Core Insights - The liquid cooling server industry is experiencing significant growth, driven by increased demand for high-density servers and efficient cooling solutions [1][2] - Major companies are actively investing in liquid cooling technologies, with substantial market opportunities projected in the coming years [2][3] Industry Developments - Xiechuang Data plans to invest up to 9 billion yuan to purchase servers from multiple suppliers, indicating accelerated infrastructure development in cloud computing [1] - The 5th International AIDC Liquid Cooling Supply Chain Summit will be held on December 18-19, focusing on technology exchange and market trends [1] Market Projections - UBS forecasts that the global direct liquid cooling market for data centers will grow from $1.138 billion in 2024 to $31.191 billion by 2030, with a compound annual growth rate of 51% [2] - The AI server liquid cooling market is expected to reach $23.746 billion, while the non-AI server liquid cooling market will grow to $7.446 billion [2] Company Highlights - Yingweike (002837) holds over 35% market share in liquid cooling technology and is a designated temperature control supplier for major clients like Tencent and Alibaba [2] - Shenling Environment (301018) is a core supplier for Huawei's data centers, with 63 liquid cooling patents and a PUE as low as 1.15 [2] - Highlan (300499) uniquely supplies both server and energy storage solutions, with a client base including ByteDance and Alibaba [3] Key Component Suppliers - Juhua (600160) is a leading domestic supplier of electronic-grade fluorinated liquids, aiming for a 15% global market share by 2025 [4] - Feirongda (300602) specializes in integrated cooling solutions and is a core supplier for Huawei servers [5] - Zhongshi Technology (300684) provides unique nano-carbon material cooling plates, with over 90% of its business in liquid cooling modules [5] System Integration Leaders - Inspur (000977) is a leading global liquid cooling server provider, with a projected market share of over 45% in 2024 [6] - Zhongke Shuguang (603019) collaborates on liquid cooling server development, introducing a high-density cooling solution for complex computing scenarios [6] - Unisplendour (000938) has a significant market presence with over 35% share in the operator market and expects liquid cooling orders to exceed 5 billion yuan in 2024 [6] Other Relevant Companies - Guangxun Technology (002281) is the only domestic company to achieve mass production of liquid cooling optical modules, holding a 15% global market share [7] - Changfei Optical Fiber (601869) applies optical fiber technology to liquid cooling, enhancing data transmission efficiency [8] - Ruijie Network (301165) offers a full range of liquid cooling products and has launched a new immersion liquid cooling switch [8]

Core Viewpoint - The liquid cooling server sector in the A-share market has experienced a significant surge, driven by increasing computing power demands and supportive policies, with Lenovo Group emerging as a key player in this field [1][2]. Industry Overview - The explosive growth of the liquid cooling server sector is attributed to the exponential increase in computing power requirements, particularly due to the scaling of generative AI and large model training, which traditional air cooling systems cannot adequately support [1]. - The Chinese government's "dual carbon" goals and digital economy strategies are providing strong momentum for the development of liquid cooling technologies, with specific targets set for increased penetration rates by 2025 [2]. Company Positioning - Lenovo Group has established a comprehensive "full-stack" liquid cooling capability, covering core technology research, complete solution design, and lifecycle services, positioning itself as a leader in the liquid cooling market [2]. - Lenovo's Neptune liquid cooling system has become an industry benchmark, with over 80,000 units deployed globally across various critical sectors, demonstrating its technological maturity and compliance with international standards [2][3]. Competitive Advantages - Lenovo's liquid cooling solutions have been validated through numerous high-profile projects, showcasing their adaptability and efficiency, such as achieving a PUE of 1.1 in automotive data centers and reducing energy consumption by 30% in educational institutions [3]. - Strategic partnerships with leading chip manufacturers like NVIDIA and AMD enhance Lenovo's competitive edge, particularly with the introduction of advanced AI server solutions [3]. Financial Performance - Lenovo's liquid cooling business reported a 68% year-on-year revenue growth in Q1 2025, reflecting strong market demand and performance [4]. - The global server cooling market is projected to experience substantial growth, with estimates indicating a market size of $17.6 billion by 2027, driven by increased AI server shipments and rising liquid cooling penetration rates [4].

