CITIC SEC: CDU technology path evolution, electronic shielding pump ushers in historic replacement turning point.

CITIC SEC released a research report stating that the continuous improvement of AI computing power density has accelerated the large-scale application of liquid cooling technology. In the liquid cooling system industry chain, it is recommended to focus on the CDU pump segment that has high value, deep certification barriers, and relatively limited compliance supply at the current stage. As the overseas supply chain access mechanism is relaxed and the technology roadmap evolves towards zero leakage shield pump direction, domestic leading companies with system-level collaborative R&D capabilities and pre-validation advantages are expected to benefit first. It is recommended to focus on two main industry expansion lines: first, target high-end substitutes and rapidly advance customer verification based on shield pump for chemical use; second, target cross-domain application capabilities and broad customer base based on automotive-grade electronic pump platform. Key points of CITIC SEC are as follows: CDU liquid cooling pump: the core driving equipment of liquid cooling system, with high added value and high technical barriers As the fluid distribution hub of the liquid cooling system, the CDU (Coolant Distribution Unit) is located between the facility cold source and the server cooling loop, coordinating functions such as heat exchange, fluid circulation, and temperature and pressure control. In the CDU system architecture including heat exchangers, liquid tanks, valve groups, and sensors, the circulation pump is the key equipment that provides continuous fluid circulation power, directly determining the system's flow rate, head, operating power consumption, loop stability, and redundancy capability. According to our analysis of the Bill of Materials (BOM) structure, the liquid cooling pump accounts for 20% to 30% of the total CDU cost, making it one of the core components with high added value. Therefore, the CDU liquid cooling pump is not a basic auxiliary accessory, but a high-value core fluid driving device that ensures stable liquid supply and heat conduction in the system. Procurement access mechanism adjustment and technological iteration synchronization accelerate the entry of shielded liquid cooling pumps into the replacement stage Overseas liquid cooling pumps mainly used traditional mechanical pump solutions from foreign brands due to a relatively closed early supplier system. However, the mechanical shaft seal structure is prone to wear and fluid leakage under high load conditions of 7x24 hours operation in AI data centers, making it difficult to meet high-service level agreements and low OPEX requirements simultaneously. Major cloud service providers had introduced magnetic pumps to solve leakage issues, but faced challenges of high procurement costs and limited capacity in practical applications. Currently, with the gradual relaxation of end customer procurement access mechanisms, domestic shielded pumps eliminate leakage risks with overall static sealing technology, achieve high uptime with no faults, and provide better Total Cost of Ownership (TCO), showing comprehensive advantages in technical indicators and economics. This has become the main direction for overseas liquid cooling pump technology upgrades. Significantly raising the entry threshold for liquid cooling pump segment through system collaboration and long-term verification Liquid cooling pumps are not basic general hardware manufacturing processes; they not only need to meet requirements for high heat transfer, low noise, and absolute sealing within the limited space of the CDU, but also need to deeply collaborate with the overall machine heat response and control algorithms. Taking into account the core demand of end customers for equipment to operate stably in complex conditions over the long term, the certification mentioned in the industry white paper "Liquid-Cooling CDU Pump Market-Global Industry Analysis, Size, Share, Growth, Trends and Forecast" (Dataintelo) for this segment requires strict testing over three quarters and a complete commercial introduction cycle lasting between 1.5 and 3 years. Despite the large number of global general pump companies, their businesses are mainly focused on general industrial or construction water-related fields, and their existing technical systems are difficult to directly meet the rigorous standards of data center liquid cooling scenarios. Companies in the industry with cross-domain R&D capabilities, experience in customized development for big customers, and long-term test data support are relatively limited. Risk factors: - Penetration of liquid cooling is slower than expected - Overseas customer expansion is slower than expected - Significant increase in raw material prices - AI data center infrastructure development is slower than expected - Technological changes or increased competition risks.