Zheshang: The high-end TIM materials market shows tiered scarcity, with scale rising rapidly.

Zheshang released a research report stating that under the leap in AI power consumption, TIM has shifted from an auxiliary material to a bottleneck. High-end TIM supply is tight, and materials are iterating from traditional silicone grease to graphene and liquid metal, giving rise to new tiers such as TIM1.5/TIM3. The high-end market shows tiered scarcity; the real barrier for high-end TIM lies in the closed-loop mass production process and the 1-3 year customer certification cycle, resulting in scarce effective supply. The value of the thermal BOM is being reallocated, with traditional air-cooling auxiliary materials transitioning to core liquid-cooling interfaces. NVIDIA Rubin is shifting to fully adopt new graphene thermal interface materials, which, combined with the dense interface demand brought by 1.6T optical modules and CPO architecture, jointly supports the rapid rise in TIM market scale. Zheshang's main points are as follows: Under the leap in AI power consumption, TIM has shifted from an auxiliary material to a bottleneck, and high-end TIM supply is tight TIM is a key material that fills the microscopic gaps between heat sources and heat sinks, greatly reducing thermal resistance. The leap in AI power consumption has upgraded it from an auxiliary material to a bottleneck. Materials are iterating from traditional silicone grease to graphene (90-200W/mK) and liquid metal, giving rise to new tiers such as TIM1.5/TIM3. The high-end market shows tiered scarcity. The real barrier for high-end TIM lies in the closed-loop mass production process (yield, consistency) and the 1-3 year customer certification cycle, resulting in scarce effective supply. Hongfucheng, with its first-mover advantage in graphene, obtained certification from leading players, and its carbon-based gasket revenue increased sixfold in 2025, confirming strong profit elasticity under high barriers. Thermal BOM value reallocation, TIM opens up tens of billions in incremental space In recent years, the global TIM market has grown steadily, with China's growth rate reaching 11.09% and accounting for more than half of the share. AI computing power upgrades have reshaped TIM value: traditional air-cooling auxiliary materials are transitioning to core liquid-cooling interfaces, and NVIDIA Rubin is shifting to fully adopt new graphene thermal interface materials, opening up growth space for high-end TIM2; lidless bare dies and 3D stacking have further created high-barrier TIM "from 0 to 1" pure increments; combined with the dense interface demand brought by 1.6T optical modules and CPO architecture, these jointly support the rapid rise in TIM market scale. Key manufacturers positioned for domestic substitution In terms of the competitive landscape, the global TIM material competitive landscape shows distinct tiering: the high-end market has long been dominated by leading European, American, and Japanese companies, which, relying on decades of formulation accumulation and full-process quality control capabilities, occupy the main share in high-value-added fields such as semiconductor-grade and automotive-grade; the mid- and low-end markets have lower technical thresholds, with many domestic small and medium-sized enterprises and fierce price competition, and large-scale mass production has already been achieved. Domestic manufacturers started late and are accelerating R&D of high-end products, achieving phased breakthroughs in thermal paste, thermal pads, phase change materials, and new high-thermal-conductivity materials such as graphene and carbon nanotubes. Investment recommendation: Recommend paying attention to Jones Tech Plc, Darbond Technology, Suzhou Tianmai Thermal Technology, Shanghai Allied Industrial Group, Shenzhen FRD Science & Technology. Risk warnings: Risk of AI computing power and high-speed optical module demand falling short of expectations; risk of graphene TIM industrialization and customer introduction falling short of expectations; risk of competition from international manufacturers and alternative technology routes; risk of raw material supply and price fluctuations; risk of capacity expansion, customer concentration, and profitability fluctuations.