[Insights] Immersive Liquid Cooling Becomes Key Tech for AI Server Heat, Companies Focus

Intel collaborates with Foxconn, Microloops, and Inventec to introduce a new cooling technology. Boasting superior performance compared to conventional liquid cooling, this initiative, alongside Gigabyte and Wiwynn, aims to enter the server immersion liquid cooling technology market, positioning themselves for potential orders.

TrendForce’s Insights:

  1. Intel Teams Up with Taiwanese Manufacturers to Pave the Way for Liquid Cooling Technologies, Targeting Immersive Water-Cooled AI Server Orders

Intel, in collaboration with Foxconn, Microloops, and Inventec, introduces a brand new Liquid Cooling solution. This technology, capable of managing Thermal Design Power (TDP) exceeding 1500W, utilizes the principles of physical pressurization to facilitate rapid liquid flow for efficient heat dissipation.

With a threefold improvement in performance over conventional liquid cooling, the liquid cooling plate circulates water to dissipate heat. Future developments include non-conductive liquid solutions to mitigate leakage risks.

Simultaneously, Gigabyte’s subsidiary, GIGA Computing Technology, partners with liquid cooling experts CoolIT and Motivair to unveil cutting-edge liquid cooling solutions. The strategic focus on liquid and immersive liquid cooling aims to enhance the sustainability and energy efficiency of data centers.

Wiwynn, also keenly interested in liquid cooling technology, has secured substantial orders from Middle Eastern clients by prioritizing two-phase immersion cooling technology, with rumors suggesting the order’s value is approximately USD 4 billion.

The advantages of two-phase cooling technology include fanless operation, rapid heat dissipation, noiseless and vibration-free performance, and higher cooling energy efficiency. Moreover, it is less susceptible to environmental influences, ensuring normal usage.

On the other hand, Taiwanese manufacturers, AURAS Technology and AVC (Asia Vital Components), are actively developing and mass-producing open-loop liquid cooling and immersion liquid cooling technologies.

Due to the novelty of immersion cooling technology, the current market demand visibility is relatively low. However, major Taiwanese contract manufacturers are increasingly focusing on the technical development and introduction of immersion cooling solutions. This is primarily driven by the growing demand for high-end AI servers, which require efficient computation and often generate high power consumption.

At present, only immersion liquid cooling can provide a cooling solution surpassing 1500W, meeting the requirements of large-scale data centers. Consequently, numerous Taiwanese manufacturers are actively engaging in the development of this technology to seize the opportunities presented by the initial wave of immersion liquid cooling products.

  1. Short-Term Dominance of 3D VC Air Cooling and Open Liquid Cooling Technologies in Heat Dissipation Solutions

Due to the need for adjustments in facility structure, including the layout of cooling spaces, immersion liquid cooling comes with higher construction costs. Cases of immersion liquid cooling in large-scale data centers are also relatively rare.

In consideration of cost, many enterprise users still opt for 3D VC (Vapor Chamber) air cooling technology to establish their data centers, aiming to save on the significant costs associated with facility modifications.

3D VC air cooling and open liquid cooling technologies are the current primary options for heat dissipation solutions. The retrofitting cost for 3D VC is twice that of traditional cooling modes, while the cost for liquid cooling solutions can be up to 10 times higher than traditional modes.

Therefore, enterprise users need to tailor their server deployments based on specific requirements, taking into account the Thermal Design Power (TDP) to choose the corresponding heat dissipation solution.

For instance, AI servers with power consumption ranging from 1000 to 1500W can utilize open liquid cooling solutions, while those below 1000W may adopt the 3D VC cooling approach.

With the target of achieving net-zero emissions by 2050, both China and Europe impose restrictions on the Power Usage Effectiveness (PUE) of data centers, limiting it to no higher than 1.4.

In anticipation of this, server OEMs and cooling solution providers are expected to increase the development and offerings of liquid and immersive liquid cooling products. This trend aims to provide data centers with customized solutions and services, aligning with the evolving energy efficiency requirements.


[Insights] Global Data Centers Surge in 2023 and the Rise of Green DCs Development

A global surge in data center expansion is observed in 2023, emphasizing a notable trend in the rise of Green Data Centers (Green DCs). Major players embarking on the construction of large-scale data centers encounter challenges. Power constraints affecting capacity growth, mounting pressure to enhance IT efficiency, combined with the continual increase in energy costs, amplify operational and construction difficulties in data centers.

