Thermal Management Direct-to-Chip or Immersion: How China Is Cooling the AI Boom

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What is a “bottleneck” for data center operators is a gold mine for suppliers. The lists of newly minted millionaires and billionaires in Asia are growing rapidly. Among the new entrants are founders of companies like Envicool in Shenzhen, which provide cooling solutions for AI chips.

A single Nvidia Blackwell B200 processor consumes more than 1,000 watts, according to a February 2026 report in the Hong Kong newspaper South China Morning Post. Dozens of them, packed tightly into a single server rack, generate a great deal of waste heat. Air cooling quickly reaches its limits in such situations.

At “Data Center World Asia,” held September 29–30 in Singapore, the leading manufacturers of cooling systems for AI data centers showcased their latest products. The event provided a great opportunity to see which companies are on the rise in the industry and which technical trends in cooling are currently gaining momentum.

Chinese cooling specialists such as Envicool, Midea, Shenling, Sugon Data Energy, and Goaland were in attendance at the Marina Bay Sands Hotel, as were industry suppliers, including Sanhua, Kehua Data, and Lansi Technology. Among their international competitors, Vertiv and Delta Electronics were present. Potential customers included Chinese technology companies such as Alibaba and Tencent, as well as Google, Intel, and Nvidia.

It Won't Work without Cooling

The U.S. government in Washington may be waging a chip and technology war against China to hinder its economic rise, but American hyperscalers cannot build their data centers without Chinese suppliers. This is particularly evident when it comes to cooling.

According to media reports, Envicool, a Chinese precision cooling and temperature management specialist based in Shenzhen that supplies cooling systems for data centers, also welcomed a delegation from Google Taiwan to its headquarters earlier this year. Neither company was willing to comment publicly on the meeting afterward.

The two main technological approaches that China’s cooling experts are currently pursuing are “direct-to-chip” cooling and immersion cooling. Envicool, whose stock price rose 255 percent last year before falling slightly at times this year, focuses on the most widely used direct-to-chip cooling. The Shenzhen-based up-and-comer showcased its latest-generation “Cooling Distribution Units” (CDUs). According to a report by the Reuters news agency earlier this year, Envicool has reportedly already built a version of this critical component of cooling systems—which controls the distribution of coolant to specific server racks—that meets the specifications for Google’s servers.

Envicool is expanding its production facilities in the southern Chinese province of Guangdong, in Thailand, and in the United States. The Chinese manufacturer is thus becoming a strong competitor to Taiwanese companies such as Foxconn, Auras, and Delta Asia in this market.

Cooling Considered from the Very Beginning

Midea Building Technologies, a division of the Chinese Midea Group, unveiled an architectural concept in Singapore that integrates power supply, energy storage, and cooling right from the planning stage of a data center. Midea’s offerings range from individual components to complete systems that handle multiple cooling tasks.

A particularly large number of innovations are in the field of cooling system infrastructure, such as the cooling plate on the chip, which supplies and distributes the coolant. At the event in Singapore, Midea showcased its “Magnetic CDU,” which is said to enable particularly effective distribution of coolant within the cooling plates for chips. This solution combines a cooling source with magnetic bearing technology and fluid distribution into a single unit. Compared to a separate chiller and a passive CDU, the manufacturer promises that this saves up to 70 percent of the installation space. For data center planners, this is a concrete way to reduce the space required for cooling technology.

Sanhua Intelligent Controls, a Chinese manufacturer of heating, air conditioning, and thermal management components based in Shenzhen, southern China, was represented with a booth at the event; the company is currently expanding its presence in the liquid cooling market. “We are actively expanding our business with liquid-cooled servers and continuing to foster relevant partnerships,” explained a spokesperson for Sanhua Intelligent Controls on an investor platform. In particular, he highlighted the thermal management components for liquid cooling that his company produces.

Power system manufacturer Kehua Data and electronics manufacturer Lansi Technology also announced plans this year to expand their cooling technology production. Both are examples of suppliers that grew large in other industries but have now recognized the business opportunity presented by data centers and are making a major push into the market. Kehua Data is a Chinese manufacturer of power supply systems and cloud infrastructure services that is currently expanding rapidly in the field of data center cooling.

Lansi Technology, or “Lansi Keji”—also known outside China as “Lens Technology”—is a manufacturer of precision components for consumer electronics founded by entrepreneur Zhou Qunfei. When Lens Technology became an Apple supplier, it made Zhou Qunfei a billionaire. It’s unimaginable that she would let an opportunity like data center cooling slip away.