Global Data Center Liquid Cooling Market Grows Tremendously at a CAGR of 27.11%

Introduction

A data center is a building that houses storage servers, networking devices, and other vitally important connectivity equipment. These buildings are hired to replicate the capabilities of an on-premise computer system, thereby reducing operational costs for consumers. Liquid cooling is how data center operators maintain acceptable temperatures. The constant operation of data centers causes the components to overheat. Overheating can result in outages, preventing the continuous operation of a data center. Aside from this, the servers are designed to operate at an optimal temperature, and any deviation from this temperature may result in malfunction. Consequently, cooling becomes an essential aspect of data center operations. Liquid cooling is among the most efficient cooling technologies, potentially reducing cooling operations' power consumption by 50-90%, depending on the deployed technology.

Market Dynamics

Changing Government and International Policies on Carbon Emissions and Increased Emphasis on Energy Efficiency Drive the Global Market

Government and regional regulators have significantly enabled environmental laws and legislatures over the past decade. This has resulted in the formation of numerous international agreements and accords that dictate how multiple nations must achieve carbon neutrality. The Green Deal is a long-term strategy developed by the European Union to implement green and sustainable development in the region. According to the Green Deal, the European Union plans to implement carbon neutrality for the entire data center industry by 2030. Consequently, data center operators and associations have launched a self-regulatory initiative dictating the carbon neutrality targets for data centers. Efforts to reduce water scarcity, combat climate change, promote sustainable urban infrastructure, and recycle and reuse are among the SDGs expected to spur innovation and advancements in liquid cooling technology adoption.

Retrofitting Existing Infrastructure Creates Tremendous Opportunities

Experts say that after 9–10 years, a data center is generally considered obsolete and needs an update. Some older data centers may require compatibility with current liquid cooling technologies; however, the market for liquid cooling can benefit from retrofitting aging infrastructure. With the rise of cloud computing and hyperscale data centers, recent trends also indicate a decline in the number of data centers as the size of data centers continues to expand. Consequently, only a single data center is required instead of several. As more organizations adopt cloud services or hire colocation services, the number of enterprise data centers is also reduced. Despite these declining tendencies, many existing infrastructures remain relevant for decades as large organizations continue favoring on-premise data centers. This will eventually increase the demand for retrofitting liquid cooling technologies.

Regional Analysis

Europe is the most significant global data center liquid cooling market shareholder and is anticipated to exhibit a CAGR of 24.77% during the forecast period. Europe's industrial and commercial ecosystem is mature. It is a leader in adopting Industry 4.0 technologies, one of the most important factors influencing the rising demand for data center services. In addition, increased adoption of technologies like AR/VR, IoT, and edge computing applications will directly impact the data centers demand in the region, positively impacting the data center liquid cooling market. EU initiatives also bolster the European market. The European Union consistently promotes green initiatives, such as increasing renewable energy production capacity, raising awareness about energy efficiency, and enhancing standards. If Europe achieves its 2030 climate and energy efficiency goals, it will be able to reduce emissions by 40 percent from their 1999 levels. Europe will be able to increase its energy efficiency by 27% from its current level. This will indirectly boost the region's liquid cooling market for data centers.

North America is estimated to exhibit a CAGR of 26.72% over the forecast period. North America is among the world's largest markets for data centers. Large industrial and commercial enterprises significantly impact the need for data centers in the region. Some of the largest hyperscale operators, including Google, Microsoft, Facebook, and AWS, are headquartered in North America. These companies have all committed to becoming carbon neutral within the next decade. This could catalyze the liquid cooling market for data centers in the region. With nearly 95% of the population connected to the internet, North America is also home to several leading telecom companies. In addition, the region is anticipated to experience a 43% increase in interconnection bandwidth, which is expected to propel the data center's demand and influence the data center liquid cooling market.

Key Highlights

• The global data center liquid cooling market was valued at USD 2,931.67 million in 2022. It is estimated to reach USD 25,396.94 million by 2031, growing at a CAGR of 27.11% during the forecast period (2023–2031).
• Based on solution type, the global data center liquid cooling market is bifurcated into indirect and direct cooling. The indirect cooling segment dominates the global market and is expected to exhibit a CAGR of 22.88% over the forecast period.
• Based on data center type, the global data center liquid cooling market is divided into hyperscale centers, enterprise type, colocation data centers, and others. The hyperscale center segment is responsible for the largest market share and is anticipated to exhibit a CAGR of 28.02% over the forecast period.
• Based on the end-user industry, the global data center liquid cooling market is segmented into IT and telecom, government and public sector, banking, financial services and insurance (BFSI), healthcare, manufacturing, retail, and others. The IT and telecom segment owns the highest market share and is expected to exhibit a CAGR of 27.17% during the forecast period.
• Europe is the most significant global data center liquid cooling market shareholder and is anticipated to exhibit a CAGR of 24.77% during the forecast period.

Competitive Players

Competitive Players

The key players in the global data center liquid cooling market are Aquila Group, Aspen Systems Inc., Asetek, Inc., Chilldyne, Inc., CoolIt Systems, Cooler Master Co., Ltd., DCX The Liquid Cooling Company, Fujitsu, International Business Machines Corporation, ExaScaler Inc., 3M, Schneider Electric, Submer, and Royal Dutch Shell plc.

Recent Developments

Market News

• In March 2023, Climate business Trane Technologies invested LiquidStack, a manufacturer of liquid immersion cooling solutions for data centers. The investment will promote adopting LiquidStack's solutions to minimize the carbon footprint, water usage, electronic waste, and environmental effect of data centers.
• In January 2023, NTT announced the deployment of Liquid Immersion Cooling and Direct Contact Liquid Cooling in its Indian data centers, a first in sustainability. This is the first time the Liquid Immersion Cooling (LIC) and Direct Contact Liquid Cooling (DCLC) technologies have been deployed in a data center's production environment.

Segmentation

Global Data Center Liquid Cooling Market: Segmentation

By Solution Type

• Indirect Cooling
• Direct Cooling

By Data Center Type

• Hyperscale Centers
• Enterprise Type
• Colocation Data Centers
• Others

By End-User Industry

• IT and Telecom
• Government and Public Sector
• Banking, Financial Services, and Insurance (BFSI)
• Healthcare
• Manufacturing
• Retail
• Others

By Regions

• North America
• Europe
• The U.K.
• China
• Asia-Pacific and Japan
• Rest-of-the-World