Summary of Global Server Cooling Market Conference Call Industry Overview - The conference call discusses the **Global Server Cooling** market, particularly focusing on the **AI server** segment and the adoption of **liquid cooling** technologies. Key Points and Arguments 1. **Market Forecasts**: - The **Global Server Cooling Total Addressable Market (TAM)** is projected to grow significantly, with estimates for 2025 and 2026 raised to **US$7.9 billion** and **US$14.0 billion**, respectively, reflecting a **9%** and **16%** increase from previous estimates [1][2][16]. - The TAM for AI training servers is expected to increase from **US$1.5 billion** to **US$12.4 billion** from 2024 to 2027, representing a **101% CAGR** [1]. 2. **Liquid Cooling Penetration**: - Liquid cooling penetration rates for AI training servers are forecasted to reach **15%** in 2024, escalating to **80%** by 2027. For AI inferencing servers, penetration is expected to rise from **1%** to **20%** over the same period [1][2][17]. - The ongoing increase in liquid cooling adoption is attributed to the rising computing power of GPUs and ASICs, denser server designs, and the need for improved power efficiency in data centers [1]. 3. **Growth Drivers**: - The growth in the cooling TAM is driven by the increasing volume of high-power AI servers that require advanced cooling solutions, particularly liquid cooling, which offers higher cooling efficiency compared to air cooling [1][2][16]. - Innovations in cooling technologies, such as double-sided cold plates and microfluidics solutions, are enhancing heat exchange efficiency and thermal performance, further supporting the growth of the liquid cooling market [22]. 4. **Market Dynamics**: - The report indicates a strong year-over-year growth forecast for the server cooling market, with **111%** growth expected in 2025 and **77%** in 2026 [8][23]. - The cooling solutions market is evolving with new designs and technologies to meet the increasing thermal demands of AI servers [22]. 5. **Competitive Landscape**: - Key players in the liquid cooling market include companies like **Wiwynn**, **Lenovo**, **Dell**, and **HP**, with varying ratings and market caps provided [28]. - The report highlights the importance of customization and rapid response capabilities for cooling suppliers to adapt to new technologies and market demands [22]. Additional Important Content - The report includes detailed tables summarizing the projected TAM for various server types, including AI training, general, and HPC servers, along with their respective liquid cooling penetration rates [2][8][23]. - It emphasizes the need for cooling suppliers to enhance their product offerings and capabilities to keep pace with technological advancements in the server industry [22]. This summary encapsulates the critical insights from the conference call regarding the Global Server Cooling market, focusing on growth forecasts, market dynamics, and competitive landscape.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **AIDC (Artificial Intelligence Data Center)** and **ESS (Energy Storage Systems)** supply chain in China, highlighting the impact of AI server demand and cloud capital expenditure on the industry. Core Insights and Arguments 1. **AI Server Demand Surge**: - Significant increase in global server market driven by AI training and inferencing servers, with shipments projected to rise by **21%** and **39%** for 2025E and 2026E respectively compared to previous estimates [4][4][4] - Envicool's strategic positioning with NVIDIA/Intel for liquid cooling components enhances its market capture potential [4][4][4] 2. **Cloud Capital Expenditure Growth**: - Alibaba plans to invest **Rmb380 billion** over three years, contributing to a robust domestic data center and cloud capex upcycle [4][4][4] - China's data center live capacity expected to reach **30GW** by 2025E, with internet, cloud, and AI accounting for approximately **70%** of demand [4][4][4] 3. **Domestic ESS Demand Recovery**: - Post-May 31, 2025, the domestic ESS demand has improved, with total tendered ESS capacity increasing by **38%** and **86%** year-over-year in August 2025 and the first eight months of 2025 respectively [5][5][5] - Battery exports also showed strong growth, with a **45%** year-over-year increase in August 2025 and **67%** in the first eight months of 2025, primarily driven by Europe and non-US regions [5][5][5] 4. **Target Price Revisions**: - Target prices for four AIDC/ESS supply chain stocks have been revised upward by **12-87%** based on the positive outlook for AI server shipments and cloud capex [6][6][6] 5. **Company-Specific Updates**: - **Kstar**: Revenue forecasts raised by **1% to 27%** for 2025E-30E, driven by cloud capex expansion and AI power demands, with a new target price of **Rmb46.2** [7][7][7] - **Envicool**: Net income forecasts increased by **9%** on average, with a new target price of **Rmb81.0**, reflecting strong demand for liquid cooling solutions [13][13][13] - **Kehua**: Target price raised by **12%** to **Rmb47.5**, reflecting strong domestic data center capacity expansion [17][17][17] - **Sungrow**: Target price set at **Rmb148.9**, with an **8%** upside potential, despite concerns over US market exposure [18][18][18] Additional Important Insights - The report emphasizes the critical need for advanced cooling solutions to manage the thermal loads of high-density AI servers [4][4][4] - The potential risks include uncertainties in ESS demand from the US market beyond 2026E due to regulatory changes [5][5][5] - The overall sentiment is bullish on the AIDC and ESS sectors, with expectations of sustained growth driven by technological advancements and increased capital expenditure in cloud infrastructure [4][4][4][5][5][5]

