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The GPU+ASIC liquid cooling market is experiencing a comprehensive explosion, emphasizing the importance of a new round of industrial trends.
This round of liquid cooling is analogous to the optical modules of 2023, marking the eve of a technological shift in the industry and a large-scale increase in orders.
GPU and ASIC networking racks are rapidly and comprehensively shifting to liquid cooling solutions.
Four major market expectations:1️⃣ The penetration rate of liquid cooling will not be a slow climb in 2026-2027; some models will be 100% standard equipped, and the industry penetration rate is expected to quickly exceed 50%.
2️⃣ In addition to servers, switch products will also be widely equipped with liquid cooling after upgrading to 102.4T.
3️⃣ The ASIC market scale is not weaker than NV; and from the list of direct suppliers, the competitive landscape is better than market expectations.
4️⃣ The value of liquid cooling per single GPU/ASIC exceeds expectations, reaching $1500 (for the entire system), and with the increase in chip power, the value will grow simultaneously.
We strongly recommend Invec, while also updating the latest situations and splits of companies in the industrial chain such as Keshin New Energy, Zhongshi Technology, Dingtong Technology, and Yidong Electronics.
Inflation and Liquid Cooling Conference Summary
1. The core logic of optimism for the liquid cooling track
Huge market space:
Based on NVIDIA’s GB300 architecture (132kW per cabinet), the value of a liquid cooling cabinet is approximately 700,000 RMB. According to NVIDIA’s optimistic guidance (100,000 cabinets next year), the liquid cooling market space is about 70 billion RMB (with power supplies accounting for about 40 billion). The liquid cooling market space is about four times that of the PCB market, making it highly attractive. The overseas market (mainly the NV chain) is the core, with an expected liquid cooling market of about 63 billion RMB next year (90,000 cabinets). The share of ASIC (Google TPU, AWS Trainium/Inferentia, etc.) servers is rapidly increasing, and their liquid cooling demand (from Meta, Google, AWS, etc.) is expected to contribute several billion to the market, with the total overseas liquid cooling market expected to approach or exceed 100 billion. The domestic liquid cooling market is expected to reach about 15 billion RMB by 2026 (assuming a 50% penetration rate). The rhythm of profit release is rotating:
The rhythm of profit release is rotating:
In the first half of the year: profit release from PCB and optical modules (inside the cabinet). In the second quarter: the performance inflection point of Industrial Fulian (related to cabinet racks) is emerging. In the second half of the year and beyond: focus on investment opportunities in external AIDC (liquid cooling, power supplies, etc.), as the profit elasticity of liquid cooling is about to be released. There are multiple demand drivers (not limited to NV):
NV chain: GB300 is expected to ramp up at the end of the third quarter (September-October), followed by continuous iterations of Rubin/Rubin Ultra, with power density increasing (Rubin cabinets may exceed 400kW), driving upgrades in liquid cooling technology and value (inflation logic).
ASIC chain upward revision:
Meta’s order revision: driving Invec (150-200 million USD), Jianghai Co. (several hundred million order share), Jinpan Technology (annualized 600 million RMB) and other new orders. Google supply chain: domestic AIDC companies (such as Oulu Tong) are actively connecting and are expected to receive orders in Q4. AWS, Microsoft, etc. also have new product plans, with power density increasing (e.g., Meta TVR rack 170kW), making liquid cooling standard. Domestic demand is starting: Alibaba, Tencent, and ByteDance are prioritizing liquid cooling. Alibaba is the fastest (with several tens of megawatts of projects by the end of the year), followed by Tencent and ByteDance. Domestic AIDC construction will proactively layout liquid cooling architecture.
