The global immersion cooling market in data centers size was valued at USD 245 million in 2021. It is estimated to reach an expected value of USD 1675 million by 2030 at a CAGR of 23.8% during the forecast period (2022-2030).
The concept of liquid immersion cooling has been familiar in the global IT infrastructure market for a long time. High-performance computing (HPC) operators, such as Intel, have been experimenting and using the technology since 2012. Dealing with high-density power consumption is driving the market, as many industry estimates put cooling costs at around 40% of the data center's energy consumption. The immersion cooling can reduce the data center's energy usage by over 60%, with some systems stating it could be as much as a 95% reduction. For many data centers, this provides millions of dollars in savings annually.
However, the recent surge in the data center construction activities, majorly targeted toward serving high-traffic zones with minimum latency, forced the data center operators to expand beyond a suitable environment into complex urban facilities. This increased the demand for server cooling technology that involves the environmental and space constraints that traditional air and liquid cooling practices pose. The increasing need for solutions may significantly reduce the data center's physical footprint and simultaneously accommodate high-density operations, bolstering the demand for immersion cooling.
Increase in the Number of Hyper-scale Data Centres
Growing developments in IT infrastructure in emerging economies, such as India, China, and other countries, is likely to boost the demand for data centers positively. The need for data centers is expected to increase due to the adoption of the cloud model, which has a cost and operational benefits for the IT industry. According to a study by NTT Ltd, over half of the respondents (52%) mentioned that the cloud would have the most transformational impact on their organization's business operations. Hence, the demand for the cooling of data centers will increase, leading to the implementation of liquid cooling methods based on end-user preferences.
A report on the Indian data center market by straits Research Advisory and Intelligence estimates that the industry will grow at a CAGR of 12 percent until 2026. Several trends and technologies will fuel this growth. A recent Uptime Institute survey found that 73% of data center managers expect to increase their use of automation due to the pandemic. Further, one-third expected that hiring challenges will translate into smaller operations teams, even as the volume of servers continues to climb.
Private equity and large investment firms continued to grab more share of the data center market in 2021 by spending tens of billions of dollars via acquisitions, with no plans of slowing down in 2022. Such investments propel the market demand.
Dealing with High-density Power Consumption
Since 1990, space cooling energy consumption has more than tripled, posing considerable challenges for electricity systems, particularly during peak demand periods and extreme heat events. In 2020, global space cooling demand grew again, partly due to increased house cooling as more people spent more time at home. In 2020, space cooling accounted for about 16% of final electricity consumption in the construction sector (around 1 885 TWh).
The need for a cooling system for better efficiency becomes evident with clear indicators that the data center operators have increased rack densities in the past few years (according to AFCOM). Moreover, according to Cisco Systems, the data center storage capacity for co-location had risen to 330 exabytes in 2019 from 250 exabytes in 2018. Then, the growing use of Big Data, AI, to name a few, has led organizations to face a data-crunch challenge. For instance, IBM Corporation built four new cloud data centers in the US in response to the country's growing demand for cognitive capabilities. This is probably going to encourage these data centers to use cooling technologies.
On the energy absorption front, liquid immersion cooling submerges all electrical components in a dialectic liquid, thus, reducing the energy footprint of IT alone by between 10% and 45%, as per Asperitas, a Dutch startup selling plug-and-play liquid immersion cooling modules to data centers. It further highlighted that suitable dielectric liquids absorb approximately 1,500 times more heat than air with the same volumes and temperatures. All such factors contribute to market growth.
High Investment with Greater Capital Expenditure
For a large enterprise, the cost of replacing failed servers more frequently than usual may be less expensive over time than the cost of operating a hyper-scale facility at lower temperatures. However, with the growing integration of GPUs in the data centers pushed by the need for better computing power, large enterprises must move toward an efficient cooling technology.
If the two-phase immersion cooling system is compared with the single-phase immersion, the upfront costs of two-phase immersion are way more than the single-phase immersion due to the complex engineering. Since the immersion technology is new compared to water or air and the cooling technology is still innovating, the cost is comparatively high compared to traditional technologies.
Furthermore, the cost incurred for fluorocarbon-based coolants is high as they must be regularly replenished. These coolants cost hundreds of dollars per gallon to raise the overall operating expenses and offset any small power efficiency gains, to say nothing of the total cost of ownership (TCO). All the factors mentioned above hinder the market growth.
Significant Growth in Innovation Activities between Data Center Providers and Immersion Liquid Providers
There has been significant growth in innovation activities between data center providers and immersion liquid providers. Digital Reality is piloting a single-phase immersion cooling solution with summer as part of its digital platform strategy. Such partnerships can be seen in the future, with the pandemic increasing the need for data centers. A reimagined server architecture optimized for low-latency, high-performance applications, and low-maintenance operations is made possible by the ability to pack servers closely together in the tank. For use in applications like self-driving cars, such a tank could be placed underneath a 5G cellular communications tower in the middle of a city.
Policies such as keeping the data in the geographical area where the law of the land controls data privacy are expected to drive the adoption of data centers in the regions where the immersion cooling as an initial investment makes it advantageous on the recurring cost by improving efficiency, reducing the needed building space, reduced maintenance frequency, lower energy bills, and reduced mechanical parts in operation.
The global immersion cooling market in data centers is segmented by type, cooling fluid, application, and region.
