Shenwan Hongyuan Group Co., Ltd. released a research report stating that immersion liquid cooling involves submerging entire servers or components in non-conductive cooling fluid, suitable for ultra-high power density scenarios. Perfluoropolyether and hexafluoropropylene oligomers are expected to become mainstream choices for future immersion liquid cooling applications.
According to IEA forecasts, global data center total installed capacity is expected to reach 114.3GW in 2025. In an optimistic scenario, annual new data center installations from 2024-2030 would be 24GW, while in a pessimistic scenario it would be 9GW annually, with an average of 16.6GW per year. Based on a liquid cooling penetration rate of 60% and immersion cooling penetration rate of 40%, this could generate demand for an additional 40,000 tons of fluorinated liquid. At an estimated price of 250,000 yuan per ton, the market space is approximately 10 billion yuan.
**Liquid Cooling Technology is a Powerful Solution for Data Center Heat Dissipation Issues**
With the rapid development of high-density applications like AI and 5G, data center power density continues to increase, bringing challenges of high heat density and enormous energy consumption. AI servers have power consumption of 2,000-3,000W, significantly higher than regular servers at 300W-1,000W, making data center heat dissipation a major challenge. NVIDIA began using liquid cooling starting with the BlackWell architecture, with GB200 adopting single-phase cold plate plus air cooling solutions, and the DGX GB300 system introducing rack-level liquid cooling design, transitioning comprehensively to full liquid cooling design.
**Cold Plate Liquid Cooling is Currently the Mainstream Solution**
Cold plate liquid cooling is an early-developed liquid cooling technology that places metal cold plates directly against high-power consumption chips like CPUs and GPUs, with cooling liquid circulating through internal channels to absorb heat. Single-phase cold plate liquid cooling involves no phase change process, is suitable for medium-to-low power servers, and requires no major iterations to existing architectures, making it the current mainstream technical route. Its cooling medium is primarily water and ethylene glycol liquids, accounting for approximately 70% of the total liquid cooling market.
Two-phase cold plate liquid cooling uses low boiling point liquids such as R134a or fluorinated liquids, which undergo phase change (from liquid to gas) after absorbing heat in the cold plate, utilizing high latent heat of phase change to efficiently remove heat. This offers higher heat dissipation efficiency than single-phase cold plates and can handle higher power densities. NVIDIA's Rubin chip may adopt revolutionary two-phase cold plate technology.
**Immersion Liquid Cooling Has Higher Heat Dissipation Efficiency Than Mainstream Cold Plate Solutions**
Immersion liquid cooling submerges entire servers or components in non-conductive cooling liquid, removing heat through liquid convection and phase change (such as evaporative heat absorption). It is divided into single-phase immersion (no phase change) and two-phase immersion (with phase change), suitable for ultra-high power density scenarios. Compared to two-phase, single-phase advantages include lower deployment costs and cooling medium costs, with no risk of coolant overflow, making single-phase currently dominant in immersion liquid cooling. Two-phase advantages include higher heat dissipation capacity and limits, but currently lag behind single-phase in cost and technical maturity.
**Fluorinated Liquids May Be the Optimal Medium for Immersion Liquid Cooling**
Current cooling mediums for immersion liquid cooling include mineral oil, silicone oil, and fluorinated liquids. While mineral oil and silicone oil have lower costs, they have high viscosity at room temperature and flash points, creating combustion risks during use. They also have high insulation strength and dielectric constants that may affect signal transmission. Fluorinated liquids have excellent comprehensive heat transfer performance, achieving non-flammable properties with no flash point, excellent stability, and low dielectric constants, but the drawback is high cost.
Mainstream fluorinated liquids include hydrofluoroethers, perfluoropolyethers, hexafluoropropylene oligomers, and perfluoroamines. Hydrofluoroethers have relatively high dielectric constants, suitable for precision component cleaning. Perfluoropolyethers and hexafluoropropylene oligomers have excellent comprehensive performance, but perfluoropolyethers are expensive while hexafluoropropylene oligomers have lower costs but unresolved acidity and volatility issues. Perfluoroamines were previously selected as mature solutions, but after 3M's exit, their production requires electrolysis with extremely high power consumption and high process barriers.
Shenwan Hongyuan believes perfluoropolyethers and hexafluoropropylene oligomers are expected to become mainstream choices for future immersion liquid cooling applications. According to IEA forecasts, global data center total installed capacity is expected to reach 114.3GW in 2025. In optimistic scenarios, annual new data center installations from 2024-2030 would be 24GW, while pessimistic scenarios suggest 9GW annually, averaging 16.6GW per year. Based on liquid cooling penetration rate of 60% and immersion cooling penetration rate of 40%, this could generate demand for an additional 40,000 tons of fluorinated liquid. At an estimated price of 250,000 yuan per ton, the market space is approximately 10 billion yuan.
**Investment Targets**
Liquid cooling is an important tool for solving heat dissipation problems under AI industry development trends, with upstream cooling mediums facing favorable development opportunities. For fluorinated liquids, attention should be paid to Dongyang Guanghua (600673.SH), Juhua Group (600160.SH), Yonghe Group (605020.SH), Capchem (300037.SZ), 8-Billion Time & Space (688181.SH), Sanmei Chemical (603379.SH), Sinochem Holdings (600378.SH), and DONGYUE GROUP (00189). For silicone oils, attention should be paid to Runhe Materials (300727.SZ), Jiangsu Xinhua Chemical (600596.SH), and Hubei Xingfa Chemicals Group (600141.SH).
**Risk Warnings** 1) AI data center construction progress falling short of expectations 2) Environmental policy risks 3) Intensified industry competition risks
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