TrendForce’s Insights:

1. Prioritizing energy efficiency and conservation in data centers

Modern enterprises heavily rely on data centers, but the associated energy costs are substantial. The market is expected to grow by over 25% from 2023 to 2030. Current strategies for improving energy efficiency encompass (1) reducing the energy consumption of IT equipment, (2) minimizing losses in distribution devices and uninterruptible power supplies, (3) implementing airflow management to optimize cooling, and (4) optimizing cooling and humidification systems through Heating, Ventilation, and Air Conditioning (HVAC).

2. Global shift to net-zero carbon emissions and the rise of low-carbon Green DCs

The construction of Green DCs with lower carbon is becoming a pivotal approach for major players, especially in the design of IT infrastructure for server rooms. This includes components such as network routers, switches, storage systems, firewalls, server racks, and redundant power supplies, all of which are subject to energy-saving requirements.

Key practices involve adopting liquid cooling and energy-efficient core IT equipment to achieve improved energy efficiency. Certification standards, such as Green Mark DC Platinum Certification, play a crucial role. The TIA-942 standard, by TIA and ANSI, distinguishing data centers into Tiers I through IV, often requires compliance with certifications like ISO 20000 and ISO 27001. Additionally, the international standard ISO/IEC 22237 lays the groundwork for globally planning, constructing, and operating data centers based on shared principles in the future.
(Image: TIA)


[News] AI Server Makers Wistron and Wiwynn Stay Hot in Q4, Fueled by AI Shipment Surges

Wistron experienced a slowdown in shipments for product lines like PCs and displays in October, following the prior demand surge. However, their GPU-related AI server products continue to maintain their growth trajectory. Simultaneously, Wiwynn, a subsidiary of Wistron, witnessed a remarkable 20% month-over-month revenue increase due to the rising momentum in AI server-related project shipments, positioning them at the third-highest monthly revenue level in their history for the same period, reported by CTEE.

Both Wistron and Wiwynn hold an optimistic outlook for their AI server products, expecting the growth momentum to extend into the next year. In contrast, they foresee a return to growth trends for non-AI general-purpose servers and cloud data center servers next year, while AI server growth is expected to remain notably strong.

Wistron plays a pivotal role in the AI server supply chain and remains unaffected by high-end GPU shortages and U.S. export restrictions. Shipments in Q4 continue to exhibit consistent month-to-month growth, and the anticipated trend to peak in the second half of the year remains steadfast. Moreover, there are indications of a slight seasonal increase in general-purpose servers in Q4.

In a recent earnings call, Wiwynn maintains an optimistic stance for Q4 and the upcoming year. With the evident growth momentum from AI servers, they anticipate that developments in AI-related projects will lead to a continuous improvement in AI server product shipments.

Furthermore, Wiwynn’s third-largest customer business and AI server revenue both exceeded 10% in the third quarter, marking a significant milestone for the company. Back in October, Wiwynn had set up  a server plant in Malaysia to meet the surging demand for AI servers.

According to TrendForce’s anticipation, in 2023, the shipment of AI servers (including those equipped with GPUs, FPGAs, ASICs, etc.) is expected to exceed 1.2 million units, with a year-on-year increase of 37.7%, accounting for 9% of the total server shipments. In 2024, it is projected to further grow by more than 38%, with shipments reaching approximately 1.676 million units, and the share of AI servers will exceed 12%.
(Image: Wistron)

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[News] GIGABYTE Aims for Over NT$100 Billion Revenue, Doubles Server Performance This Year  

GIGABYTE held an online earning call on November 1st, during which General Manager Etay Lee expressed optimism about the company’s performance. The growth momentum in server and motherboard sectors remains robust, allowing GIGABYTE to potentially reach the significant milestone of NT$100 billion in annual revenue ahead of schedule. Additionally, the company is increasing its server revenue contribution this year, aiming for a remarkable double-digit growth.

As reported by Anue, Lee focused on the server sector, noting that the third quarter demonstrated impressive server revenue, and this momentum is expected to continue into the fourth quarter. The company is poised for high double-digit revenue growth in the server sector this year, with the ambition to challenge triple-digit growth. These developments have led to an upward revision of the annual revenue target.

