According to Zhitong Finance APP, Zhejiang Merchants Securities released a research report stating that as the power of AI server cabinets rapidly increases, cold plate liquid cooling is approaching its limits in certain high-density deployment segments, and the penetration rate of immersion liquid cooling is expected to rise, driving a surge in demand for fluorinated liquids. According to QY Research data, fluorinated compounds currently dominate the immersion cooling liquid market, accounting for approximately 94.2% of the share. Based on the calculation of approximately 2-3 kilograms of cooling liquid required per kilowatt of cabinet power, the power of the NVIDIA NVL 144 server cabinet reaches 200KW, which would require about 0.5 tons of fluorinated liquid if using immersion liquid cooling. For every 10,000 cabinets, 5,000 tons are needed. With an estimated shipment of 2.1 million AI servers in 2025 and a penetration rate of 1% for immersion liquid cooling, the demand for fluorinated liquids is expected to reach 10,500 tons.

Perfluoropolyether is expected to become the preferred fluorinated liquid for immersion liquid cooling

In immersion liquid cooling technology, the cooling liquid comes into direct contact with electronic products, which imposes strict requirements on the insulation, heat transfer, and other properties of the cooling liquid. An ideal immersion cooling liquid must meet low dielectric constant, good insulation, low surface tension, low viscosity, good material compatibility, high chemical stability, good thermal transfer performance, safety, and a low GWP value. By comparison, perfluoropolyether is expected to become the preferred fluorinated liquid for future immersion liquid cooling systems as a substitute for 3M fluorinated liquids.

High synthesis difficulty of perfluoropolyether leads to an oligopoly market

The synthesis of perfluoropolyether is challenging, with only Solvay, Chemours, and Daikin producing it on a large scale globally, and only a few domestic companies possessing the production technology. There are currently two production processes for perfluoropolyether: photochemical oxidation and anionic polymerization, with K-type and D-type perfluoropolyethers synthesized via anionic polymerization, while Y-type and Z-type perfluoropolyethers are produced through photochemical oxidation. The mainstream perfluoropolyether market currently consists of K-type and Y-type, with K-type represented by companies such as CAPCHEM and Chemours, and Y-type represented by companies such as Solvay and Juhua Co., Ltd.

Recommended leading companies in perfluoropolyether fluorinated liquids

CAPCHEM (300037.SZ): It has established a production capacity of 2,500 tons of perfluoropolyether, which can be used for various scenarios such as immersion liquid cooling in data centers and temperature-controlled cooling for dry etching in wafer manufacturing. The current production capacity can effectively support the delivery of existing cooperation orders from downstream customers. In the future, to meet the replacement demand released after the shutdown of international mainstream manufacturers, as well as the incremental demand from downstream industries such as data centers and semiconductors, the company has formulated a clear expansion plan: on one hand, it will optimize capacity utilization efficiency and enhance unit capacity output through technological transformation of existing production facilities; on the other hand, it will systematically expand the production capacity of fluorinated liquid products such as hydrogen fluoride ether and perfluoropolyether, relying on the "30,000 tons high-end fluorochemical project." The total investment for the 30,000 tons high-end fluorochemical project is approximately 1.2 billion yuan, with plans to complete the main construction by 2026 and trial production by December 2027.

Juhua Co., Ltd. (600160.SH): Its "perfluoropolyether-based cooling liquid" has been selected for the list of excellent industrial new products in Zhejiang Province for 2025. The company's perfluoropolyether-based cooling liquid is divided into three series: JHT, JHLO, and JX, which can be applied to key material localization and substitution needs in thermal management and lubrication in industries such as data centers, semiconductor manufacturing, chip packaging leak testing, machinery, and chemicals JX immersion cooling liquid is a single-phase immersion cooling liquid for data centers, characterized by high insulation, good chemical stability, and a wide operating temperature range. Demonstration applications of hundreds of kilowatts and megawatts data centers have been established in Quzhou and Jinhua, respectively, with a measured PUE as low as 1.065 by the China Academy of Information and Communications Technology (CAICT) Tair Laboratory. The company's giant chip cooling liquid project is planned to have an annual production capacity of 5,000 tons, with the first phase of 1,000 tons already completed and put into production.

Risk Warning

The development of intelligent computing centers is lower than expected, AI application development is not as expected, risks of intensified market competition, and risks of customer development not meeting expectations, etc