By type, the global immersion cooling market in data centers is segmented into single-phase and two-phase immersion cooling systems. The two-phase immersion cooling system segment accounted for the largest market share and is estimated to grow at a CAGR of 26.7% during the forecast period. It is expected to register a CAGR of 31.1% during the forecasted period. Two-phase immersion cooling (TPIC) primarily involves storing IT hardware in an open tank filled with a dielectric fluid coolant with a low boiling point. When the hardware heats the tank, it boils the fluid, causing a state change and enabling heat transfer. The fluid converts into a vapor and rises to eventually condense on a water-cooled condenser coil and fall back into a tank without employing pumps. According to Schneider, a key supply chain partner in the immersion cooling market in data centers, a streamlined system delivers up to 95% cooling energy savings with minimal fluid loss. Such characteristics drive segment growth.
By cooling fluid, the global immersion cooling market in data centers is segmented into mineral oil, deionized water, fluorocarbon-based fluids, and synthetic fluids. The mineral oil segment accounted for the largest market share during the forecast period. Oil immersion cooling of data centers offers enhanced reliability with even temperature conditions in operations by minimizing common operational issues like overheating and temperature swings in the system, fan failures in servers, noise, dust, air quality, corrosion, and electrochemical migration. Mineral and white oils were used as a dielectric for immersive server cooling. Still, material compatibility issues, inconsistencies during quality control, and lower flash points caused the IT industry to move away from their use. Such features drive market growth.
By application, the global immersion cooling market in data centers is segmented into high-performance computing, edge computing, artificial intelligence, cryptocurrency mining, and other applications. The high-performance computing segment accounted for the largest market share during the forecast period. To facilitate its expansion, immersion is ideal for cooling GPU-accelerated servers. It can handle up to 100 kW/rack, which is almost ten times that of some air-cooled racks, allowing immersion-cooled racks to be fully loaded with GPU-based servers. As power and heat loads are increasingly pushed within the data center, more sophisticated cooling, such as immersion, is required by data centers to meet those demands. In November 2020, Asperitas was selected by Shell to provide an infrastructure upgrade for Shell’s HPC cluster in Amsterdam. The deployment of the AIC24 solution will meet Shell’s HPC team’s demands for efficient high-density and performance computing on both a system and server level within a sustainable data center environment. The system will facilitate both CPU and GPU-driven applications and offers the flexibility to scale quickly with future demands and hardware generations.
By region, the global immersion cooling market in data centers is segmented into North America, Europe, Asia-pacific, and the Rest of the World.
North America accounted for the largest market share and is estimated to grow at a CAGR of 26.7% during the forecast period. Newer technologies are quickly adopted in North America. Datacenter investors are investing more money into direct-to-chip and liquid immersion cooling technologies. The worldwide development of 5G networks—of which the United States is one of the early adopters—has boosted the significance of edge data centers. Many American operators have begun investing in these centers, including EdgePresence, EdgeMicro, and American Towers.
Additionally, according to Cisco Systems, mobile data traffic in the United States has grown significantly over time, from 1.26 exabytes of data traffic per month in 2017 to 7.75 exabytes per month by 2022. By 2030, this data traffic is anticipated to have tripled, according to Ericsson. Additionally, individuals and businesses are using the internet more frequently in the United States. The nation is the largest market for data center operations, and it is still expanding due to the increased data consumption by end users. Now more facilities can support exabytes of data generated by both business users and consumers thanks to the growing popularity of the Internet of Things (IoT), which is a significant driver for the US hyper-scale data center market.
Asia-pacific is the second largest region. It is estimated to reach an expected value of USD 955 million by 2030 at a CAGR of 26.5%. The data center industry is witnessing significant growth and is focusing more on efficiency and maximum uptime. China is highly concentrating on taking the lead over global peers in data center construction, with larger enterprises looking to scale up their data centers to ensure stability and reliability of data services, such as the application of 5G, wearable devices, the internet of things, and artificial intelligence spurs a burgeoning demand for computing power. As artificial intelligence and similar loads become standard practice across several industry verticals in China, accelerator processors are making their way into the enterprise data center. Technologies that function at zero-latency process information at astronomical speeds with the help of accelerating systems, which further the requirements of all latency-sensitive services. These hardware accelerators have higher cooling requirements, so much so that they need about 200W or more for cooling. Along with a high-performance server, the cooling need of the individual system can be almost 1kW. Thus, driving the usage of immersive cooling technology in the region's data centers.
Europe is the third largest region. The proliferation of AI, Edge computing, 5G, reduced carbon emissions, and more throughout Europe presents new challenges for legacy and new data center builds. In November 2020, GRC, a single-phase immersion-cooling authority for data centers, formed a new partnership contract with Total Data Centre Solutions (TDCS), a mission-critical and infrastructure solution provider for Data Centers throughout Europe and the Nordic region focused significantly on energy efficiency and carbon reduction. The proliferation of AI, Edge computing, 5G, reduced carbon emissions, and more throughout Europe presents new challenges for legacy and new data center builds. In November 2020, GRC, a single-phase immersion-cooling authority for data centers, formed a new partnership contract with Total Data Centre Solutions (TDCS), a mission-critical and infrastructure solution provider for Data Centers throughout Europe and the Nordic region focused significantly on energy efficiency and carbon reduction. All such factors contribute to market growth.
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