Data Center Liquid Cooling Market Predicted to Gain Momentum to US$19.4 Bn by 2031 - Persistence Market Research

The data center industry is undergoing significant transformations as it strives to meet the increasing demand for high-performance computing (HPC), AI, big data analytics, and cloud computing services. These advancements, while driving innovation, also come with the challenge of managing the massive amounts of heat generated by these high-density systems. In response, liquid cooling technologies have emerged as a viable and highly efficient alternative to traditional air cooling solutions. The data center liquid cooling market is projected to grow exponentially, from an estimated US$ 4.1 billion in 2024 to US$ 19.4 billion by 2031, driven by the pressing need for energy efficiency, sustainability, and improved thermal management in modern data centers. This article explores the factors driving the market, key segments, regional dynamics, and future growth opportunities.

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Market Overview

The data center liquid cooling market is experiencing a rapid surge, with a projected CAGR of 24.6% from 2024 to 2031. As industries increasingly rely on technologies like artificial intelligence (AI), machine learning (ML), cloud computing, and high-performance computing (HPC), the demand for energy-efficient and reliable cooling solutions has grown. Traditional air-cooling methods are struggling to keep up with the rising heat output of high-performance servers, making liquid cooling a far superior option. Liquid cooling systems are more effective at dissipating heat, resulting in reduced energy consumption, better performance, and more sustainable data center operations.

Key Growth Drivers

Demand for Energy Efficiency: As the global digital infrastructure grows, data centers are consuming more energy than ever before. Cooling systems, which typically account for up to 40-50% of a data center's total energy use, are under pressure to become more energy-efficient. Liquid cooling technologies, with their higher thermal conductivity, significantly reduce the need for energy-intensive air circulation.

Rising Need for High-Performance Computing: With the rise of AI, ML, and HPC workloads, there is a growing need for specialized cooling solutions. Liquid cooling allows for more precise thermal management, which is essential for handling the increased power consumption and heat generation associated with these technologies.

Leading Segments and Geographical Insights

The cold plate cooling segment is the leading solution in the data center liquid cooling market, representing 44.4% of the market share in 2024. Cold plate systems offer highly targeted cooling for high-density servers and components, including CPUs and GPUs, making them indispensable for modern data centers dealing with demanding workloads. These systems are also highly adaptable, supporting the integration of new technologies like 5G and edge computing.

Geographically, North America leads the market, accounting for 30.9% of the share in 2024. The region's rapid adoption of cloud computing and the presence of major players like Amazon Web Services (AWS), Microsoft, and Google, which operate massive hyperscale data centers, are significant contributors to this growth. North America's robust regulatory environment, including tax incentives and energy efficiency standards, further supports the expansion of liquid cooling systems across data centers.

Key Highlights from the Report

➤ The market is expected to grow from US$ 4.1 billion in 2024 to US$ 19.4 billion by 2031, representing a CAGR of 24.6%.
➤ Cold plate cooling technology holds a significant share of 44.4% of the market in 2024.
➤ North America is projected to witness a CAGR of 11.5% through 2031, driven by cloud computing demands and stringent energy efficiency regulations.
➤ Liquid cooling systems are gaining traction in edge data centers, addressing space and energy constraints.
➤ Integration of liquid cooling technologies with renewable energy is emerging as a key trend for sustainability.
➤ Hyperscale data centers and cloud providers are rapidly adopting liquid cooling systems for energy-efficient cooling of high-performance workloads.

Market Segmentation

The data center liquid cooling market is diverse, encompassing several product types, end-users, and geographical regions. The key segments include:

By Product Type

Cold Plate Cooling: This technology dominates the market, driven by its efficiency in directly cooling high-density components such as CPUs and GPUs. Cold plate systems are crucial for handling the thermal output of modern HPC workloads.

Immersion Cooling: This involves submerging servers in non-conductive liquids, a method ideal for cooling large-scale, high-performance systems.

Spray Cooling: Though less common, spray cooling systems are used for localized cooling in specific, heat-intensive parts of data centers.

By End-User

Cloud Providers: Hyperscale data centers, which provide cloud services, are increasingly adopting liquid cooling systems to handle the rising heat loads from AI, ML, and big data workloads.

Colocation Providers: Companies offering shared data center facilities are also adopting liquid cooling systems to enhance energy efficiency and cooling performance.

Enterprises and Hyperscale Data Centers: These organizations, with large infrastructure needs, are adopting liquid cooling to ensure the longevity and reliability of their data center operations.

