The Core Battlefield of Domestic Substitution: MCU Chips! The ‘Cooling Down’ Revolution with AI Servers

In the A-share market, MCU chips and liquid-cooled servers are the leading stocks and core components of these two important sectors and their industrial chains.

These two sectors represent the “core of intelligent control” and “high-performance cooling solutions,” which are important cornerstones in the development of artificial intelligence and the digital economy.

MCU (Microcontroller) Chip Sector

MCUs are known as the “core of intelligent control” and are widely used in various electronic devices. Their industrial chain mainly includes design, manufacturing, packaging, and application stages.

1. Leading Design and R&D Companies:

• GigaDevice (603986): The absolute leader in MCU design in China, with a wide product line that includes general-purpose MCUs based on the Arm Cortex-M core and automotive-grade MCUs. Its brand recognition, product variety, and market share are all leading in the domestic market.

• Chipown (300327): Focused on home appliance MCUs and lithium battery management chips (BMIC), it is an invisible champion in home appliance main control chips, with strong customer relationships and profitability.

• National Technology (300077): Has certain advantages in the general MCU field and possesses security chip technology, with products applied in industrial control, the Internet of Things, and other fields.

• Fudan Microelectronics (688385): Not only leads in the FPGA and security chip fields but also occupies an important position in the high-reliability industrial control MCU and smart meter MCU markets.

• Espressif (688018): A leader in the global IoT Wi-Fi MCU communication chip field, deeply integrated with the IoT device market, with an active developer ecosystem.

2. Related Companies in the Industrial Chain:

• Manufacturing and Packaging: Most domestic MCU companies adopt a “Fabless (design) + foundry” model. For chip manufacturing, focus on SMIC (688981) and Huahong Semiconductor; for packaging, pay attention to Changdian Technology (600584) and Tongfu Microelectronics (002156).

• Upstream IP and EDA: MCU design relies on IP such as Arm cores and EDA tools, with related companies like Chipone (688521) (IP licensing) and HuaDa Jiutian (301269) (EDA tools).

Core Growth Logic:

• Domestic Substitution: This is the core driving force, especially in key areas such as home appliances, industry, and automotive, where the market share of domestic manufacturers continues to rise.

• Expansion of Application Fields: Penetration from consumer electronics to automotive electronics (explosive demand for automotive-grade MCUs), industrial control (high reliability requirements), and the Internet of Things (low-power connectivity needs) in high-value areas.

• Technological Upgrades: Products are developing towards 32-bit high-end, high-performance, low-power directions, with unit prices and profit margins increasing accordingly.

Liquid-Cooled Server Sector

With the explosive growth of AI computing power demand, traditional air cooling cannot meet the heat dissipation needs of high-density GPU servers, making liquid cooling (especially cold plate liquid cooling) technology an inevitable choice. Its industrial chain covers components, integration, and services.

1. Core Component and Solution Providers:

• Inspur (002837): A leader in domestic temperature control equipment, with a comprehensive technology route (covering both cold plates and immersion cooling), deeply integrated with leading internet and communication equipment manufacturers, recognized as a leading enterprise in liquid-cooled server temperature control solutions.

• GCL-Poly (300499): Early in power electronics thermal management, it was the first to launch liquid cooling products for servers, possessing first-mover advantages and technical accumulation in components and system integration such as cold plates, pumps, and heat exchangers.

• Shuguang Digital (872808): Backed by Zhongke Shuguang, its immersion phase change liquid cooling technology (C8000 system) is very advanced, with a high energy efficiency ratio, providing significant advantages in the high-end computing market.

• Shenling Environment (301018): Mainly engaged in data center environmental control, providing liquid-cooled cabinets and overall solutions for data centers, benefiting from the trend of green energy-saving renovations in data centers.

• Feirongda (300602): A materials and components supplier, laying out liquid cooling plates, thermal conductive materials, etc., providing heat dissipation components for server manufacturers.

2. Server Manufacturers (Users of Liquid Cooling Technology):

• Industrial Fulian (601138): A global server manufacturing giant, providing OEM services for major cloud service providers (CSPs) and brands, and launching its own liquid-cooled server solutions, which will directly benefit from the growth in AI server demand.

• Inspur Information (000977): A domestic server leader, actively developing and launching a full-stack liquid cooling solution, leading in the AI server market share.

• Unisplendour (000938): Its subsidiary H3C is also an important server supplier, fully laying out liquid cooling technology.

Core Growth Logic:

• Rigid Demand for AI Computing Power: High-end AI servers from companies like NVIDIA (such as H100, B100, GB200) consume enormous power, making liquid cooling a “must-have” rather than an “optional” choice.

• Policy Drivers and PUE Requirements: The state requires that newly built large data centers have a PUE (Power Usage Effectiveness) generally below 1.3, which is difficult to achieve with traditional air cooling; liquid cooling is the most effective technical path to achieve low PUE.

• Cost Reduction and Efficiency Improvement: In the long run, liquid cooling can effectively reduce the operating electricity costs of data centers, with its economic benefits gradually becoming apparent.

Market Trends and Comprehensive Risks

Risks in the MCU Sector:

1. Industry Cyclicality: The semiconductor industry experiences cyclical fluctuations, which may face inventory adjustments and downward price pressures.

2. Intensifying Competition: The increase in domestic manufacturers may lead to price competition in the general market.

3. Technological Iteration Risks: Continuous follow-up on advanced processes and design techniques is required, with significant R&D investment.

Risks in the Liquid Cooling Sector:

1. Uncertainty in Technology Routes: Although cold plate technology is currently mainstream, there is some discussion about whether immersion cooling (especially phase change immersion) will be the future direction.

2. Long Customer Validation Cycles: Products entering large data centers require long validation periods, and the speed of performance realization may be slower than market expectations.

3. Dependence on Major Customers: Performance is highly dependent on the purchasing rhythm and capital expenditures of leading internet companies and server manufacturers.

Investment Perspective Summary

• MCU Chips: The investment logic focuses on the “depth and breadth of domestic substitution”. Pay attention to whether companies can successfully penetrate high-barrier, high-profit markets such as automotive-grade and industrial-grade. The progress of GigaDevice in automotive MCUs and the market share increase of Chipown are key observation points.

• Liquid-Cooled Servers: The investment logic focuses on the “certainty of benefiting from the explosion of AI computing power”. This is an emerging track from 0 to 1, with huge potential for penetration. Pay attention to each company’s ability to “land orders” and “realize performance”. The solution capabilities and customer binding depth of Inspur and GCL-Poly are core factors.

Please Note: The above content is a summary and analysis based on publicly available information and does not constitute any investment advice. The stock market has risks, and investment should be cautious. It is recommended to conduct in-depth research and independent judgment before making any investment decisions.

Special Statement: The content of this account is derived from the organization of historical public information from the internet. If there are any errors, please refer to the latest information. It is for research and discussion purposes only and does not constitute any investment advice. Please do not use this as a basis for investment decisions. If there are any inappropriate aspects, please feel free to supplement and correct. Financial management has risks, and investment should be cautious.

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