Global Data Center Liquid Cooling Market Report By System Type (Solution, Services), By Data Center Size (Small and Medium Data Centers, Large Data Centers), By End-Use Industry (IT and Telecommunications, BFSI, Healthcare, Retail and E-Commerce, Manufacturing, Government and Defense, Other End-Use Industries), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The Global Data Center Liquid Cooling Market size is expected to be worth around USD 20.7 Billion by 2033, from USD 3.0 Billion in 2023, growing at a CAGR of 21.3% during the forecast period from 2024 to 2033.

Data center liquid cooling is a technology used to cool the servers and other equipment in data centers by circulating liquid. As data centers generate significant heat, liquid cooling is more efficient compared to traditional air cooling. It helps in reducing energy consumption and maintaining optimal temperature, ensuring the smooth operation of servers.

There are many opportunities in this space as industries like IT, telecommunications, and financial services continue to expand their data storage and processing capabilities. The rise of AI, machine learning, and big data analytics means more powerful servers, creating a growing demand for effective cooling systems. In addition, hyperscale data centers, which serve large-scale operations for companies like Google and Amazon, are increasingly adopting liquid cooling technology.

The Data Center Liquid Cooling market is poised for significant growth as data centers grapple with increasing power densities and the need for greater energy efficiency. Liquid cooling, particularly direct-to-chip and immersion cooling technologies, provides a highly efficient alternative to traditional air-based cooling systems.

These technologies are especially crucial in environments requiring high-performance computing (HPC) and artificial intelligence (AI) applications, where heat management is critical to maintaining operational efficiency. With liquid cooling offering up to 3000 times more efficient heat transfer, data centers can significantly improve performance, scalability, and energy efficiency.

Several factors are driving the adoption of liquid cooling technologies. The need for higher compute densities, especially in AI and HPC, has made traditional air cooling less effective.

Direct-to-chip cooling, for instance, can dissipate 70-75% of the heat generated by CPUs and GPUs, allowing for faster and more reliable processing. These systems can also reduce energy consumption by up to 40%, making them a cost-effective solution for data centers seeking to optimize performance while minimizing operational expenses.

Immersion cooling, which submerges hardware in non-conductive liquids, reduces both energy use and carbon emissions by as much as 50%. This makes liquid cooling an attractive option for companies looking to meet sustainability targets and manage high-power densities, particularly in cloud and hyperscale data centers.

Government investment and regulations are accelerating the adoption of liquid cooling technologies. In the United States, the Department of Energy has allocated $40 million to promote energy-efficient cooling solutions for data centers, which currently consume about 2% of the country’s total electricity.

In the European Union, regulations aim to reduce the carbon footprint of data centers, with goals such as achieving an average power usage effectiveness (PUE) of 1.3 for new facilities by 2030. This regulatory push, combined with the benefits of liquid cooling, creates opportunities for growth in the adoption of these technologies.

Liquid cooling solutions offer a promising avenue for data centers to improve performance, reduce energy consumption, and meet sustainability goals in an increasingly competitive landscape.

Key Takeaways

• The Data Center Liquid Cooling Market was valued at USD 3.0 billion in 2023 and is expected to reach USD 20.7 billion by 2033, with a CAGR of 21.3%.
• In 2023, Solution led the system type segment with 65.9%, driven by the need for efficient cooling solutions in data centers.
• In 2023, Large Data Centers dominated the data center size segment with 57.1%, highlighting the growth in hyperscale data centers.
• In 2023, North America accounted for 36.4% of the market, driven by the region’s large IT infrastructure and data center growth.

System Type Analysis

Solution dominates with 65.9% due to its comprehensive approach in addressing the cooling needs of modern data centers.

The data center liquid cooling market is segmented by system type into solutions and services. The solutions segment leads the market, attributed to its critical role in effectively managing the heat generated by high-density servers and advanced hardware technologies.

This segment’s prominence is driven by the increasing deployment of powerful, compact computing devices that necessitate efficient cooling mechanisms to maintain optimal performance and prolong equipment lifespan.

Liquid cooling solutions, comprising direct liquid cooling and indirect cooling systems, are increasingly favored over traditional air cooling due to their efficiency and the ability to maintain a controlled environment with minimal energy consumption. This efficiency is crucial in an era where data center operations are intensive and power costs are rising.

Services associated with data center liquid cooling, while smaller in market share, play a supportive role by providing installation, maintenance, and customization services that enhance the functionality and efficiency of cooling solutions. These services are vital for ensuring the long-term reliability and adaptability of liquid cooling systems to various data center configurations and evolving technological needs.