Regional Insights

North America

North America is a key player in the data center liquid cooling market, representing a significant portion of the overall demand. The region's advanced infrastructure, including large hyperscale data centers owned by tech giants like Amazon, Google, and Microsoft, drives the adoption of liquid cooling. These companies require efficient, reliable cooling solutions to manage high-density computing workloads, including AI and HPC applications. Additionally, North America benefits from strong government incentives promoting energy-efficient and sustainable data center operations.

Europe and East Asia

Europe is also witnessing substantial growth in the data center liquid cooling market, with countries like Germany, the UK, and France leading the way. The region's commitment to sustainability and environmental regulations encourages the adoption of green technologies such as liquid cooling. Similarly, East Asia, particularly China and Japan, is focusing on reducing the energy consumption of its rapidly expanding data center industry. The integration of renewable energy sources and the growing demand for high-performance computing are fueling the shift toward liquid cooling solutions in both regions.

Market Drivers

Rising Demand for High-Performance Computing (HPC)

The demand for HPC in industries such as AI, scientific research, and climate modeling is pushing the boundaries of traditional air-cooling systems. Liquid cooling offers superior thermal management, enabling data centers to support high-density servers that generate significant heat. The growing reliance on AI and machine learning further accelerates the need for these specialized cooling systems, which can maintain system performance and reliability under intense computational loads.

Need for Energy Efficiency and Sustainability

As the digital economy expands, so does the energy consumption of data centers. Liquid cooling offers a more energy-efficient alternative to traditional air-cooling methods, which require massive amounts of electricity to power large cooling systems. By efficiently dissipating heat, liquid cooling reduces the overall energy footprint of data centers, helping operators meet sustainability goals and lower operational costs.

Adoption of Green Technologies

The rising emphasis on sustainability has led to a greater focus on integrating renewable energy solutions with data center cooling. Liquid cooling systems, particularly those that utilize waste heat for district heating or other purposes, contribute to reducing a data center's carbon footprint. These technologies support the transition toward more sustainable data center operations, making them increasingly attractive to operators looking to align with global sustainability efforts.

Market Restraints

Specialized Equipment Requirements

Integrating liquid cooling systems into existing data center infrastructure can be complex. Unlike traditional air cooling, which can be easily added to most data centers, liquid cooling requires specialized equipment, such as heat exchangers, pumps, and piping systems. The installation of these systems may necessitate significant modifications to existing data centers, leading to high upfront costs and operational disruptions.

Risk of Equipment Damage

Liquid cooling systems, while highly effective, introduce new risks, particularly concerning leaks and system failures. A minor leak in a cooling loop can damage sensitive IT hardware, leading to costly downtime and repairs. To mitigate this risk, data center operators must implement robust leak detection and monitoring systems, which adds to the overall cost of deployment.

Market Opportunities

Integration with Renewable Energy

As data centers transition toward renewable energy sources like solar and wind, liquid cooling technologies present a major opportunity to improve operational efficiency. By utilizing renewable energy and waste heat recovery, data centers can further reduce their energy consumption and carbon footprint. The combination of renewable energy with liquid cooling provides a pathway to greener, more sustainable data center operations.

Innovations in Cooling Materials

The development of new coolant materials and refrigerants is expected to enhance the efficiency and scalability of liquid cooling systems. As HPC demands continue to grow, the evolution of new cooling technologies will provide greater flexibility and performance. Innovations such as two-phase cooling systems and advanced heat exchangers will play a pivotal role in driving future market growth.

Frequently Asked Questions (FAQs)

➤ How big is the Data Center Liquid Cooling Market?
➤ Who are the key players in the Global Market for Data Center Liquid Cooling?
➤ What is the projected growth rate of the Data Center Liquid Cooling Market?
➤ What is the market forecast for Data Center Liquid Cooling by 2031?
➤ Which region is estimated to dominate the Data Center Liquid Cooling Industry through the forecast period?

Company Insights

✦ Schneider Electric
✦ LiquidStack
✦ Rittal GmbH Co. KG
✦ Green Revolution Cooling Inc.
✦ DCX Liquid Cooling Systems
✦ IBM
✦ Asetek
✦ Emerson Electric Co
✦ STULZ GMBH
✦ Vertiv

Conclusion

The data center liquid cooling market is set for rapid growth, fueled by the rising demand for energy efficiency, the need to support high-performance workloads, and the push for sustainability in data center operations. As technologies like AI and HPC continue to evolve, the adoption of liquid cooling solutions will play a critical role in ensuring that data centers remain efficient, cost-effective, and environmentally friendly. With continued advancements in liquid cooling technology and a growing focus on renewable energy integration, the future of data center cooling looks more energy-efficient and sustainable than ever before.

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