2025-08-13 14:53Summary of Liquid Cooling Technology and Industry Developments Industry Overview - Liquid cooling technology is becoming the mainstream choice for data center cooling, improving energy efficiency and reducing PUE (Power Usage Effectiveness) values. Despite higher initial installation costs, long-term economic benefits are expected as penetration rates increase and applications scale up [1][5][4]. Key Insights - The blade-type liquid cooling system industry is experiencing rapid penetration growth, benefiting from the launch of GB300 and the introduction of related designs by North American manufacturers. This sector has significant long-term growth potential, with growth rates outpacing data center installation growth [1][6]. - Infinet, as a core supplier to NVIDIA, offers a comprehensive secondary product line and overall solutions, with strong profitability and good medium to long-term investment value. Revenue is expected to exceed $5 billion and net profit to increase by $800 million by 2026 [1][7]. - Domestic companies such as Shenling Environment, Highlan, and Kexin New Source have relatively comprehensive solution capabilities. Feilong Co. and Huagong New Material have competitive advantages in soldering, while Feilong also excels in electronic pumps and valves, indicating significant space for foreign substitution [1][8]. Market Dynamics - Recent developments include Feilong Co. receiving intention orders from Taiwanese companies, marking its entry into NVIDIA's supply chain. Jianghuai Co. has also received small batch orders from Delta and domestic clients, indicating its entry into the NVIDIA supply chain [1][10]. - The trend towards liquid cooling in data centers is driven by the increasing power requirements of cabinets, with liquid cooling becoming necessary for power levels exceeding 50-60 kW, and modular liquid cooling required for over 200 kW [2]. Economic Considerations - The economic comparison between liquid cooling and air cooling is debated. While liquid cooling hardware costs appear lower initially, total lifecycle costs, including installation and operational expenses, are crucial. Long-term, liquid cooling systems may demonstrate superior economics as penetration increases [5][6]. Competitive Landscape - Companies with strong investment potential in the blade-type liquid cooling system sector include Infinet, which is a core supplier to NVIDIA and has a comprehensive product line. This positioning provides a competitive edge in the future market landscape [7]. - Domestic companies like Shenling Environment, Highlan, and Kexin New Source are noted for their comprehensive solution capabilities in the liquid cooling field, with Feilong Co. and Huagong New Material having competitive advantages in specific segments [8][9]. Future Outlook - Feilong Co. is considered undervalued, with potential profits from approximately 100,000 cabinets expected to reach around $300 million. If it captures a 30% market share, revenues could reach $900 million [16][17]. - The liquid cooling market is projected to grow, with GB200 and GB300 liquid cooling cabinets valued at approximately $150,000 and $170,000, respectively. The market share for liquid cooling is currently around 4-5% [14][15]. Conclusion - Liquid cooling technology is positioned for significant growth, driven by increasing power demands in data centers and the need for higher energy efficiency. Companies like Infinet and Feilong Co. are well-placed to capitalize on these trends, making them attractive investment opportunities in the evolving landscape of data center cooling solutions [20].