"Exploring Business Opportunities in Direct Liquid Cooling (DLC) Coolants"
Leveraging 60% Market Share in Coolants, Advanced R&D in Liquid-Cooled Solutions

KD Finechem: A Leader in Fine Chemicals Since 1973

Founded in 1973, KD Finechem specializes in producing fine chemical products for automotive and industrial applications. In alignment with the global shift toward sustainability, the company is developing environmentally friendly coolants, with a primary focus on the automotive industry.

Recently, KD Finechem has ventured into a new business area: data center liquid cooling (DLC). The company is exploring the commercialization potential of glycol-based coolants for Direct Liquid Cooling applications. Hyunjin Park, CEO of KD Finechem, shared insights into the company’s participation in the DCWA 2024 event in Singapore and its future plans.

KD Finechem Company Overview

KD Finechem is a Tier 1 supplier to major automakers such as Hyundai Motors, GM Korea, Renault Korea, and KG Mobility, specializing in products like antifreeze, brake fluid, and washer fluid. The company also serves prominent clients in the energy storage system (ESS) and battery industries, including Samsung SDI, LG Energy Solution, and SK heavy industry clients like HD Hyundai Heavy Industries, Doosan Bobcat, HD Hyundai Infracore, Hanwha Ocean, and Samsung Heavy Industries; and oil refining companies such as Hyundai Oilbank and S-Oil.

The company holds approximately 60% market share in South Korea, with product segment-specific shares of 55% for antifreeze/coolant, 95% for brake fluids, and 80% for windshield washer fluids.

On the technology front, KD Finechem has pioneered long-life antifreeze manufacturing technology, extending the operating life of coolant in internal combustion engines to reduce waste and resource usage. The company has also developed advanced solutions contributing to the expansion of eco-friendly vehicles such as:

•Fuel Cell Coolant Technology: Specialized coolants for hydrogen fuel cell vehicles, which are often considered the ultimate eco-friendly automobiles.

•Battery Coolants for EV Safety: Manufacturing low-conductivity, corrosion-resistant coolants for battery systems, a pivotal component of thermal management in electric vehicles (EVs).

Key Technological Milestones

1. Antifreeze:

In collaboration with KAIST, the most prestigious engineering institution in Korea, in 1987, KD Finechem developed South Korea’s first domestic antifreeze technology. Being a pioneer in the industry, KD Finechem became the very first company to supply a long-life antifreeze capable of lasting up to 200,000 km over 10 years.

2. Fuel Cell Coolant:

KD Finechem developed and commercialized the world’s first coolant, exclusively supplying it for the world's first mass-production hydrogen fuel cell vehicle, the Tucson IX. This technology was designated as “National Core Technology” in the hydrogen fuel cell sector by the Ministry of Trade, Industry, and Energy in 2019.

3. EV Battery Coolant:

In 2018, KD Finechem became the first South Korean company to develop specialized coolants for EV battery systems, incorporating low-conductivity corrosion inhibitors. KD products are currently supplied to all EVs produced by Hyundai Motors.

4. ESS Coolant:

KD Finechem supplies products designed to enhance the thermal and electrical safety of battery systems with low conductivity. Developed through joint R&D with LG Energy Solution and Samsung SDI, the ESS-specific coolant was successfully applied to LG Energy Solution's Home ESS Enblock, which earned UL certification.

With these innovations, KD Finechem continues to pave the way in eco-friendly coolant solutions, contributing to the advancement of green automotive and energy technologies.

Background of KD Finechem's Participation in DCWA

KD Finechem has maintained a strong interest in liquid cooling technologies, including Direct Liquid Cooling (DLC) for computers and servers, 

and has been closely monitoring the market.

In recent years, immersion cooling has been perceived as the next-generation cooling method, dominated by hydrocarbon-based insulating oils and fluorocarbon-based fluids (e.g., 3M Engineered Fluids). 

However, concerns about the risks associated with fluorocarbon fluids have risen. At NVIDIA’s GTC 2024 event in April, server systems utilizing DLC were introduced, highlighting the potential for KD Finechem’s water-soluble glycol-water type coolants to enter the market.

Recognizing this opportunity, KD Finechem attended the exhibition to introduce its coolant to companies providing DLC solutions.

