With liquid cooling solutions becoming hot ticket items of late, thermal solution manufacturer Auras Technology has stepped up the expansion of its facilities in Thailand, producing Coolant Distribution Units (CDU), manifolds, and pumps locally to meet clients' demand for production diversification.
Auras has been the most vocal proponent of liquid cooling in the thermal management industry. Company chairman Lin Yu-Sheng predicts a transition from air cooling to liquid cooling in 2024 as AI computational demands push GPUs to their thermal ceilings. Beginning in the second quarter of 2023, Auras has received orders for liquid cooling solutions from US and China-based customers, and shipments have increased.
Liquid cooling for servers will account for 5–10% of total revenue in 2024, up from low single digits in 2023. Auras' total revenue in 2024 will also grow by 20% compared to the previous year.
For 2023, Auras reported an annual revenue of NT$12.714 billion (US$384 million), an 8.19% drop from the previous year. A 20% growth in 2024 means that revenue will reach NT$15.256 billion (US$482 million).
Assuming that liquid cooling accounted for 3% of revenue in 2023 and considering the company's predictions for 2024, revenue from liquid cooling will at least double. It will increase from an estimated NT$381 million (US$12 million) in 2023, to NT$762 million-1.525 billion (US$24-48 million) in 2024.
At the GTC conference on March 18, Nvidia is expected to announce its next-gen B100 AI chip, and possibly even release information regarding its B200 chip. For thermal solution suppliers, the question is whether the Thermal Design Power (TDP) for these new chips will exceed the current H100's 700 watts, and even jump as high as 1,000 watts.
According to cooling solution manufacturers, a TDP of 1,000 watts does not necessarily mean that liquid cooling is a must since current 3D Vapor Chamber (VC) solutions can handle the heat load. However, such solutions require chassis heights of 4U or above, while liquid cooling solutions can fit within 2U chassis.
This means more server units can fit within each cabinet, thus increasing the computational power per area unit. Furthermore, more efficient liquid cooling can reduce the need for air conditioning around server cabinets, improving Power Usage Effectiveness (PUE) and reducing the associated carbon footprint.
Cloud service providers and enterprise server brands will need to take liquid cooling seriously once the TDP of chips reaches 1,000 watts, says Lin Yu-Sheng. Lin predicts that demand will truly explode in 2025.
This sentiment has been echoed by Chenbro Micom's CEO Corona Chen. During the company's recent earnings call, Chen noted that liquid cooling will become the norm in one to two years, judging from current design trends.
Server cooling to bring increased profitability
In terms of the thermal requirements for Nvidia's next-gen chips, Auras offers no comment. The company only stated that it would not be absent from liquid cooling trends in the future.
Auras stated that the expanded production capacity at its Thailand plant will focus on liquid cooling to meet customer demand. Parts for liquid cooling systems are produced primarily in China.
As customers and orders in the liquid cooling segment continue to accumulate, Auras expects liquid cooling for the first quarter of 2024 to account for a similar share of revenue as in 2023 and increase to 5-10% by the second half of 2024. Server cooling solutions are also expected to reach 30% of total revenue.
In terms of revenue in 2023, Auras saw notebook products account for 36%, VGA 26%, servers 23%, desktop PCs 10%, and other products 5%. IGross margin grew by 4% compared to 2022 even as total revenue decreased, thanks to an increase in revenue for high-end gaming notebooks and servers.
Looking ahead to 2024, the company predicts a decrease in notebook products to account for 32% of revenue, server products will reach 30%, desktop PCs will reach 7%, VGA will reach 22%, and other products will reach 9%. Other products include automotive and smartphone cooling, and new products in the second half of 2024. Profitability will continue to improve, as server cooling solutions account for a growing share of the company's revenue.
Article translated by Kevin Wang