Etay Lee emphasized the current high demand for AI servers, with a majority being shipped as units or racks. These include high quality networking, high efficiency storage, and High Performance Computing (HPC) integration. The increased components in AI server systems has led to a boost in revenue and gross profit; however, there is a slight decrease in the gross profit margin.

Regarding the expanded chip ban controls imposed by the United States, Lee clarified that GIGABYTE’s AI server products have a limited presence in the Chinese market, thereby minimizing the impact of these restrictions. Furthermore, in regions such as the Middle East and Vietnam where approvals are required, the company will also submit applications, and the overall impact is minimal.

In terms of graphics cards, GIGABYTE reported that inventory adjustments are completed, and channels have returned to normal levels. This, coupled with competitive pricing for the company’s main products, the 4060Ti and 4070, has generated strong demand starting from late in the third quarter. Notably, the European and American regions have witnessed a resurgence in growth, with demand surpassing that of the Asia-Pacific region.


[News] Western Digital’s Impressive Results Raise Hopes for Memory Market Revival

On October 30th, major memory manufacturer Western Digital unveiled its financial results for the first quarter of 2024. During this quarter, the company achieved revenue of $2.75 billion, marking a 3% increase compared to the previous quarter but a 26% decrease compared to the same period last year.

The Potential for Sustained Growth in the Cloud Market

Taking a closer look at end-market dynamics in this quarter, flash memory prices continued to decline, but a surge in product shipments drove quarterly growth in specific business segments.

Western Digital’s cloud business revenue was $872 million, accounting for 32% of total revenue, with a 12% quarterly decrease and a significant 52% annual drop. On client revenue, revenue reached $1.147 billion, comprising 42% of total revenue, showing an 11% quarterly growth but a 7% annual decrease. Consumer revenue stood at $731 million, constituting 26% of total revenue, with a 14% quarterly increase and an 8% annual increase.

Looking forward, Western Digital expects its Q2F24 to range from $2.85 billion to $3.05 billion.

Western Digital’s CEO, David Goeckeler, credited the Q1F24 to the team’s dedication. He said, “Our ability to develop differentiated and innovative products across a broad range of end markets has resulted in sequential margin improvement across both flash and HDD businesses.”

Goeckeler also noted that consumer and client markets continue to perform well, and the cloud market is expected to sustain growth. As market conditions improve, Western Digital’s refined cost structure empowers the company to leverage enhanced profitability.

Data from TrendForce, as of September 12th, places Western Digital fourth in the global NAND Flash market for Q2 2023, with a market share of 14.7%. This positions the company closely behind industry giants like Samsung Electronics, Kioxia, and SK Group.

Regarding the merger with Kioxia, media reports suggest that Western Digital, following stalled negotiations, plans to divest its flash memory business, accompanied by a new round of financing to address part of its debt. This strategic separation allows the company to maintain its traditional hard drive business and create two distinct publicly traded entities.

Goeckeler also explained, “However, given current constraints, it has become clearer to the board in recent weeks that delivering a stand-alone separation is the right next step in the evolution of Western Digital.”

Is the Storage Industry Poised for a Revival?

The storage industry has been facing a period of stagnation due to economic challenges and sluggish demand in the consumer electronics sector. Major players in the storage market, including Western Digital, Micron, Samsung, and Kioxia, have been compelled to reduce production and investments to address the issue of oversupply.

However, recent reports indicate that memory chip prices are set to experience a significant upturn in the fourth quarter of the challenging year 2023. Experts suggest that the industry is gradually moving towards a phase of growth.

In terms of pricing, TrendForce forecasts a general price increase in both DRAM and NAND Flash products, starting in the Q4. For DRAM, a seasonal price increase of approximately 3-8% is expected. The sustainability of this upward trend will depend on suppliers’ commitment to production reduction strategies and the extent of demand recovery, particularly in the general server domain.

As for NAND Flash, TrendForce anticipates a comprehensive price increase of around 8-13% in the fourth quarter. Looking forward to 2024, the continuation of this upward trend for NAND Flash may face challenges unless original manufacturers maintain production reduction strategies and demand for Enterprise SSDs in the server domain experiences a revival.
(Image: Western Digital)


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