The growth of the solutions segment is complemented by the services sector, which aids in the deployment of customized cooling strategies tailored to specific data center cooling requirements. This partnership between solutions and services ensures that data centers can achieve optimal cooling performance, essential for supporting the heavy computational loads of modern IT infrastructure.

Data Center Size Analysis

Large data centers dominate with 57.1% due to their high operational demands and the need for efficient, scalable cooling solutions.

In the segmentation by data center size, large data centers constitute the largest market share. This dominance is primarily due to the substantial heat loads generated by these facilities, which require more robust and efficient cooling solutions to prevent overheating and system failures.

Large data centers, typically operated by major tech companies, cloud service providers, and large enterprises, handle massive volumes of data processing that necessitate advanced cooling systems to maintain energy efficiency and operational reliability.

The liquid cooling systems for large data centers are designed to handle higher heat densities and are integral to achieving economies of scale in energy consumption. These systems are not only critical for maintaining the hardware’s performance but also for ensuring energy sustainability by reducing the overall carbon footprint of these facilities.

Small and medium data centers, while smaller in scale, also contribute to the market growth by adopting liquid cooling solutions tailored to their lesser cooling requirements. These data centers benefit from modular and flexible cooling solutions that can scale as they grow. The role of small and medium data centers is increasingly significant as more businesses require data processing capabilities closer to the edge, driven by the growth of IoT and edge computing.

The continued expansion of both large and small to medium data center segments underscores the diverse applications of liquid cooling solutions, catering to different scales of operations and supporting the overall growth of the data center liquid cooling market.

Industry Vertical Analysis

IT and telecommunications dominate with 26.5% due to the critical need for efficient data management and processing capabilities.

The segmentation by end-use industry highlights IT and telecommunications as the dominant sector. This industry’s leadership is underscored by its foundational role in the digital economy, where efficient data processing and management are paramount.

The IT and telecommunications sector relies heavily on data centers to manage, store, and distribute vast amounts of data, necessitating advanced cooling solutions to maintain system integrity and performance.

Liquid cooling in IT and telecommunications is critical for minimizing downtime and optimizing the performance of data-intensive applications, including cloud computing and large-scale data analytics. As data traffic continues to grow, driven by streaming services, mobile broadband, and cloud-based applications, the demand for efficient cooling solutions becomes increasingly crucial.

Other industries such as BFSI, healthcare, retail and e-commerce, manufacturing, and government and defense also significantly contribute to the market growth. Each of these sectors has specific requirements that drive the adoption of liquid cooling solutions.

For instance, healthcare data centers need precise temperature control for sensitive medical data, while manufacturing facilities require robust systems capable of operating in harsh industrial environments.

The diversification of end-use industries using liquid cooling systems highlights their adaptability and essential role across various sectors, supporting the widespread adoption and technological advancement within the data center liquid cooling market.

Key Market Segments

By System Type

• Solution
• Services

By Data Center Size

• Small and Medium Data Centers
• Large Data Centers

By End-Use Industry

• IT and Telecommunications
• BFSI
• Healthcare
• Retail and E-Commerce
• Manufacturing
• Government and Defense
• Other End-Use Industries

Driver

Increasing Data Center Density Drives Market Growth

The Data Center Liquid Cooling Market is growing significantly, driven by several key factors. One of the primary drivers is the increasing density of data centers. As more computing power is packed into smaller spaces, traditional air-cooling methods are becoming insufficient, leading to the adoption of liquid cooling solutions.

Another major driver is the rising demand for energy efficiency in data centers. With energy costs continuing to rise, liquid cooling is seen as a more effective way to reduce energy consumption compared to traditional cooling systems. The ability of liquid cooling to maintain optimal temperatures with lower power usage makes it an attractive option for data center operators focused on sustainability.

The growth in cloud computing adoption is also contributing to the market’s expansion. Cloud service providers require large-scale, efficient data centers to support their operations, and liquid cooling technologies are increasingly being adopted to meet the cooling demands of these high-performance facilities.

Furthermore, the expansion of high-performance computing (HPC) is driving demand for liquid cooling. HPC systems, used in applications like scientific simulations and financial modeling, generate significant amounts of heat, necessitating advanced cooling solutions.

Restraint

High Initial Installation Costs Restraints Market Growth

The growth of the Data Center Liquid Cooling Market faces several challenges, with high initial installation costs being a significant restraining factor. Liquid cooling systems are generally more expensive to install than traditional air-based cooling systems, making the upfront investment a barrier for smaller data centers or organizations with limited budgets.