2. The core highlights of liquid cooling technology (Host & Peilin)
Best inflation direction:
The shift from air cooling to liquid cooling is an inevitable trend (cabinets with power >20kW fail with air cooling, and >100-120kW liquid cooling becomes standard). The biggest change from GB200 to GB300 is full liquid cooling. Future iterations (such as Rubin) will still see the most significant changes in liquid cooling. The inflation magnitude is the largest: technological upgrades (such as phase change liquid cooling value increase of 30-50%) and power density increases drive price increases (anti-deflation or even inflation). Competitive landscape: the power supply landscape is currently slightly better than liquid cooling, but the inflation logic of liquid cooling is stronger. The technological upgrade and value change from GB200 to GB300:
Design changes: from large cold plates covering multiple chips to each GPU/CPU having an independent small cold plate. Impact: the number of cold plates increases by 2-3 times. The number of quick connectors increases by 2-3 times. Cold plates/quick connectors are miniaturized, and technical requirements are raised, with the price decrease being smaller than the area reduction (value decrease <30%).
Value inflation results (per cabinet): total value of liquid cooling: 600,000 (GB200) → 700,000 (GB300). Core drivers: cold plates (1500 RMB/kW → 1800 RMB/kW), quick connectors (700+ RMB → 1000+ RMB). The value of CDU is relatively stable (about 1500 RMB/kW), but future power increases will also drive its growth. Breakdown of the value of the GB300 liquid cooling system (approximately 700,000 per cabinet):
CDU (Cooling Distribution Unit): ~200,000 (accounting for ~28.6%) cold plates: ~240,000 (accounting for ~34.3%) – highest value, highest barrier quick connectors: ~160,000 (accounting for ~22.9%) Manifold + piping: ~100,000 (accounting for ~14.3%) (Note: Feilong Co.’s electronic pump is the core component of CDU, accounting for 35-40% of CDU value, i.e., approximately 70-80,000 per cabinet). The core barrier of cold plates:
The core barrier lies in design (leak-proof), not manufacturing; leakage can lead to server scrapping, with severe consequences. Verification is strict, and supplier introduction is cautious (e.g., Delta was downgraded due to leakage issues). High value (250,000 per cabinet) and high technical difficulty make it a key component of the liquid cooling system.
Technological path outlook:
Current mainstream: unidirectional cold plate liquid cooling.
Future trends:
Phase change liquid cooling: stronger heat dissipation capability, value 30-50% higher than unidirectional cold plates, is the future direction for high power. Immersion liquid cooling: earlier, but has long-term potential for large-scale applications.
3. Key liquid cooling companies and their business positioning (Host & Peilin & Gao Xin)
Invec:
Business: CDU, Manifold, quick connectors (UQD). Does not produce cold plates (outsourced).
Highlights:
Entered NVIDIA’s CDU whitelist.
Entered NVIDIA’s Manifold and quick connector whitelist.
Indirectly supplies Meta switch liquid cooling and Meta ASIC server liquid cooling through North American ODM CLS (already has orders, with significant expected growth in 2026).
Stable temperature control business in domestic and Southeast Asia AIDC.
Elastic calculation (2026): domestic + Southeast Asia main business about 1 billion profit, North American increment (Meta + switch) about 400 million profit, totaling over 1.4 billion. Current valuation 28 times.
Siquan New Materials:
Business: cold plates (core product).
Highlights:
Entered NVIDIA cold plate whitelist (GB200), GB300 is under testing. The cold plate market space is huge (over 20 billion overseas), and if it captures 10% market share, the elasticity is enormous. Domestic business: stable growth in mobile phone heat dissipation (graphite, VC), Alibaba AIDC cold plates are expected to ramp up in 2026. Elastic calculation (2026): main business + domestic cold plates about 240 million profit. Successful overseas expansion (capturing 10% overseas share, 25% net profit margin) could bring over 500 million profit increment, with huge elasticity.
Zhongshi Technology:
Business: heat dissipation modules (upstream components of cold plates, accounting for about 1/3 of cold plate costs).
Highlights:
Indirectly supplies NV cold plate heat dissipation modules through Foxconn. Rapid growth in optical module heat dissipation business (800G/1.6T), leading market share. Elastic calculation (2026): main business about 350 million profit, optical module heat dissipation increment about 100 million, server heat dissipation module increment about 100 million, totaling 500-600 million profit. Current valuation 18 times.
