AI heat sparks Taiwan’s move from air to liquid cooling

AI散熱推動臺灣從氣冷轉向液冷

TAIPEI (Taiwan News) — Taiwanese cooling suppliers are rapidly shifting from air cooling to liquid cooling as artificial intelligence servers generate higher levels of heat.

Air cooling remains the most common method in data centers and corporate server rooms. It relies on fans, heat pipes, and fins to blow air over components, according to Business Next.

However, traditional air cooling struggles to handle the kilowatt-level heat output of modern AI chips, such as Nvidia’s Grace Blackwell-series platforms. Standard air cooling typically manages up to 700 watts, while even advanced 3D vapor chamber designs face limits.

Liquid cooling can dissipate heat above 1,000 watts. Direct liquid cooling typically uses either liquid-to-air or liquid-to-liquid systems.

Liquid-to-air systems transfer heat from chips into water pipes, then release it via fans at the back of server racks. Liquid-to-liquid systems circulate coolant around the hottest components in sealed pipes.

For example, Nvidia’s GB200 series uses a liquid-to-liquid design, while H100 chips can still be effectively cooled by air in lower-density setups. According to CTEE, liquid cooling can reduce data center energy consumption by about one-third and improve space efficiency up to four times, making it increasingly popular among cloud operators.

Taiwanese suppliers are actively expanding in the sector. Asia Vital Components offers full liquid cooling modules, including cold plates, distribution units, and manifolds.

Its subsidiary Fositek has shifted to quick-connect components, with revenue from this segment now near 50%. Fositek is preparing next-generation connectors for Nvidia’s Rubin platform.

Auras Technology provides modular solutions such as cold plates and quick connectors, recently earning AMD vapor chamber certification. Liquid cooling accounts for roughly 35% of its product mix, and the company’s GB300 cold plates are driving growth, with market share projected at 25%.

Other companies are applying existing expertise to liquid cooling.

Delta Electronics’ SideCar liquid-cooled racks and coolant distribution units have seen strong shipment growth, supporting improved margins. Lite-On Technology is focusing on liquid-to-air systems, with 120kW coolant distribution unit modules scheduled for shipment in the fourth quarter.

Air cooling can still manage chips like Nvidia’s H100, said Kaori Heat Treatment Deputy General Manager Wu Chun-ying (吳俊英). However, the rollout of GB-series AI chips is expected to accelerate liquid cooling adoption.

Institutional investors project the global market for liquid cooling modules could grow at a 7% compound annual growth rate. With high-density production and fast module integration capabilities, Taiwan’s manufacturers are well positioned to play a key role in the sector.