It's not easy being green when you're in the data center business. But Charles Liang, chief executive of Super Micro Computer — a data center specialist playing a key role in the artificial intelligence frenzy — wants to help in the fight against climate change.
Liang said his company, better known as Supermicro, can help its cloud-computing customers reduce the carbon footprint of their data centers. After all, those giant, windowless buildings that house computer systems running websites, cloud services and nascent AI applications use massive amounts of electricity.
Supermicro is promoting liquid-cooled computer systems instead of traditional air-cooled systems to save customers money on their energy bills. And by using less power, those systems are better for the environment.
"Before, people did not pay much attention to liquid cooling and green computing," Liang, who is also the company's founder, told Investor's Business Daily. "But recently, because AI demand is so strong, lots of customers have started to suffer the problem of power shortage."
Liquid cooling, he added, "can help them save up to 40% of energy power."
No Premium Price For Liquid Cooling
Supermicro is even taking a short-term profit hit to advance liquid-cooled data centers.
The San Jose, Calif.-based company late Tuesday missed earnings estimates for its fiscal fourth quarter ended June 30 as it held down pricing for direct liquid cooling (DLC) server systems. Supermicro also guided below views for earnings in the current quarter ending Sept. 30.
SMCI stock tumbled 20.1% to 492.70 the day after the earnings news.
Rosenblatt Securities analyst Hans Mosesmann reiterated his buy rating on SMCI stock after the report. He set a price target of 1,300.
"Supermicro is strategically leveraging the increasing popularity of liquid cooling ahead of (Nvidia's) H100/200 and the Blackwell transition to benefit from DLC-class solutions," Mosesmann said in a client note. "The rub for some investors is that the management will not sell DLC at premium prices as they believe in (the) strategic opportunity in secular hyperscale engagement."
Head Start Over Dell Technologies
Supermicro has a significant lead over rival Dell Technologies in making liquid-cooled data centers, investment bank Barclays said in a recent report. Dell likely won't reach large volume shipments of DLC racks until year-end 2024 or even 2025, Barclays analysts said.
The company also has advantages in its ability to deploy liquid-cooled systems more quickly than competitors, Barclays said. Plus, Supermicro has the ability to convert air-cooled data centers into liquid-cooled facilities, Liang said.
"We have not officially announced and promoted that yet, but we have that capability and are ready with some successful stories in that area," he told IBD. "We are trying to grow the business by having customers convert their data centers to liquid cooling."
Super Micro Computer started ramping its production of liquid-cooled systems this year.
"In the next few months, 40% of the data centers we build for customers will be liquid cooled — at least," Liang said.
Super Micro Computer Is Engineering Company
Supermicro's liquid-cooled systems cost as much as air-cooled systems now, he said.
"Customers spend zero dollar extra for liquid cooling and then every month they save money from energy costs," Liang said. "It will be a big bonus for customers to go for liquid cooling."
Supermicro's systems can support both room-temperature water and chilled water, he said. The systems are so efficient at transferring heat from data center processors that the water exits the system "not that hot, still touchable," Liang said.
Super Micro Computer is headquartered in Silicon Valley to be close to leading technology partners including Nvidia, AMD, Intel and Broadcom, he said. More than half of Supermicro's employees are engineers. This enables them to work with chipmakers to optimize systems for data center operators, Liang said.
Supermicro's sales have surged amid the AI infrastructure spending wave. More than 50% of Supermicro's business comes from AI systems now, Liang said.
Super Micro Computer: A CEO's Passion For Trees
When Liang isn't promoting green computing, he focuses on helping the environment by planting trees.
"That's my personal passion," he said.
In the past 15 years, Liang and his family have planted about 1,000 oak trees in Silicon Valley. He also funds a project called the Green Earth Foundation to plant drought-resistant trees in the Sahara Desert.
As part of the United Nations' Great Green Wall Initiative, the group is targeting planting 10 million trees this year in Africa and 50 million trees next year.
"It's my way to give back to our one and only Mother Earth," Liang said at the Computex trade show on June 4.
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