturers, with limited participation from mainland Chinese firms. The primary technology used is cold plate liquid cooling, which accounts for over 98% of the market [11]. - The verification process for liquid cooling products is lengthy and complex, creating high barriers to entry for new suppliers. This process can take anywhere from six months to two years, making it challenging for many manufacturers to enter the market [11]. Company-Specific Insights - NVIDIA is projected to ship 100,000 cabinets of the GB series (primarily GB300) by 2026, with a liquid cooling value per cabinet estimated at $90,000 to $100,000, leading to a total liquid cooling value of approximately $10 billion [7]. - Google is expected to ship 2.2 to 2.3 million TPU V7 and above chips by 2026, translating to a need for around 35,000 cabinets with liquid cooling solutions, with a total liquid cooling value estimated at $2.6 billion [9]. - Meta anticipates shipping 1 million MTIA V2 chips, requiring about 14,000 cabinets, with a projected liquid cooling value of approximately $1.05 billion [10]. - Amazon's AWS Trainium3 is expected to ship 1.2 million chips, corresponding to around 16,000 cabinets, with an estimated liquid cooling value of $1.25 billion [10]. Market Opportunities for Mainland Chinese Manufacturers - North American CSP technology companies are increasingly looking to mainland Chinese liquid cooling manufacturers to ensure supply chain security, as existing production capacities in North America and Taiwan may not meet the surging demand by 2026 [13]. - Mainland Chinese manufacturers can offer liquid cooling products at a lower cost compared to their foreign counterparts, potentially enhancing project profitability for data centers [13]. - Some leading mainland Chinese manufacturers possess competitive technological advantages in liquid cooling products, which can improve the efficiency of downstream data center products [13]. Future Outlook - The liquid cooling industry is expected to see a significant increase in demand starting in 2026, with early adopters benefiting from the first wave of industry growth. The process of engaging with overseas manufacturers, obtaining samples, and securing initial orders will be crucial for companies looking to capitalize on this trend [17].