Nvidia(US:NVDA)2025-09-18 13:09Summary of J.P. Morgan Research on Liquid Cooling Components Industry Overview - The report focuses on the liquid cooling components industry, highlighting the potential for growth driven by upgrades in thermal design power (TDP) [1][3][4]. Key Insights - Market Growth Potential: The total addressable market (TAM) for liquid cooling components is expected to grow significantly due to continuous spec upgrades, which will support demand for tier-one suppliers of various components such as heat spreaders, cold plates, inner manifolds, and quick disconnect fittings [1][4]. - Earnings Power Upside: Spec migrations are anticipated to drive earnings power upside for hardware component suppliers within a reasonable investment horizon [1][4]. - Stock Performance: Stock prices of liquid cooling suppliers are likely to outperform due to potential upward earnings revisions from new demand and spec upgrades [1][4]. Technical Developments - Vera Rubin Architecture: The latest Nvidia Vera Rubin architecture is seen as a leading indicator for the industry, with expectations that other ASIC designs will follow once form factors are confirmed [1][3]. - Micro-Channel Lid (MCL) Adoption: There is a contrarian view that MCL adoption in Rubin GPU is likely to exceed 50% by the second half of 2026, with a 90% chance for Rubin Ultra in 2027 if not adopted earlier [3][4]. - Vapor Chamber Lid (VC Lid): The report introduces the VC lid, a new heat spreader product designed to enhance heat dissipation through an internal construction that allows vapor to spread evenly [3][4]. Financial Implications - Cost and Performance: The base case scenario suggests that the Rubin GPU will adopt MCL due to better performance and lower cost increases, while the adoption of VC lids remains uncertain [4]. - Incremental Demand: The TAM for the liquid cooling industry is expected to increase significantly, benefiting supply chain players, especially tier-one companies. Heat spreader and lid manufacturers are projected to see strong growth driven by demand from additional Rubin CPX chips [4][5]. Detailed Financial Estimates - Cooling Design Comparisons: The report includes detailed tables comparing cooling designs for Grace Blackwell and Vera Rubin architectures, outlining average selling prices (ASP) and total costs for various configurations [5][6][8][9][10]. Conclusion - The liquid cooling components industry is poised for substantial growth driven by technological advancements and increasing demand from high-performance computing applications. The report emphasizes the importance of spec upgrades and the potential for significant earnings growth for leading suppliers in this space [1][4][5].