Data Center Liquid Cooling Market

Global Data Center Liquid Cooling Market Size (2024 to 2029)

The global data center liquid cooling market, which was valued at USD 2.48 billion in 2023, is poised for significant growth. It is predicted to expand at a robust CAGR of 25.2% to reach USD 9.55 billion by 2029. This forecast period is marked by increasing investments in high-density technology, high-performance computing, and smart city initiatives. These factors are driving state and local players to develop the most reliable and efficient cooling methods for their data centers.

The surge in IT investment and the incorporation of IT into all activities has resulted in the collection of massive amounts of data. Such information is stored, processed, and transported over many servers that are layered one on top of the other. Day in and day out, these systems and possible cyber threats face one major threat: heat. Every electrical gadget generates heat when powered by an alternating current (AC) or direct current (DC).

The heat generated by servers and IT systems, if left unregulated, can lead to malfunctioning, melting, or damage to the server's chipsets and components. This is where liquid cooling technology plays a crucial role. The IBM 3033 and the Cray-2 were pioneers in using liquid cooling in the 1970s. In the past decade, the focus has shifted towards creating practical industrial-grade liquid cooling systems for data center use, driven by the need to minimize energy usage. Liquid immersion systems, such as submerging servers and other components in thermally conductive but not electrically conductive liquids like mineral-based lubricants, are now in use.

Global Data Center Liquid Cooling Market Drivers:

Every commercial institution in the modern world relies on data generated from multiple sources—the storage and transfer of zillions of such data processes in the blink of an eye. Simultaneously, data centers are expanding rapidly to accumulate all the data generated every second. Such functioning of data centers consumes and exerts a lot of heat and energy. Hence, cooling facilities are needed to efficiently sustain the performance of the hardware. Cooling facilities are designed to be modified to provide adequate performance regardless of the heat generated, and growing concerns about saving the environment and energy are just a few of the factors that could fuel and drive demand for data center liquid cooling over the forecast period. The data center liquid cooling industry is expected to develop as sophisticated engineering coolants are used to provide cooling with a lower carbon footprint. Liquids are superior conductors of heat energy because they are denser than air and provide an effective cooling medium.

Global Data Center Liquid Cooling Market Restraints:

Along with electricity, liquids are both conductive and corrosive, and any breach in the data center's liquid cooling system can be disastrous for the facilities and equipment. As a result, the data center liquid cooling market faces a significant challenge.

Impact of COVID-19 on the global data center liquid cooling market:

The data center liquid cooling market was unaffected by COVID-19. During the pandemic, the worldwide lockdown raised the demand for data center services, which saw a two-fold spike in traffic. However, COVID-19 has had a detrimental influence on the supply side of this market, affecting the supply chain of the majority of sectors around the world. The impact was neutral as data center demand grew, resulting in several new deployments and capacity commissioning.

GLOBAL DATA CENTER LIQUID COOLING MARKET REPORT COVERAGE:

The global data center liquid cooling market has been segmented into the component, data centre type, solution, end-user, and region.

Global Data Center Liquid Cooling Market – By Component:

• Solutions

• Services

The solution sector dominated the data center cooling market in 2020, and it is likely to continue to do so in the coming years, owing to an increase in the number of energy-efficient cooling solutions. Liquid cooling in data centers can take several forms, including sealed plates over processors, liquid compressors to cool air, or immersion in specially engineered fluids for cooling. Major suppliers offer a variety of liquid cooling options, while niche and developing vendors offer niche and emerging liquid cooling solutions. Due to their usefulness in high-density cooling, data center liquid cooling technologies are garnering a lot of interest from large end-users.

The component sector had the highest CAGR in the data center cooling market, owing to an increase in the number of service providers for installation and deployment, support and maintenance, and consulting for data center cooling solutions. Cooling systems in data centers must be installed correctly, as leaks in the cooling system can damage equipment.

Global Data Center Liquid Cooling Market – By Data Centre Type:

• Hyperscale Centers

• Enterprise type

• Colocation Data Centers

• Others.

Hyperscale data centers dominate the industry in terms of type. This is the case since most major hyper-scale and cloud service providers have promised better energy efficiency and lower carbon emissions. These companies include Google LLC, Facebook, Microsoft, and Amazon AWS. The rising emphasis on cloud migration is another element contributing to this. More businesses worldwide are considering or have switched to cloud computing for some of their operations.