Key Objectives for Participation

During the exhibition, KD Finechem explored four main areas:

1. Exploring New Business Opportunities in the Data Center Industry:

DCWA served as a valuable platform to gain insights into the latest data center industry trends and technologies. With numerous new products, innovations, and solutions showcased, the event helped KD Finechem fully comprehend the overall market dynamics and refine its product development strategy. Notably, this was the first data center-related exhibition following NVIDIA’s GTC announcement about DLC, making it a prime opportunity to promote KD Finechem’s coolant solutions and identify potential customers.

2. Assessing Market Size and Growth Potential:

The company sought to determine the number of DLC companies and evaluate the long-term scalability of the market.

3. Building Networks with Data Center Cooling Solution Providers:

Having primarily collaborated with automakers and machinery companies, KD Finechem aimed to establish connections with domestic and international data center cooling solution companies. This was part of the company’s strategy to break into the data center industry, develop new markets, secure new clients, and more importantly, strengthen the network within the industry.

4. Understanding Customer Needs:

KD Finechem placed a high priority on understanding the demands of potential customers. This included gathering feedback on material preferences, operating conditions, and key considerations for DLC solutions. Engaging directly with end-users and stakeholders allowed the company to gain valuable insights into practical experiences and ideas, which are especially crucial for a research-driven manufacturing firm like KD Finechem.

Through its participation in DCWA, KD Finechem aimed to establish itself as a prominent and competitive leader in the emerging DLC market, leveraging its expertise in eco-friendly and advanced chemical solutions.

Global Trends Observed at DCWA

The exhibition provided valuable insights into trends in cooling solutions, with a focus on immersion cooling, DLC solutions, and related components. 

While HVAC systems had traditionally dominated the data center cooling solution market, the exhibition revealed growing adoption of DLC solutions. Global leaders such as Supermicro have actively embraced DLC systems for more efficient management of the heat generated by high-performance server processors.

Despite the growing interest in DLC, discussions with various companies revealed that actual commercial applications in operational data centers remain limited. Many products appeared to have been rushed to market to align with emerging trends, especially following NVIDIA and Supermicro's launch of DLC-applied products.

DLC systems exhibited at the event heavily featured stainless steel (SUS) components, likely to ensure initial stability by using materials resistant to corrosion.

In immersion cooling, both established and new companies participated. It was evident that efficient and high-performance cooling systems are becoming increasingly critical in data centers. However, the technology appeared to be in its early stages, requiring time to address challenges such as chip warranties, PFAS toxicity, and environmental issues before full-scale implementation.

In South Korea’s domestic market, it remains uncertain whether immersion cooling or DLC will dominate the market. Both solutions have unique advantages, but DLC is anticipated to gain greater momentum in the near future, driven by its ability to scale and immediate practical applicability.

Post-Participation Outcomes and Future Business Plans

One of the most significant achievements of participating in the delegation was strengthening networks with industry experts. By engaging with various professionals within the delegation, KD Finechem gained invaluable insights into the current state and market dynamics of domestic data center companies. Discussions underlined how chemical products, rather than mechanical solutions, could benefit existing businesses, emphasizing the company’s unique value proposition.

Additionally, a tour of the Sustainable Tropical Data Center Testbed (STDCT) at the National University of Singapore (NUS) provided an opportunity to observe DLC and immersion cooling systems in operational servers and to hear firsthand feedback from operators. Visits to companies like the Danfoss Training Center, specializing in cooling solution components, further helped KD Finechem catch up to the latest technological trends.

KD Finechem is committed to focusing its research and development on customized coolant solutions. Key initiatives include:

•Improving Thermal Efficiency:

Developing coolants with enhanced thermal conductivity to maximize cooling efficiency in extreme-temperature environments such as data centers. This R&D effort aims to not only reduce energy consumption but also provide cooling solutions capable of achieving lower PUE (Power Usage Effectiveness).

•Developing Corrosion-Resistant Additives:

Creating additives that maintain low conductivity while providing superior corrosion protection. These innovations will enhance system durability, reduce maintenance costs, and, more importantly, help stabilize PUE by preventing long-term declines in thermal efficiency.

KD Finechem also prioritizes providing tailored solutions to meet diverse customer needs. The company plans to develop customized coolants optimized for cooling systems in various industries, such as data centers and electronic equipment. It will design cooling systems tailored to specific environments and conduct rigorous performance testing to ensure optimal outcomes through continuous R&D.

For more information, please visit the link below.