Core Insights - The demand for computing power is increasing due to the updates and applications of AI large models, leading to higher chip power consumption and computing density [1] - Liquid cooling technology is rapidly replacing air cooling as the mainstream solution due to its high cooling efficiency and deployment density [1] - The global AI liquid cooling market is expected to reach $8.6 billion by 2026 [1] Market Trends - Liquid cooling technologies include cold plate, immersion, and spray cooling, with cold plate cooling being the most mature solution due to minimal changes required to equipment and infrastructure while providing significant cooling effects [1] - The industry chain is actively positioning itself, indicating a broad market space [1] - According to IDC, the Chinese liquid cooling server market is projected to grow by 67% year-on-year in 2024 [1]

Core Insights - The company, Gaolan Co., Ltd. (stock code: 300499), has announced that its server liquid cooling products can maintain a Power Usage Effectiveness (PUE) value below 1.1 [1] Company Summary - Gaolan Co., Ltd. specializes in server liquid cooling products [1] - The ability to control PUE values under 1.1 indicates a strong focus on energy efficiency in their product offerings [1] Industry Summary - The development of energy-efficient cooling solutions is increasingly important in the data center industry, as companies seek to reduce operational costs and environmental impact [1] - Liquid cooling technology is gaining traction as a viable alternative to traditional cooling methods, aligning with industry trends towards sustainability [1]

Core Insights - The company is focusing on liquid cooling and robotics to enhance its capabilities in the server cooling and power supply sectors [1] - The company has become a core supplier for AMD and has signed an ODM agreement with Zhiyuan for robotics [1] - The company has established a production line for humanoid robot assembly and is continuously expanding its key components such as lead screws and dexterous hands [1]

