Data Center Liquid Cooling Market Set to Expand at 24.6% CAGR Through 2031 | Persistence Market Research

The data center liquid cooling market is undergoing significant growth, driven by the increasing demand for high-performance computing (HPC), artificial intelligence (AI), and big data analytics. As data centers continue to scale in response to these growing needs, traditional air-cooling methods are proving inefficient in managing the heat generated by high-density servers and IT equipment. Liquid cooling, in contrast, offers a more efficient, sustainable, and precise solution. The market is projected to grow from US$ 4.1 billion in 2024 to US$ 19.4 billion by 2031, recording a compound annual growth rate (CAGR) of 24.6% during the forecast period.

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Several factors are driving this market growth, including the increasing density of data centers and the rising need for energy-efficient cooling technologies. The global shift toward more sustainable practices in data center operations, supported by stringent environmental regulations, further accelerates the adoption of liquid cooling solutions. Additionally, the increasing implementation of high-performance computing and cloud services, along with the pressure to manage heat dissipation from dense IT infrastructures, is further pushing the demand for liquid cooling systems.

Key Drivers of Market Growth and Leading Segments

The market for data center liquid cooling is primarily driven by the growing need to reduce energy consumption in cooling systems. Studies indicate that liquid cooling can reduce energy usage by up to 40%, making it a superior alternative to traditional air-based cooling systems. Hyperscale data centers, which house massive servers and storage systems, are the leading segment in the adoption of liquid cooling technologies. These data centers require efficient cooling systems to handle the immense computational and storage demands, especially as AI and machine learning workloads grow more complex.

North America holds the largest share in the global data center liquid cooling market and is expected to maintain steady growth with an 11.5% CAGR through 2031. This growth is primarily driven by the demand for high-performance computing and the increasing implementation of energy efficiency regulations. The region's tech hubs, such as the U.S., are home to major cloud providers, including Amazon Web Services, Google, and Microsoft, all of which rely heavily on liquid cooling to manage the heat generated by their high-performance servers and data processing activities.

Key Highlights from the Report

• The data center liquid cooling market is expected to grow at a CAGR of 24.6% from 2024 to 2031.
• Liquid cooling solutions can reduce energy consumption for cooling by up to 40%.
• Hyperscale data centers are the leading adopters of liquid cooling technologies.
• North America will dominate the market, driven by robust cloud computing and energy efficiency demands.
• The cold plate cooling segment will account for 44.4% of the market share in 2024.
• Cloud providers are expected to see a CAGR of 28.1%, due to their increasing infrastructure needs.

Market Segmentation

The data center liquid cooling market is segmented based on various factors, including product type, end-user, and data center size. The key product types include cold plate cooling, immersion cooling, and direct-to-chip cooling. Cold plate cooling is expected to lead the market due to its ability to provide precise thermal management for high-performance servers, particularly in large data centers handling AI, machine learning, and HPC workloads.

In terms of end-users, cloud service providers are projected to be the fastest-growing segment. As the demand for cloud services continues to rise globally, cloud providers are increasingly adopting liquid cooling to manage the high heat densities and operational demands associated with large-scale data centers. Additionally, large data centers (over 10,000 sq. feet) are another major segment, as they require innovative cooling technologies to ensure the longevity and reliability of their infrastructure.

Regional Insights

North America dominates the global data center liquid cooling market, accounting for a significant share in 2024. The U.S. plays a central role, with major tech companies such as Amazon Web Services, Google, and Microsoft, which require large-scale data centers for their cloud operations. The growing demand for high-performance computing, AI, and big data analytics is driving the need for efficient and scalable cooling solutions in the region. Additionally, government regulations favoring energy efficiency and sustainability are accelerating the adoption of liquid cooling technologies.

In Europe, the demand for liquid cooling is also on the rise, driven by strict environmental regulations and the increasing need for sustainable data center operations. European countries are focusing on reducing their carbon footprint, and liquid cooling offers a more energy-efficient alternative to traditional air-cooling methods. The adoption of liquid cooling in European data centers is expected to increase as these regulations become more stringent.

Market Drivers

Several key factors are driving the growth of the data center liquid cooling market. The most significant driver is the increasing demand for energy-efficient cooling solutions. Liquid cooling is more energy-efficient than traditional air cooling, which is crucial as data centers continue to expand and generate more heat. Furthermore, the growing complexity of IT infrastructures, especially in high-performance computing, AI, and machine learning, necessitates more advanced cooling technologies.

The rise of hyperscale data centers and the increasing use of cloud computing services are additional drivers of the market. Hyperscale data centers require efficient cooling to manage the immense amount of heat produced by high-density server racks. As cloud providers continue to expand their infrastructure, the demand for liquid cooling solutions is expected to increase.

Market Restraints

Despite its advantages, the data center liquid cooling market faces some challenges. One of the primary restraints is the high initial cost of liquid cooling systems. These systems can be more expensive to install and maintain compared to traditional air cooling methods, which could deter some smaller data center operators from adopting them. Additionally, there is a lack of standardization across liquid cooling technologies, which may lead to compatibility issues between different hardware components and systems.

Another potential restraint is the complexity of integrating liquid cooling systems into existing data centers. Retrofitting an existing data center with liquid cooling infrastructure can be challenging and costly, particularly for older facilities that were designed for air cooling.

Market Opportunities

The growing trend toward sustainability presents a significant opportunity for the data center liquid cooling market. As companies and governments worldwide aim to reduce their carbon footprints, liquid cooling offers a more environmentally friendly alternative to traditional cooling methods. This is especially true in regions where water scarcity is a concern, as liquid cooling systems use less water compared to air-cooled systems.

Additionally, the rise of edge computing presents new opportunities for liquid cooling technologies. Edge data centers, which are smaller and located closer to end users, often face space and energy constraints. Liquid cooling systems, which are more compact and energy-efficient, are ideal for these types of data centers. As edge computing continues to grow, the demand for liquid cooling solutions in these facilities is expected to rise.

Reasons to Buy the Report

✔ Comprehensive market analysis with projections until 2031
✔ Insights into key growth drivers and trends shaping the industry
✔ In-depth segmentation analysis based on product types and end-users
✔ Detailed regional insights, particularly focusing on North America and Europe
✔ Competitive landscape featuring key players and recent market developments

Company Insights

Some of the key players in the data center liquid cooling market include:

• IBM Corporation
• Schneider Electric
• Asetek
• Rittal GmbH & Co. KG
• Mida Solutions

Recent Developments:

• Asetek introduced a new liquid cooling solution for high-density computing systems, offering improved energy efficiency and scalability.

• Schneider Electric announced a strategic partnership with a major cloud provider to implement its liquid cooling systems in hyperscale data centers across North America.

By understanding these trends and the market's growth drivers, operators can make informed decisions about adopting liquid cooling solutions to optimize performance and sustainability in their data centers.

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