Overseas business and planning of liquid-cooled faucets

The overseas business of the liquid cooling leader Y, in collaboration with Meta and Tianhong ,
has seen rapid development in recent years. In particular, its collaboration with international tech giant Meta has become a core engine for its growth. According to industry experts, Meta's demand in liquid cooling-related fields over the next two years is expected to reach up to $800-900 million, with pure liquid cooling full cabinets accounting for about a quarter of this demand. This part of the demand is primarily handled by Tianhong Technology, which, as Meta's integrator, has outsourced liquid cooling solutions for multiple projects to suppliers such as Y. Specifically, Tianhong Technology's own demand for full cabinets of liquid cooled switches is expected to reach RMB 3-4 billion, which constitutes an important driving force for Y's business growth. Y indirectly supplies Meta through Tianhong Technology, and although it is not the exclusive supplier, it is currently Tianhong Technology's only docking supplier. This cooperation model stems from the early docking between Y and Tianhong Technology: as early as when Tianhong Technology's demand for liquid cooled switches emerged, Y actively participated in sample making and submission, and gained Meta's recognition. In addition, Y maintains direct communication with Meta, but the actual supply process is mainly completed through integrators such as Tianhong Technology or Quanta. Because Meta itself does not engage in full cabinet integration solutions, this provides Y with a stable supply channel. The agreement covers at least a two-year period, and subsequent demand may further expand. Tianhong Technology also has cooperation with customers such as Google and Amazon, which, although not yet initiated, is expected to bring more orders from 2026 onwards, injecting new vitality into Y's overseas business. From the perspective of market size, Meta's demand is approximately $300-400 million a year, which translates to about RMB 2-3 billion. Coupled with Tianhong Technology's own demand, the total amount is set at over RMB 3 billion. Y's goal is to fully supply Tianhong Technology's switch part, but not the entire cabinet with its products. For example, in a cabinet, components such as cold plates, connectors, and manifolds may partially come from other suppliers. Despite this, Y's target share in Tianhong Technology is 200 cabinets, with a guaranteed annual supply of no less than RMB 1 billion. It is worth noting that although there are rumors online that Y is Meta's exclusive supplier, this is not accurate. At present, Y is Tianhong Technology's only docking party, but it is likely to introduce other suppliers in the future. Y's advantage lies in early intervention and product recognition, rather than simply the superiority of technical solutions. In the future, Meta will also procure through Quanta, and the liquid cooling leader Y is expected to secure a portion of the market share. However, it will be difficult for Y to achieve a 50% overall share, as Meta's demand is distributed among multiple integrators.

In this section on cooperation with NVIDIA,
there are some sensitive data. To avoid misunderstandings, we will not display them in the public domain but instead place them on the Planet. Currently, some connector products from Liquid Cooling Leader Y have been supplied to integrators such as Quanta and have entered NVIDIA's supplier list. For NVIDIA's new projects, such as manifold, NPQD (connector), and CDU, Liquid Cooling Leader Y has made preliminary progress: NPQD connectors have been supplied in small batches, and although CDU products have entered the list, they have not yet been actually supplied. In terms of competition, Liquid Cooling Leader Y's CDU products will directly compete with giants such as Vantec and Cool Master. There are many suppliers in the CDU field, and Liquid Cooling Leader Y, which previously supplied Quanta and Cool Master, now produces CDU on its own, indeed forming an upstream-downstream competitive relationship. However, Liquid Cooling Leader Y believes that there is still a significant opportunity through NVIDIA procurement or customer-specified models (such as Meta). Liquid Cooling Leader Y has established a localized team in Taiwan (including local employees) to strengthen business connections with Taiwanese OEM manufacturers. It is expected that in October, further discussions will be held on the full container solution for GB300 chips. In terms of product details, Liquid Cooling Leader Y's CDU can be provided as a complete set of equipment, with cold plates, connectors, and CDU all produced in-house. The value of different CDUs varies greatly. For example, the CDU for NVIDIA NVL72 is designed outside the cabinet, and with a one-to-eight configuration, the average price per cabinet is similar to Liquid Cooling Leader Y's pricing. We have placed the data on the Planet. For the manifold, the value of the NVL72 manifold (inside the cabinet, including piping and connectors) is approximately $7,800-8,200, and the total value including connectors is approximately $25,000. Unlike adapters, manifolds are mainly piping systems, while adapters are docking components for servers and manifolds. The cold plate products are targeted at GB300 chips, with a single unit price of $240-260, and a total value of approximately $28,000 for 108 units. It is expected that by 2026, Liquid Cooling Leader Y's market share in NVIDIA's CDU, manifold, and cold plate markets will reach over x%, which is lower than Cool Master's (over xx% market share), but the cost is slightly lower, making it possible to gradually erode the market share. In the long run, by 2027, the market share of Taiwanese manufacturers is not expected to decline rapidly. However, through continuous optimization of production control (such as achieving a high yield rate), the leading liquid cooling company Y is poised to narrow the gap. The net profit margin of Y's liquid cooling business is approximately xx%, with connectors and CDU having higher margins and cold plates having slightly lower margins.