Another restraint is the complexity of implementation. Liquid cooling systems require specialized design and engineering expertise, which adds to the complexity of deploying these systems in existing data centers. This complexity can lead to longer installation times and increased costs, which may deter some companies from adopting the technology.

Limited awareness of liquid cooling technologies in emerging markets also restrains growth. Many businesses in these regions continue to rely on conventional cooling methods due to a lack of understanding of the benefits and capabilities of liquid cooling solutions. This limits the market’s potential in areas where data center infrastructure is rapidly expanding.

Additionally, the dependence on specialized maintenance is another constraint. Liquid cooling systems require regular maintenance by skilled technicians, which can be costly and difficult to source in some regions.

Opportunity

Rising Adoption of AI and Machine Learning Provides Opportunities

The Data Center Liquid Cooling Market presents several growth opportunities, particularly with the rising adoption of artificial intelligence (AI) and machine learning (ML). These technologies require vast computational resources, which generate significant heat. Liquid cooling systems offer an efficient way to manage these heat loads, making them essential for data centers focused on AI and ML applications.

Another promising opportunity is the growing demand for sustainable and green data centers. With increasing pressure to reduce carbon footprints, data center operators are exploring eco-friendly cooling solutions. Liquid cooling, with its energy efficiency and reduced environmental impact, aligns well with these sustainability goals, providing a strong growth opportunity.

The expansion of edge computing and 5G services also presents a major opportunity for the market. Edge data centers, which support latency-sensitive applications, are being deployed in various locations and require advanced cooling systems to maintain performance. Liquid cooling solutions, with their ability to manage heat in confined spaces, are well-suited for these environments.

Additionally, the integration of liquid cooling with modular data centers offers further opportunities. Modular data centers, which are rapidly deployable and scalable, benefit from liquid cooling’s efficiency and space-saving advantages.

Challenge

Ensuring Compatibility with Existing Infrastructure Challenges Market Growth

The Data Center Liquid Cooling Market faces several challenges, one of which is ensuring compatibility with existing infrastructure. Many data centers are built with traditional air-cooling systems, and retrofitting them to support liquid cooling can be a complex and costly process.

Another challenge is regulatory and environmental compliance. As data centers adopt new cooling technologies, they must ensure that these systems meet regulatory requirements for safety and environmental impact. Liquid cooling solutions, especially those involving immersion cooling, must adhere to strict guidelines, which can increase implementation costs and complexity.

Managing cooling efficiency in extreme climates is also a challenge for the market. Data centers in regions with high ambient temperatures face difficulties in maintaining optimal performance with any cooling system, and liquid cooling technologies must be carefully designed to function effectively in these conditions.

Additionally, securing skilled technicians for maintenance remains a challenge. Liquid cooling systems require specialized expertise for installation, monitoring, and repairs, and the shortage of qualified technicians in some regions can hinder the growth of this market.

Growth Factors

Advancements in Liquid Cooling Technology Are Growth Factors

The Data Center Liquid Cooling Market is expanding due to several growth factors, with advancements in liquid cooling technology leading the way. Continuous innovations in this field have improved the efficiency, reliability, and scalability of liquid cooling systems, making them more attractive to data center operators.

Another key growth factor is the increased focus on reducing the carbon footprint of data centers. As companies and governments alike push for sustainability, data centers are adopting liquid cooling systems that reduce energy usage and minimize environmental impact. This aligns with broader global efforts to reduce emissions and promote eco-friendly operations in industries.

The rising adoption of liquid cooling in colocation data centers is also a significant growth driver. Colocation facilities, which house multiple organizations’ IT infrastructure, are increasingly using liquid cooling to handle the growing heat loads from high-density equipment, ensuring optimal performance while maintaining energy efficiency.

Additionally, the growing demand for liquid cooling in cryptocurrency mining is fueling market growth. Cryptocurrency mining generates a considerable amount of heat, and liquid cooling provides an effective solution to manage this heat while improving the overall energy efficiency of mining operations.

Emerging Trends

Growth in Immersion Cooling Technologies Is Latest Trending Factor

Several trends are shaping the Data Center Liquid Cooling Market, with the growth in immersion cooling technologies being a key trend. Immersion cooling, where servers are submerged in a thermally conductive liquid, offers improved heat management and energy efficiency.

Another trending factor is the increasing demand for liquid-to-chip cooling solutions. These systems deliver coolant directly to the components generating the most heat, such as processors and GPUs, providing highly efficient cooling. This trend is driven by the need for more precise cooling methods in advanced computing systems.

