It’s not easy being green when you’re in the data center business. But Charles Liang, CEO of Supermicrocomputer (SMCI) — a data center specialist playing a key role in the madness of artificial intelligence — wants to help in the fight against climate change.
↑
X
How Nvidia is injecting AI into healthcare
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 that run websites, cloud services and emerging AI applications consume vast amounts of electricity.
Supermicro is promoting liquid-cooled computer systems over traditional air-cooled systems to save customers money on their energy bills. And by using less power, these systems are better for the environment.
“In the past, people didn’t 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 the demand for AI is so strong, many customers have started to face the problem of power shortages.”
Liquid cooling, he added, “can help them save up to 40% energy.”
No premium price for liquid cooling
Supermicro even suffers a short-term profit decline to develop liquid-cooled data centers.
The San Jose, California-based company missed earnings estimates Tuesday night for its fiscal fourth quarter ending June 30, as it kept prices low for direct liquid cooling (DLC) server systems. Supermicro also issued the following outlook for earnings in the current quarter ending Sept. 30.
SMCI shares fell 20.1% to 492.70 the day after the earnings news.
Rosenblatt Securities analyst Hans Mosesmann reiterated his buy recommendation on SMCI shares following the report, setting a price target of 1,300.
“Supermicro is strategically leveraging the increasing popularity of liquid cooling ahead of (Nvidia“(NVDA)) H100/200 and the Blackwell transition to take advantage of DLC-class solutions,” Mosesmann said in a client note. “The problem for some investors is that management will not sell DLC at a premium because they believe in (the) strategic opportunity in secular hyperscale engagement.”
Ahead of Dell Technologies
Supermicro has a significant lead over rival Dell Technologies (DELL) in making liquid-cooled data centers, investment bank Barclays said in a recent report. Dell likely won’t ship large volumes of DLC racks until late 2024 or even 2025, Barclays analysts said.
The company also has advantages in its ability to deploy liquid-cooled systems faster than competitors, Barclays said. In addition, Supermicro has the ability to convert air-cooled data centers to liquid-cooled facilities, Liang said.
“We haven’t officially announced and promoted that yet, but we have that capability and are poised with a number of success stories in that space,” he told IBD. “We’re trying to grow the business by enabling customers to convert their data centers to liquid cooling.”
Super Micro Computer has begun ramping up production of liquid-cooled systems this year.
“In the coming months, at least 40 percent of the data centers we build for customers will be liquid cooled,” Liang said.
Super Micro Computer is an engineering company
According to him, Supermicro’s liquid-cooled systems now cost the same as its air-cooled systems.
“Customers will spend zero dollars extra on liquid cooling and then save money on energy costs every month,” Liang said. “It will be a great advantage for customers to choose liquid cooling.”
Supermicro’s systems can handle both room-temperature and chilled water, he said. The systems are so efficient at transferring heat from data center processors that the water leaves the system “not as hot, but still touchable,” Liang said.
Super Micro Computer is headquartered in Silicon Valley, putting it close to leading technology partners including Nvidia, AMD (AMD), Intel (INTC) and Broadcom (AVGO), he said. More than half of Supermicro’s employees are engineers. This allows them to work with chipmakers to optimize systems for data center operators, Liang said.
Supermicro’s sales have been rising amid the surge in AI infrastructure spending. More than 50% of Supermicro’s business now comes from AI systems, Liang said.
Supermicrocomputer: 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.
Over 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.
As part of the United Nations Great Green Wall Initiative, the group aims to plant 10 million trees in Africa this year and 50 million trees next year.
“This is my way of giving back to our only Mother Earth,” Liang said June 4 at the Computex trade show.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Super Micro Computer misses targets, announces 10-for-1 stock split
AppLovin Beats Profit Estimate on In-Line Sales in Second Quarter
Nvidia stock, hardware partners punished by AI chip delay
Best Growth Stocks to Buy and Watch: See Updates from IBD Stock Lists
Join IBD Live for stock ideas every morning before the market opens;
