Huajin Securities: AI development accelerates liquid cooling penetration rate, liquid cooling materials open up room for growth

The Zhitong Finance App learned that Huajin Securities released a research report saying that under the strong demand for computing power, power consumption issues such as data centers are becoming more and more prominent. Facing high power consumption and high density scenarios, traditional air cooling can no longer meet energy consumption and cooling requirements, and liquid cooling has become a necessary option for intelligent computing center temperature control solutions. China's liquid-cooled server market is expected to reach US$3.39 billion by 2025. Liquid cooling materials are also growing rapidly as demand in the liquid cooling market explodes. Oils, silicones, etc. are potential supplementary options for liquid cooling materials, and also benefit from the development of the liquid cooling industry.

The main views of Huajin Securities are as follows:

The development of AI has brought about power consumption issues, and liquid cooling solutions are gradually becoming clear

Driven by strong demand for computing power, the number of data centers and other servers has increased dramatically, causing power consumption issues to become more and more prominent. Liquid cooling has the characteristics of high heat dissipation efficiency, fast cooling, no vibration, low noise, etc. In the face of high-power high-density scenarios, traditional air cooling can no longer meet energy consumption and heat dissipation requirements. Liquid cooling has become an essential temperature control solution for intelligent computing centers. It is widely used in AI computing power, electronic terminals, the Internet, finance, energy transportation, industrial manufacturing, etc., and emerging industries such as data centers (servers), robots, and photovoltaic energy storage are rapidly emerging to expand new development opportunities for the liquid cooling market.

In 2024, China's liquid-cooled server market reached US$2.37 billion, up 67.0% year on year, and is expected to reach US$3.39 billion in 2025. It is estimated that in 2024-2029, the compound growth rate of China's liquid-cooled server market will reach 46.8%, and the market size will reach 16.2 billion US dollars in 2029. Liquid cooling materials are also growing rapidly as demand in the liquid cooling market explodes.

There are many options for liquid cooling materials. The prospects for fluorinated liquids are promising, and the withdrawal of 3M brings good opportunities for development

Cold plate liquid cooling currently mainly uses ethylene glycol, propylene glycol, and water. Immersion liquid cooling uses oil, silicon, fluorinated liquid, etc., which together form the material basis for the performance of the cooling medium. Fluoride has become an irreplaceable key component in immersion and cold plate liquid cooling systems due to its characteristics such as surface tension, insulation, and material compatibility. Demand has surged, especially in high power density scenarios for AI servers. Computing power and other fields have opened up market space for high-performance special fluorinated liquids for server liquid cooling. High-performance fluorinated liquids are becoming a new type of cooling medium, and 3M's withdrawal provides a good opportunity for domestic companies to develop. Oils, silicones, etc. are potential supplementary options for liquid cooling materials, and also benefit from the development of the liquid cooling industry.

Investment advice

It is recommended to focus on Dongyangguang (600673.SH), Xinzhoubang (300037.SZ), Runhe Materials (300727.SZ), Juhua Co., Ltd. (600160.SH), Yonghe Co., Ltd. (605020.SH), Wuhua Technology, Jinshi Resources (), Dongyue Group (00189), Yongtai Technology (002326.SZ), Huayi Group (Dubai), Sanmei Co., Ltd. (Chengdu), unified shares (system), 800 million time and space 603505.SH 600623.SH 603379.SH 600506.SH (688181.SH), Changcable Technology (002879.SZ), Xinan Co., Ltd. (600596.SH), Jitai (002909.SZ), etc.

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