Chuanhuan Technology:
Business: piping, quick connectors (under research).
Highlights:
Piping: supplies domestic chain (Huawei), overseas chain (Cooler Master, ABC as Tier 2).
Quick connectors: under research, aiming to supply NV (as Tier 2). Sample testing is ongoing (internal testing completed in late August, with subsequent customer sample submissions).
Elastic calculation (2026): main business + piping about 395 million profit. If quick connectors break through (capturing 10% share), it could bring nearly 300 million profit increment, with huge elasticity (211%). Current valuation 20 times (not including quick connector expectations).
Feilong Co.:
Business: electronic liquid cooling pumps (core component of CDU, accounting for 35-40% of CDU value, approximately 70-80,000 per cabinet).
Highlights:
Domestic: main supply for Huawei Ascend series, with stable income from the ramp-up of 910B/C (expected revenue of over 200 million in 2026).
Overseas: has connected with NVIDIA’s core suppliers and made small shipments; also directly submitted samples to NVIDIA (feedback expected by the end of August, with possible mass production in Q4). Aiming to penetrate ASC customers.
Elastic calculation (2026): traditional main business (automotive water pumps) about 500 million profit. Liquid cooling pumps (Huawei + NVIDIA) are expected to contribute over 250 million profit. If overseas breakthroughs go smoothly, elasticity is significant (50%+ potential). Current traditional business valuation 20 times.
4. Important reminders and conclusions (Host)
The external AIDC (liquid cooling, power supplies) market space is comparable to PCB and is currently a key investment direction.
Diversified focus: not only closely monitor NV (GB300 ramp-up, Rubin iteration), but also pay attention to the ASIC chain (Meta/Google/AWS order revisions) and domestic demand (Alibaba/Tencent/ByteDance).
The liquid cooling track requires careful selection:
Value ranking: cold plates (highest) > CDU > UQD (quick connectors).
Cold plates have the highest barriers (leak-proof design) and are the preferred direction.
Distinguish concepts: the Manifold made by Invec is a “water distributor/cooling plate,” not the highest value “liquid cooling plate.”
Domestic liquid cooling projects are landing: Alibaba is expected to launch its first tens of megawatts project in Q4, which is an important industrial signal.
Summary: The meeting deeply analyzed the huge market space for liquid cooling technology driven by the explosion of AI computing power (especially overseas), the inflation logic brought by technological upgrades, the rhythm of profit release, and detailed the value composition, technical barriers, and development trends of liquid cooling systems. Five companies with competitiveness and overseas potential in different segments of the liquid cooling industry chain (cold plates, CDU/pumps, heat dissipation modules, piping/connectors) were recommended, along with their business positioning, core highlights, and performance elasticity calculations. The core conclusion is that liquid cooling is a key track in AI infrastructure with vast space, continuous inflation potential, and imminent profit release.
Q&A:
Q&A format summary
How large is the market space for the liquid cooling track?
Based on NVIDIA’s GB300 architecture, the value of a liquid cooling cabinet is approximately 700,000 RMB. According to NVIDIA’s optimistic guidance, 100,000 cabinets next year will result in a liquid cooling market space of about 70 billion RMB. The overseas market (mainly the NV chain) is expected to be about 63 billion RMB next year. The share of ASIC servers is rapidly increasing, and it is expected to contribute several billion to the market, with the total overseas liquid cooling market expected to approach or exceed 100 billion. The domestic liquid cooling market is expected to reach about 15 billion RMB by 2026.
What is the rhythm of profit release in the liquid cooling market?
In the first half of the year, the main profit release came from PCB and optical modules (inside the cabinet). In the second quarter, the performance inflection point of Industrial Fulian (related to cabinet racks) is emerging. In the second half of the year and beyond, focus on investment opportunities in external AIDC (liquid cooling, power supplies, etc.), as the profit elasticity of liquid cooling is about to be released.
What are the main driving factors for liquid cooling demand?
