The Surging Demand for Immersion Liquid Cooling in the Wave of the Digital Economy

In today's digital era, the global data center scale is expanding rapidly, and the demand for immersion liquid cooling is also continuously rising. What are the underlying development trends and opportunities behind this phenomenon?

As the digital economy becomes increasingly pervasive, breakthroughs in high-tech fields are accelerating the digital transformation process, and the terminal consumer market is thriving. These factors have generated diverse computing power demands, driving the development of high-density, high-computing power infrastructure. Taking China as an example, the digital economy has entered a new phase, focusing more on deepening applications, standardized development, and inclusive sharing. Currently, China is vigorously promoting the construction of high-computing power facilities such as intelligent computing, and businesses that heavily rely on computing power, such as artificial intelligence (AI), the metaverse, and graphic rendering, are flourishing.

According to estimates by the Qianzhan Industry Research Institute, nearly all large domestic enterprises are actively planning and implementing AI projects, and over 10% of large-scale enterprises have integrated AI into their core business operations. Globally, the AI market reached approximately $432.8 billion in 2022, a year-on-year increase of 19.6%, as reported by the Internet Data Center (IDC). The rapid expansion of data centers has also created significant growth opportunities for the fluorinated liquid market.

With the booming digital economy, the demand for AI and intelligent computing is surging. Smart devices, home life, urban management, and even autonomous vehicles are increasingly reliant on data centers. According to Synergy Research, Gartner, and Cisco, by 2021, the total number of hyperscale data centers operated by the world's top 20 cloud and internet service companies had increased to 700, showing remarkable growth. However, the explosive growth in data volume has also brought challenges, such as rising power consumption per rack and increasing difficulties in energy consumption and heat dissipation. Data from Colocation America shows that the average power per rack in global data centers reached 16.5 kW in 2020, a 175% increase compared to 2008. The power consumption of servers and other IT equipment is already substantial, and the energy required to cool these devices is also growing rapidly.

As energy consumption and heat dissipation requirements increase, the Power Usage Effectiveness (PUE) metric becomes crucial. PUE is the ratio of the total energy consumed by a data center to the energy consumed by its IT load, directly reflecting the energy efficiency of the data center. A PUE value closer to 1 indicates a "greener" and more energy-efficient data center, while a value exceeding 1 signifies additional energy consumption to support the IT load, with higher values indicating lower overall efficiency. Currently, the PUE values of domestic data centers remain relatively high, leaving significant room for improvement. The total energy consumption of domestic data centers reached 202.4 billion kWh in 2020 and is expected to grow to 411.5 billion kWh by 2030 as data center scales expand. According to the "National Data Center Application Development Guidance (2020)," the PUE of operational large and hyperscale data centers in China ranges from 1.45 to 1.55, while newly planned data centers aim for a PUE between 1.35 and 1.4, indicating substantial potential for energy efficiency improvements.

From a policy perspective, both national and local governments are actively promoting data center construction while emphasizing energy consumption reduction as a key goal. Data centers, as infrastructure developed based on next-generation information technologies, are typical representatives of computing power infrastructure. However, data center construction has long been plagued by environmental issues such as high energy consumption. Therefore, adhering to green development has become a consensus, and improving data center energy efficiency while reducing PUE is an inevitable direction for future development.

In this context, liquid cooling technology has emerged as a significant trend for the future development of data centers. Liquid cooling technology, simply put, uses liquid instead of air as a cooling medium to dissipate heat from components. Liquid-cooled servers inject liquid into the server to achieve heat exchange. In data centers, cooling systems are critical to improving energy efficiency, and liquid cooling technology represents the future direction. Traditional air-cooling systems rely on alternating cold and hot air channels for heat exchange, resulting in poor heat dissipation, high energy consumption, and significant space requirements. In contrast, liquid cooling systems use high-specific-heat-capacity liquids as heat transfer media, greatly enhancing cooling capacity while reducing noise and saving space. Today, liquid cooling technology is advancing rapidly, with companies such as Sugon, Huawei, Inspur, Lenovo, and Alibaba actively exploring its potential. China's liquid cooling technology development is not only on par with international standards but has also accumulated more extensive experience in large-scale applications.

From the perspective of downstream demand, the internet, finance, and telecommunications industries are experiencing particularly rapid growth in demand for liquid-cooled data centers. Liquid-cooled data centers are primarily used in scenarios such as supercomputing. As these three industries experience rapid business growth, the demand for liquid-cooled data centers will continue to rise. According to the "China Liquid Cooling Data Center Development White Paper," by 2025, liquid-cooled data centers are expected to account for 24% of the internet industry, 25% of the finance industry, and 23% of the telecommunications industry. In the internet industry, e-commerce, social platforms, and short video platforms, which have vast user bases and high business volumes, are the primary customers for liquid-cooled data centers. In the finance industry, the migration of information systems to the cloud and the increasing popularity of internet financial products have heightened the demand for agile responses and real-time business changes, further driving the need for liquid-cooled data centers. In the telecommunications industry, the trend toward cloud-based integrated information services has led to a comprehensive push for "cloud transformation," significantly boosting the demand for liquid-cooled data centers.

Against the backdrop of the rapid development of the digital economy, the demand for immersion liquid cooling continues to rise. In the future, it is expected to play an even greater role in the data center sector, injecting new vitality into industry development.