Fuji Electric targets data centre cooling market with server system

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Fuji Electric data centre cooling

Highlights

Fuji Electric targets over 10 billion yen ($61 million) in sales of its proprietary ejector data centre cooling system by 2030, leveraging CO2 refrigerant technology.
Cooling represents 30 to 40 per cent of data centre energy use, giving Fuji Electric and other Japanese firms an opening in the expanding AI infrastructure market.
Fuji Electric shares have climbed almost 47 per cent over the past year to a $13.9 billion valuation, amid increased investor focus on its AI infrastructure business.

Technology shift and commercial targets

As reported by Financial Times, Fuji Electric, which makes 80 per cent of Japan’s vending machines, is developing a data centre cooling system based on refrigeration technology first created to chill drinks more efficiently. The company says the system uses an ejector with a CO2 refrigerant, removing the need for a compressor and lowering electricity use in server cooling.

The technology stems from energy-saving work that followed the Fukushima nuclear disaster in 2011, when vending machines became a symbol of excess power use during Japan’s electricity crunch. Fuji Electric and Denso responded by developing a new cooling approach, and in 2015 researchers created an ejector system that, according to the company, saved 20 per cent of energy.

Hideto Shirai, who leads Fuji Electric’s efforts to sell the technology to data centres, says extending conventional cooling technology would not have been sufficient. The system was not adopted in vending machines because installation costs were too high for machines priced at only a few thousand dollars, pushing the company to seek industrial applications with higher value.

Fuji Electric is aiming to sell more than 10 billion yen, or $61 million, of ejector systems to data centres by 2030. The Tokyo-based electrical equipment supplier already generates about 100 billion yen a year from data centre-related components such as switchgears.

AI infrastructure opportunity and market hurdles

Cooling accounts for 30 to 40 per cent of data centres’ energy consumption, creating an opening for Japanese groups with expertise in refrigeration and air conditioning. Fuji Electric joins companies such as Panasonic, Mitsubishi Electric and Sumitomo Electric in trying to expand their role in AI-related infrastructure.

The company’s cooling system could be used in direct liquid cooling, a segment gaining ground over traditional systems that use water and glycol or hydrofluoroolefin refrigerants. Fuji Electric’s ejector technology is also seen as performing better in hot climates, which may support adoption in parts of Japan where summer temperatures often exceed 35 degrees and in south-east Asia.

Still, analysts see commercial risks. Alex Cordovil, research director at Dell’Oro, describes the technology as promising but still genuinely emerging, while noting that absorption chillers made by Kawasaki, Ebara and Yazaki may currently hold an advantage for data centre adoption.

Ryo Harada, an analyst at Goldman Sachs, questions whether Fuji Electric will be able to break into the large U.S. data centre market. He says hyperscalers have largely locked in next-generation data centre architectures for the next two to three years, which may delay meaningful traction for new entrants.

Investor interest in Fuji Electric’s position as an AI infrastructure supplier has been growing. Its shares have risen almost 47 per cent over the past year, and the company is valued at $13.9 billion.

Our earlier coverage of the September U.S. jobs report highlighted that hiring remained subdued overall, with healthcare and data center-related construction among the few areas still adding jobs. We noted that employment gains were concentrated in nonresidential specialty trade contractors tied to data center builds, even as government and white-collar categories weakened—showing how the data center boom is influencing labor demand despite broader cooling.

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