China Galaxy Securities released a research report stating that the domestic thermal management materials industry has formed a clustering effect in areas such as Thermal Interface Materials (TIM), ceramic substrates, and liquid cooling materials, with substantial room remaining for import substitution. Currently, Vapor Chambers (VC) and graphite films, owing to their superior thermal conductivity, have become the mainstream cooling solutions for AI smartphones. Diamond alloy materials are expected to see widespread adoption in high-power AI chip cooling. Thermoelectric cooling enables precise local temperature control, while liquid metals offer high thermal conductivity and a wide operating temperature range. Key viewpoints from China Galaxy Securities are as follows:

The domestic thermal management materials industry is concentrated in TIM, ceramic substrates, and liquid cooling materials, presenting significant substitution potential. The industrial chain comprises upstream raw materials, midstream component manufacturing, and downstream applications, characterized by high barriers upstream, high value midstream, and strong demand pull downstream. Upstream raw materials primarily include high-purity ceramic powders (AlN/BN/SiC/diamond), carbon-based materials (graphene/CNT/graphite), metal raw materials (copper/aluminum/copper alloys/tantalum), and liquid cooling mediums (fluorinated fluids/synthetic esters/water-based fluids). Midstream manufacturing of thermal management components mainly involves Thermal Interface Materials (TIM), structural cooling parts, and core liquid cooling components. This midstream segment holds the highest value and is intensely competitive. Downstream consists mainly of end applications.

First-tier thermal management material companies are concentrated in Europe, the US, and Japan, such as 3M and Henkel from Europe/US, and Shin-Etsu Chemical and Kyocera from Japan. Second-tier companies include China Resources Microelectronics, Feilo Acoustics, Zhongci Electronic, Sanhuan Group, and Tianyue Advanced. Their primary business focuses on the three segments of Thermal Interface Materials (TIM), ceramic substrates, and liquid cooling materials, indicating considerable potential for domestic substitution.

Vapor Chambers and graphite films have become the preferred cooling solutions for AI smartphones. Vapor Chambers, leveraging liquid-phase change for efficient heat conduction, are essential for high-performance models. Graphite film cooling serves as a basic, cost-effective solution suitable for mid-range devices. Compared to traditional solid conduction methods, Vapor Chambers can transfer heat more rapidly to larger cooling areas like the device's mid-frame and backplate, increasing the effective cooling area by 5 to 8 times. According to data, the thermal conductivity of Vapor Chambers is approximately 0.2-50 kW/m·K, heat pipes range from 10-100 kW/m·K, and liquid cooling plates are around 1-5 kW/m·K. A-share listed companies primarily involved in Vapor Chambers include Suzhou Tianmai, Jingyan Technology, Jiebon Technology (which acquired Sainuo Gaode to enter the VC market), and Speedy Tech.

Diamond alloy is anticipated to be promoted for cooling high-power AI chips. As the global semiconductor industry enters the 2nm process era, chip power density and heat generation intensity are rising simultaneously. When thermal conductivity requirements exceed 500 W/m·K, diamond emerges as an excellent alternative to traditional silicon-based heat sink materials. CVD polycrystalline diamond is an ideal cooling solution for the high-computing-power AI era. Nvidia's Vera Rubin architecture GPUs will fully adopt a new solution combining "diamond-copper composite cooling + 45°C warm water direct liquid cooling." Diamond boasts a thermal conductivity of 2000-2200 W/(m·K), while copper's is about 380-400 W/(m·K). Their combination creates an alloy with thermal conductivity as high as 950 W/(m·K). China produces over 90% of the world's diamond monocrystals, with Henan province accounting for 80% of the domestic output. Companies like Zhongnan Diamond (a subsidiary of China Ordnance Industries Group Red Arrow Co., Ltd.), Huanghe Whirlwind, Zhengzhou Huajing, and Power Diamond hold nearly 70% of the national market share. The global diamond heat sink market size is projected to reach 17.2 to 48.3 billion yuan by 2028, potentially benefiting related companies.

Thermoelectric cooling enables precise local temperature control, while liquid metals possess high thermal conductivity and a wide temperature range. The core advantages of thermoelectric cooling are the absence of moving parts, precise temperature control, millisecond-level response, and bidirectional cooling/heating, leading to rapid adoption in scenarios requiring精密 temperature control such as AI optical modules, medical devices, lasers, and automotive applications. Liquid metal cooling, utilizing gallium-based/indium-based/bismuth-based alloys as the core medium, has become a key solution for high power density cooling in AI servers, high-end consumer electronics, and new energy vehicles. This is due to its thermal conductivity of 15–73 W/(m·K) (5–10 times higher than traditional thermal grease) and its wide operating temperature range.

Risk factors include potential shortfalls in demand for high-end chips and their mass production, risks associated with accounts receivable collection, and uncertainties regarding the pace of AI development.