Liquid Cooling Primer: Coolant Distribution Units (CDUs): U.S. Multi Industry & Electrical Equipment

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Liquid Cooling Primer: Coolant Distribution Units (CDUs): U.S. Multi Industry & Electrical Equipment

15 June 2026

U.S. Multi Industry & Electrical Equipment

Liquid Cooling Primer: Coolant Distribution Units (CDUs)

As rack thermal densities in data centers continue to increase, air is no longer powerful Varun Govindaraj

+1 917 344 8543 enough to handle cooling requirements. And so liquid cooling, once a fridge modality

varun.govindaraj@bernsteinsg.com relegated to only the highest-performance computing use cases, increasingly finds itself

in the mainstream. At the core of liquid cooling, two components drive the narrative (CDUs

Chad Dillard and Cold Plates). In this note, we offer perspectives on CDUs, why they are critical, how to

+1 917 344 8469

chad.dillard@bernsteinsg.com evaluate them, key players in the market and their offerings, and a longer term view on what

the future for the equipment could look like when the market eventually cools down (pun

Alasdair Leslie intended).

+44 20 7762 4952

alasdair.leslie@bernsteinsg.com We think CDUs are a great business to be in; the equipment is complex enough to not be

entirely commoditized and has a material service attach. They are mission-critical; if a CDU

Madison Rezaei fails you are looking at multiple racks burning out (which is a huge issue today when rack +1 917 344 8622

madison.rezaei@bernsteinsg.com values continue to increase). This also creates a technical moat where customers will want

reliable service; they are unlikely to go to the lowest cost provider in the market because the

Specialist Sales cost of failure far outweighs the near-term savings a cheaper service contract can deliver.

Steve Song While we have not opined on the market size of CDUs, there is clearly debate on both size +1 917 344 8401