The main driving factors include the ramp-up of NVIDIA’s GB300 architecture and its subsequent iterations (such as Rubin/Rubin Ultra), the upward revision of demand for ASIC servers (such as Meta, Google, AWS, etc.), and the initiation of demand from domestic companies like Alibaba, Tencent, and ByteDance prioritizing liquid cooling.
Why is liquid cooling the best inflation direction?
The shift from air cooling to liquid cooling is an inevitable trend; air cooling fails when cabinet power exceeds 20kW, and liquid cooling becomes standard when it exceeds 100-120kW. Liquid cooling technology upgrades and power density increases drive price increases, exhibiting anti-deflation or even inflation characteristics.
What are the technological upgrades and value changes from GB200 to GB300?
Design changes from large cold plates covering multiple chips to each GPU/CPU having an independent small cold plate, with the number of cold plates and quick connectors increasing by 2-3 times. The value inflation result is that the total value of liquid cooling per cabinet increases from 600,000 (GB200) to 700,000 (GB300). Core driving factors include the price increase of cold plates and quick connectors.
What are the future trends of liquid cooling technology?
The current mainstream is unidirectional cold plate liquid cooling, while future trends include phase change liquid cooling (with stronger heat dissipation capability and higher value) and immersion liquid cooling (which has long-term potential for large-scale applications).
What are Invec’s business and highlights?
Invec’s business includes CDU, Manifold, and quick connectors, having entered NVIDIA’s CDU and Manifold whitelists, and indirectly supplying Meta switch liquid cooling and ASIC server liquid cooling through North American ODM. Elastic calculation for 2026 shows that the domestic + Southeast Asia main business will yield about 1 billion profit, with North American increment about 400 million profit, totaling over 1.4 billion profit, with a current valuation of 28 times.
What are Siquan New Materials’ business and highlights?
Siquan New Materials’ business mainly focuses on cold plates, having entered NVIDIA’s cold plate whitelist, with a huge market space for cold plates. Domestic business is steadily growing, and Alibaba’s AIDC cold plates are expected to ramp up in 2026. Elastic calculation for 2026 shows that the main business + domestic cold plates will yield about 240 million profit, and successful overseas expansion could bring over 500 million profit increment.
What are Zhongshi Technology’s business and highlights?
Zhongshi Technology’s business includes heat dissipation modules, indirectly supplying NV cold plate heat dissipation modules through Foxconn, with rapid growth in optical module heat dissipation business. Elastic calculation for 2026 shows that the main business will yield about 350 million profit, with optical module heat dissipation increment about 100 million, and server heat dissipation module increment about 100 million, totaling 500-600 million profit, with a current valuation of 18 times.
What are Chuanhuan Technology’s business and highlights?
Chuanhuan Technology’s business includes piping and quick connectors, with quick connectors under research aimed at supplying NV. Piping supplies both domestic and overseas chains. Elastic calculation for 2026 shows that the main business + piping will yield about 395 million profit, and if quick connectors break through, it could bring nearly 300 million profit increment.
What are Feilong Co.’s business and highlights?
Feilong Co.’s business includes electronic liquid cooling pumps, primarily supplying Huawei’s Ascend series domestically, and has connected with NVIDIA’s core suppliers for small shipments overseas. Elastic calculation for 2026 shows that the traditional main business will yield about 500 million profit, with liquid cooling pumps expected to contribute over 250 million profit, and significant elasticity if overseas breakthroughs go smoothly.
What are the important reminders and conclusions for the liquid cooling track?
The external AIDC (liquid cooling, power supplies) market space is comparable to PCB and is currently a key investment direction. The focus is diversified, not only closely monitoring NV but also paying attention to the ASIC chain and domestic demand. The liquid cooling track requires careful selection, with cold plates being the preferred direction. The landing of domestic liquid cooling projects (such as Alibaba’s first tens of megawatts project in Q4) is an important industrial signal. Liquid cooling is a key track in AI infrastructure with vast space, continuous inflation potential, and imminent profit release.
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