Global Data Center Liquid Cooling Market – By Solution:

• Indirect Cooling

• Direct Cooling

In the data center liquid cooling industry, indirect cooling is predicted to lead the market by solution type. This is owing to the widespread use of indirect cooling systems and their increased availability. Compared to direct cooling technologies such as immersion and direct-to-chip cooling, the indirect cooling market has a larger number of vendors and manufacturers, allowing it to take the lead.

Global Data Center Liquid Cooling Market – By End-User:

• IT and Telecom

• Banking, Financial Services, and Insurance (BFSI)

• Government and Public Sector

• Healthcare

• Manufacturing

• Retail

• Others

The IT and telecom industry leads the data center liquid cooling market by end-use industry. The major user of data centers in the telecommunications industry. Because data transmission and delivery operations require better connectivity, data centers are an important part of the ICT industry. Because communication is the most important aspect of the ICT industry's success, data centers have become indispensable. As a result, the IT and telecom industries have the biggest need for data center liquid cooling.

Global Data Center Liquid Cooling Market – By Region:

• North America

• Europe

• APAC

• LATAM

• MEA

Europe's data center liquid cooling market accounted for over 30% of revenue share in 2023, owing to the increasing expansion of data centers across the region. Because of favorable environmental characteristics such as easy availability of land, low power, accessible renewable energy, and tax advantages, data center service providers are encouraged to invest in this location. By 2029, Europe will be the main data center liquid cooling market, with a market value of USD 2.5 billion. This is due to widespread support for environmentally friendly legislation and a growing emphasis on energy efficiency across practically all industrial sectors. Aside from that, the European Union has enacted a Green Deal that lays out ambitions to make the whole data center and information and communications technology (ICT) business carbon neutral by 2030.

The data center liquid cooling market in the United States is expected to increase 17 percent annually through 2029, owing to government rules to decrease carbon footprints from high-density data centers. For example, the United States government's Federal Energy Management Program (FEMP) pushes companies and agencies to increase data center energy efficiency through its Center of Expertise (CoE). Operators are working on deploying innovative cooling solutions to preserve efficiency because cooling systems account for 30 percent to 60 percent of energy usage in data centers.

Demand for data center liquid cooling solutions from cloud service providers is predicted to expand at a CAGR of 27% in China by 2029, owing to an increase in the number of data centers built in the country due to growing government worries about the security of client data. China's Cybersecurity Law, for example, imposes data localization requirements on important data center operators to process, store, and analyze data within China's boundaries. This has prompted cloud service providers to build data centers in the country to securely handle enormous amounts of data.

Market Leader

LiquidStack is the world's largest liquid cooling provider for hyperscale, edge, and high-performance computing. It is also the pioneer of 2-phase immersion cooling and has won numerous honors for designing the world's most energy-efficient data centers.

Key Players:

1. Asetek (Denmark)

2. Rittal (Germany)

3. Stulz (Germany)

4. Vertiv (US)

5. Schneider Electric (France)

6. Alfa Laval (Sweden)

7. Fujitsu (Japan)

8. Asperitas (Netherlands)

9. Allied Control (Hong Kong)

10. DCX (Poland)

Recent Developments

• Pagani Automobili and Asetek have reached a license, marketing, and product arrangement for various of Asetek's upcoming products in the luxury racing simulator industry, according to Asetek, the global leader in liquid cooling and gaming peripherals. Through a portfolio of products now being developed by Asetek, the most dedicated sim racers, and vehicle lovers will soon be able to experience the exhilaration of driving a real Pagani, the world's most exclusive hypercar brand.

• Schneider Electric, an energy management company, is partnering with Cornerstone, a corporate responsibility and sustainability consultancy, to expand renewable energy access to ten major pharmaceutical companies. Their initiative, known as the Energize program, will assist enterprises in addressing their operational Scope 2 greenhouse gas emissions by procuring green power, lowering the participants' Scope 3 emissions.

• Alfa Laval has become the first company to join ABB's newly launched energy efficiency movement, a multi-stakeholder project to raise awareness of the benefits of energy efficiency solutions to speed up the transition to decarbonization. In March 2021, ABB, a leading global technology firm, launched the #energyefficiencymovement to encourage people to minimize their energy use, as this is the most efficient approach to reducing carbon emissions and combating climate change.

• According to Vertiv Holdings Co., a global provider of critical digital infrastructure and continuity solutions, Vertiv Holdings Ireland DAC, a private company limited by shares incorporated in Ireland, Vertiv International Holding Corporation, an Ohio corporation, and Vertiv completed their previously announced acquisition of E&I Engineering Ireland Limited, a private company limited by shares incorporated in Ireland, and its affiliate, Powerbar Gulf LLC.