The focus on renewable energy integration is also becoming more prominent in the market. Data center operators are increasingly looking to combine liquid cooling solutions with renewable energy sources to reduce their overall carbon footprint, further aligning with sustainability goals.

Additionally, the adoption of hybrid cooling systems, which combine liquid and air cooling technologies, is emerging as a trend. These systems offer flexibility and efficiency, allowing data center operators to optimize their cooling strategies for different types of workloads.

Regional Analysis

North America Dominates with 36.4% Market Share

North America leads the Data Center Liquid Cooling Market with a 36.4% market share, valued at USD 1.09 billion. This dominance is driven by the high concentration of large-scale data centers, the growing demand for energy-efficient cooling solutions, and the adoption of advanced technologies such as AI, cloud computing, and big data analytics, which generate significant heat loads.

The region benefits from a well-established digital infrastructure and the presence of major tech companies that are rapidly expanding their data center capacities. Additionally, strict environmental regulations are pushing businesses to adopt more sustainable and energy-efficient cooling systems, further enhancing the demand for liquid cooling solutions.

North America’s leadership in the Data Center Liquid Cooling Market is expected to strengthen. As the region continues to innovate and invest in green data center technologies, and as data processing needs grow, liquid cooling solutions will become increasingly essential, reinforcing the region’s market dominance.

Regional Mentions:

• Europe: Europe is steadily growing in the market, driven by strict energy regulations and the rise of green data centers that prioritize energy-efficient solutions like liquid cooling.
• Asia Pacific: Asia Pacific is rapidly expanding, with increasing data center construction and a focus on high-performance computing to support growing digital economies in countries like China, Japan, and India.
• Middle East & Africa: The region is emerging as a key player, focusing on infrastructure development and the need for efficient cooling systems in high-temperature environments to support expanding data center projects.
• Latin America: Latin America is gradually adopting liquid cooling technologies, with growing demand from data centers supporting cloud services, telecommunications, and financial institutions.

Key Regions and Countries covered іn thе rероrt

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

In the Data Center Liquid Cooling Market, Schneider Electric SE, Vertiv Group Corp., and Asetek A/S are leading players, driving the adoption of liquid cooling technologies through innovation and strategic market positioning.

Schneider Electric SE holds a dominant position due to its expertise in energy management and data center infrastructure. Its liquid cooling solutions focus on energy efficiency and sustainability, making Schneider a key player in the growing demand for eco-friendly data centers.

Vertiv Group Corp. is another major player, known for providing end-to-end cooling solutions tailored to large-scale data centers. Vertiv’s emphasis on reliability, scalability, and performance keeps it at the forefront of the industry, particularly in high-density computing environments.

Asetek A/S specializes in liquid cooling technology and is a leader in offering innovative solutions for high-performance computing. Asetek’s advanced liquid cooling systems are widely adopted in data centers globally, enhancing energy efficiency and reducing operational costs.

These companies play a critical role in the Data Center Liquid Cooling Market by driving technological innovation and offering scalable, energy-efficient solutions. Their focus on sustainability and performance ensures their continued market leadership.

Top Key Players in the Market

• Schneider Electric SE
• Vertiv Group Corp.
• Asetek A/S
• Fujitsu Limited
• Alfa Laval AB
• Chilldyne
• Submer
• STULZ GMBH
• LiquidStack Holding B.V.
• Other Key Players

Recent Developments

• Nvidia: Nvidia’s Blackwell GPU series is poised to reshape data center operations, particularly in handling AI workloads. These GPUs demand advanced infrastructure, including improved cooling systems and power management, to support their computational power. Their adoption could drive efficiency gains by facilitating faster AI model training and inference.
• JetCool: In July 2024, JetCool’s CEO, Bernie Malouin, highlighted the rising need for liquid cooling in data centers as GPUs become more powerful. JetCool’s microconvective technology reduces water usage by 99% and improves cooling for modern GPUs.
• Gates Corporation: In July 2024, Gates Corporation announced the expansion of its data center cooling solutions with advanced thermal management systems. These systems aim to improve cooling efficiency while reducing energy consumption, meeting the growing demand for sustainable cooling solutions in high-performance data centers.
• SK Enmove: In February 2024, SK Enmove collaborated with Iceotope and SK Telecom to develop advanced liquid cooling solutions for AI-driven data centers. The collaboration focuses on precision cooling for improved energy efficiency and sustainability, addressing the challenges of power consumption in data-intensive operations.

Report Scope