China Securities Co., Ltd.: Focus on investment opportunities in the liquid cooling thermal dissipation sector.

China Securities Co., Ltd. issued a research report stating that 2025 will be a year of significant increase in the penetration of NVIDIA AI chip liquid cooling. At the same time, with the increase in single chip power consumption, the size of the liquid cooling market will significantly grow. As ASIC cabinet solutions gradually adopt liquid cooling and domestic manufacturers introduce super-node solutions, along with the improvement in the maturity of the liquid cooling industry chain, the penetration of liquid cooling in the ASIC market and domestic market is expected to rapidly increase, further opening up market space. It is recommended to pay attention to the liquid cooling sector. Report on liquid cooling heat dissipation series II: Diamond material - the choice for efficient heat dissipation breakthrough As the semiconductor industry advances into more advanced processes, chip sizes shrink and power increases, the problem of "hot spots" becomes prominent. High chip surface temperature can lead to decreased safety and reliability. Diamond is an ideal heat dissipation material, with a thermal conductivity of up to 2000 W/mK, 4-5 times that of copper and silver, as well as several times to tens of times that of silicon, silicon carbide, and other semiconductor materials. Diamond also has a high bandgap, extremely high current carrying capacity, excellent mechanical strength, and radiation resistance, making it advantageous in high power density, high temperature, high pressure, and other harsh scenarios. Its application forms include diamond substrates, heat sinks, and diamond structures with microchannels, which can meet the core heat dissipation requirements of semiconductor devices, server GPUs, etc. In terms of preparation, chemical vapor deposition (CVD) is the mainstream method, capable of producing single crystal, polycrystal, and nanodiamonds, and related products have been developed by domestic and foreign companies. With the increase in computational power demand and the development of third-generation semiconductors, the future of diamond in the high-end heat dissipation market is vast. The "hot spots" problem of chips urgently needs to be solved. As the semiconductor industry follows Moore's Law and advances to 2 nanometers, 1 nanometer, or even angstrom levels, the shrinking sizes and increasing power poses unprecedented challenges in heat management. Chips generate a large amount of heat during operation, and if heat dissipation is not timely, chip temperature will rise sharply, affecting performance and reliability. When internal chip heat cannot be effectively dissipated, local areas may form "hot spots", leading to performance degradation, hardware damage and increased costs. Diamond is a good heat dissipation material. Traditional metal heat dissipation materials (such as copper and aluminum) have good thermal conductivity, but it is difficult to balance thermal expansion coefficients with high thermal conductivity and lightweight requirements. Diamond, as a heat dissipation material, has a thermal conductivity of up to 2000 W/mK, which is 13 times that of silicon (Si), 4 times that of silicon carbide (SiC), and 43 times that of gallium arsenide (GaAs), higher than that of copper and silver by 4-5 times. When high thermal conductivity is required, diamond is the only choice for a heat sink material. Diamond as a heat dissipation material mainly has three application methods: diamond substrates, heat sinks, and the introduction of microchannels in diamond structures. Diamond as a semiconductor substrate material has significant advantages. 1) High thermal conductivity: Diamond has the highest known thermal conductivity among existing materials, enabling effective heat dissipation in high power density equipment. 2) High bandgap: Diamond has a bandgap of about 5.5 eV, allowing it to operate stably in high temperature and high voltage environments, particularly suitable for high temperature/high power electronic devices. 3) Extremely high current carrying capacity: Diamond's current carrying capacity far exceeds that of traditional semiconductor materials, making it suitable for high current applications. 4) Excellent mechanical strength: Diamond's hardness and wear resistance allow it to maintain stable performance under harsh operating conditions, increasing device reliability and lifespan. 5) Radiation resistance: Diamond's radiation resistance makes it suitable for use in high radiation environments such as space and nuclear energy. Liquid Cooling Series Report I: Thermal Interface Materials - Building High-speed Heat Dissipation Channels for Chips and Other Electronic Components With the development of high-density chips and packaging technology, the heat dissipation requirements of electronic components continue to increase. China's thermal interface materials (TIM) market size increased from 9.75 billion yuan in 2018 to 18.75 billion yuan in 2023, with a compound annual growth rate of 13.97%, showing significant growth. In chip heat dissipation, TIM1 and TIM2 constitute a "dual heat conduction engine", where TIM1 directly contacts the chip, requiring low thermal resistance and high thermal conductivity, using fillers such as graphene and boron nitride with high thermal conductivity; TIM2 matches the hot plate and heat sink, balancing heat dissipation efficiency and cost, with a thermal conductivity usually between 5-10 W/mK. The two reduce contact thermal resistance by filling gaps to ensure the stable operation of the chip. In addition, TIM is widely used in the consumer electronics and new energy vehicle sectors, accounting for 46.7% and 38.5% respectively, with promising prospects as downstream demand upgrades. Heat Dissipation Demand for Electronic Components Increases, TIM Becomes Core Heat Dissipation Component With the continuous development of high-density chips and packaging technology, the heat dissipation issue of electronic components becomes increasingly prominent. Thermal Interface Materials (TIM) as core heat dissipation products are experiencing rapid growth in the market. TIM is widely used in various fields such as computers, consumer devices, telecommunications infrastructure, and automobiles, mainly to fill the small gaps between heat dissipation components and heat-generating components, reducing contact thermal resistance and increasing heat dissipation efficiency. TIM has a wide range of applications, leading product iterations in chip heat dissipation In chip heat dissipation, TIM1 and TIM2 play a role as a "dual heat conduction engine". The thermal power of NVIDIA GPUs has increased from 700W for H100 to 1200W for B200, and the heat flux density of mobile chips has exceeded 15W/cm, leading to a sharp increase in heat dissipation demand. In the consumer electronics sector, with the increasing performance and power consumption of devices such as smartphones and tablets, heat dissipation solutions are continuously upgraded. From traditional thermal interface materials with graphene films to composite solutions such as heat pipes and hot plates, the penetration of high thermal conductivity materials is gradually increasing. In addition, electronic products such as VR/AR devices, solid-state drives, smart speakers, and wireless chargers are placing higher demands on heat dissipation, requiring precise heat dissipation solutions for segmented scenarios. New materials help breakthroughs in TIM heat dissipation capabilities, and the localization rate is expected to continue to rise In the future, with the continuous development of new materials such as diamond materials with superior performance and high thermal conductivity graphene and other nanomaterials, the heat dissipation capabilities of thermal interface materials will be further improved. Currently, the global TIM market is still dominated by overseas companies, but driven by the increase in localization rates of upstream materials and breakthroughs in research and development barriers, the market share of domestic companies is expected to gradually increase. At the same time, as downstream markets such as consumer electronics and automotive electronics continue to expand, the thermal interface materials industry will have a broader development space.