In the current era of booming AI computing power, optical modules and PCBs are crucial components of the AI computing power chain, having deeply integrated with the wave of infrastructure development, resulting in significant increases in both shipment volume and value. Now, liquid cooling technology is emerging as a potential strategic investment opportunity similar to PCBs and optical modules.
As a key link in the AI computing power chain, liquid cooling possesses three main characteristics: “strong growth, complete narrative, and favorable odds.” From a probability perspective, the fundamental slope change of liquid cooling may be steeper. Currently, the liquid cooling industry is still in its early stages, and compared to the already mature PCBs and optical modules, it has enormous development potential. With the rapid advancement of AI technology, chip power consumption has surged, and the application of high-end chips requires supporting liquid cooling technology. For example, NVIDIA’s GB300 series servers are set to launch in the second half of 2025, with a single cabinet power consumption significantly exceeding the limits of air cooling, which will lead global cloud service providers to fully adopt liquid cooling solutions. Additionally, policy drivers have transformed liquid cooling from an “optional” to a “necessity.” The government continues to introduce stricter energy efficiency standards, focusing on promoting the synergy between computing power and electricity in data centers. Liquid cooling technology can effectively reduce the PUE value of data centers and improve energy efficiency levels, thus expanding its market demand.
From an odds perspective, after the market adjustment, the odds advantage of liquid cooling within the AI computing power chain is quite evident. Liquid cooling is currently in the rapid development phase of “0→1,” with high certainty of increasing penetration, and there has not yet been chaotic expansion on the supply side, making its odds significantly better than those of optical modules and PCBs. It is predicted that from 2025 to 2027, the domestic liquid cooling market size will grow from 15 billion to 34.7 billion, with an increase of over 50%, and the industry penetration rate is expected to quickly exceed 50%.
The liquid cooling industry chain can be divided into three main segments: upstream components, midstream system integration and equipment manufacturing, and downstream applications. Each segment has significant differences in technical barriers and competitive landscape. Currently, the competitive landscape of the liquid cooling industry presents a pyramid structure, with leading companies like Infinera occupying the top due to their technological, customer resource, and brand advantages, thus holding pricing power and the authority to set industry standards. As the liquid cooling market continues to develop, companies along the industry chain are expected to encounter new development opportunities.
Of course, the liquid cooling industry also faces challenges such as rapid technological iteration and intensified competition. However, overall, liquid cooling technology aligns with the three essential elements of a strong theme: clear top-down promotion, large industry space, and concentrated catalysts. As a key technology for solving the heat dissipation challenges of high computing power chips, its strategic position is becoming increasingly prominent. Therefore, liquid cooling is expected to become the next PCB and optical module, playing an important role in the AI computing power industry chain and bringing significant development potential and investment opportunities to related enterprises.