Data center cooling can be made more sustainable with Maruwa, a Japanese company that specializes in ceramic material technology.

Data centre cooling is a crucial and widely debated topic in the tech industry. It is well-known that data centres consume a significant amount of electricity globally. It is estimated that the data centre industry consumes around 1-1.5% of the world's electricity, a figure that is likely to increase as cloud services, edge computing, IoT, AI, and other digital transformation technologies become more pervasive. While technology efficiency has improved over the years, it is not enough to offset the growing demand for computing and storage necessary to fulfil the needs of consumers and businesses. The high expenses associated with cooling infrastructure are one of the reasons why businesses are moving away from on-premises data centres and opting for colocation. There may be an alternative option.

Featured recently in the Financial Times, Maruwa, a distinguished Japanese enterprise with over two centuries dedicated to ceramic art and fine porcelain tableware, has dramatically transformed its business model. One of its divisions produces ceramics for circuit boards and semiconductors and has a forte in materials used for heat dissipation in electronics operating at very high temperatures — the kind of temperatures prevalent in AI server farms and in the critically important inverter power modules of electric vehicles.

It is now benefiting from the rise of generative AI, the increasing use of electric vehicles, and the technology industry's growing battle against heat. According to analysts, Maruwa has a dominant 60% share in the global market for heat dissipation substrates that are essential for optical transceivers.

A leading example of a company and business model transformation, Maruwa has successfully transferred its traditional craftsmanship to the latest ceramic components. MARUWA originated from a family of ceramic artists in the Edo period. But in the 1960’s, it shifted to manufacturing speciality ceramics for communication equipment and chip resistors.

Shares of Maruwa, which dominates globally in a range of specialist ceramics, have almost doubled over the past year. Previously not on the radar of securities analysts, the Aichi-based company, now has a market capitalisation of US$2.75b.