Market Overview - The market showed mixed performance with the Shanghai Composite Index down by 0.68% while the ChiNext Index increased by 0.43%, indicating a divergence in market trends [1] - Over 3,400 stocks experienced declines, suggesting a concentrated movement of funds into specific sectors, as trading volume increased by over 50 billion compared to the previous day [1] AI Sector - The AI sector, particularly the liquid cooling technology, saw significant gains with companies like Yidian Tianxia hitting the daily limit up, driven by the increasing demand for computing power in AI model training [3] - Liquid cooling technology is becoming essential due to the limitations of traditional air cooling in handling high-density computing requirements, indicating a genuine industry need rather than speculative trading [3] Assisted Reproductive Technology - The assisted reproductive technology sector also experienced gains, with companies like Gongtong Pharmaceutical and Hancheng Group reaching their daily limit up, supported by recent policy changes that include assisted reproductive technology in health insurance [3] - The policy shift reduces the financial burden on individuals facing fertility issues, leading to an expected increase in demand for these services, which is viewed as a stable long-term growth opportunity [3] Traditional Sectors - Traditional sectors such as steel and coal showed weakness, with Chongqing Steel dropping over 5% and the coal sector declining across the board, reflecting a lack of significant changes in supply and demand dynamics [3] - The shift of funds towards more certain growth sectors indicates a market preference for industries with clear demand drivers and policy support [4] Investment Strategy - The current market environment emphasizes the importance of identifying sectors with real performance backing, such as AI liquid cooling and assisted reproductive technology, rather than focusing solely on index fluctuations [4] - Investors are encouraged to look for companies that can benefit from industry trends and policy incentives, highlighting a strategic approach to long-term investment [4]

Summary of Global Tech Conference Call Industry Overview - The report focuses on the **Global Server Cooling** market, particularly the adoption of **liquid cooling** technologies in AI servers and ASIC servers [1][21][28]. Key Points Market Growth and Projections - The **Total Addressable Market (TAM)** for liquid cooling in AI training servers is projected to grow to **US$3.8 billion** in 2025 and **US$7.9 billion** in 2026, representing a **171%** and **106%** year-over-year growth respectively [1][15]. - The overall **Global Server Cooling TAM** is revised to **US$7.2 billion** in 2025 and **US$12.0 billion** in 2026, reflecting a **98%** and **66%** year-over-year growth [21][29]. Liquid Cooling Adoption Rates - Liquid cooling penetration for AI training servers is expected to rise from **15%** in 2024 to **45%** in 2025 and **74%** in 2026 [1][22]. - Full rack AI training servers will have a **100%** liquid cooling penetration rate, while baseboard-based AI training servers will see penetration rates of **27%** in 2025 and **52%** in 2026 [4][22]. Segment Analysis - For **general/HPC/AI inferencing servers**, liquid cooling penetration is anticipated to increase from **1%** in 2024 to **4%** in 2025 and **6%** in 2026 [23]. - The report indicates a potential upside from **ASIC servers**, with liquid cooling adoption driven by advancements in ASIC chips and improved ROI [28]. Component Breakdown - The TAM for liquid cooling components is detailed as follows: - **Cold plates**: US$1.1 billion in 2025, growing to US$2.2 billion in 2026 - **Manifold**: US$897 million in 2025, increasing to US$1.6 billion in 2026 - **Rear Door Heat Exchanger (RDHx)**: US$214 million in 2025, rising to US$283 million in 2026 - **Sidecar**: US$1.3 billion in 2025, reaching US$2.4 billion in 2026 - **CDU/RPU**: US$779 million in 2025, escalating to US$2.2 billion in 2026 [13][29]. Competitive Landscape - Key suppliers in the liquid cooling market include: - **Hon Hai**: Buy rating, market cap of US$77.1 billion - **Quanta**: Neutral rating, market cap of US$35.6 billion - **Wiwynn**: Buy rating, market cap of US$15.9 billion - **Lenovo**: Buy rating, market cap of US$15.9 billion - **Dell**: Buy rating, market cap of US$85.3 billion [32]. Additional Insights - The report highlights the importance of **liquid cooling** in meeting the increasing power demands of AI servers, particularly as computing power continues to rise [1][10]. - The adoption of liquid cooling technologies is expected to be a significant driver for the growth of the server cooling market, with major tech companies like Amazon, Microsoft, and Google investing in these solutions [28]. This summary encapsulates the critical insights from the conference call regarding the trends, projections, and competitive landscape of the global server cooling market, particularly focusing on liquid cooling technologies.