Data Center Liquid Cooling Market Analysis by Component (Solutions, and Services); by Product Type (Modular Liquid Cooling Units, Integrated Rack Liquid Cooling, Heat Exchangers for Hot Spots, Door Units, and Device-Mounted Liquid Cooling); and by End User (BFSI, IT & Telecom, Government & Defense, Healthcare, Retail, Manufacturing, Energy, Research & Academic, and Others) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4747 | Published Date: Mar 24, 2023
The global data center liquid cooling market size is estimated to reach ~USD 31 Billion by the end of 2035 by growing at a CAGR of ~26% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of data center liquid cooling was ~USD 3 Billion. The growth of the market can be attributed to the increasing number of data centers.Germany is home to nearly 490 data centers as of January 2022. At around 450, the United Kingdom was the third-highest country in terms of data centers, after China that has around 440. In addition to this, several hyper-scalers are now constructing massive, more than 80MW data centers in Europe.
In addition to these, factors that are believed to fuel the market growth of data center liquid cooling include the rising use of mobile phones and the internet. Mobile technology and the internet have become widely available and affordable are expected to increase internet and mobile phone usage Globally around 5 billion distinct mobile internet users were recorded in 2022, which means that more than 60% of all internet users in the world access the internet using a mobile device. On the other hand, the rising adoption of cloud and advanced technology is also expected to drive the market growth of data center liquid cooling.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~26% |
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Base Year Market Size (2022) |
~ USD 3 Billion |
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Forecast Year Market Size (2035) |
~ USD 31 Billion |
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Regional Scope |
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Growth Drivers
Rise in the Number of Data Centers –When it comes to transporting heat, liquids such as water and other substances are anywhere between 50 and 1,000 times more effective than air. Liquid cooling has begun to be used in data centers for devices other than hardware platforms and supercomputers. Therefore, the higher number of data centers is likely to boost market growth. India had 138 data centers as of March 2022. Moreover, by 2025, that number is anticipated to increase to 183, and Germany has about 487 data centers.
Rising Adoption of Advanced Technologies –The productivity of data centers can be increased by automating numerous tasks utilizing AI-based robots. Data centers may function more sustainably thanks to cutting-edge technologies like AI and ML, both financially and environmentally. AI is used by around 37% of companies and organizations across the globe. Moreover, nearly 15% of prominent firms use AI capabilities in their work, while about nine out of ten have invested in AI technologies.
Increasing Prevalence of Digitization –Rollout of a 5G network along with rapidly growing digitization and internet penetration are projected to boost the numbers of the data center all across the world. In the last two decades, digital technologies have transformed civilizations and reached almost 50% of the global population in the developing world according to the United Nations. It is moving faster than any other innovation in human history.
Growing Use of Cloud Services – Migration to cloud services has increased the investment in data centers. Moreover, data centers can spend less on infrastructure and gain manageability by utilizing a hybrid cloud strategy. As per a survey, in 2021 almost 90% of global respondents said their companies are adopting the cloud. Compared to 88% last year, there has been a slight increase.
Rising Use of Smartphones – The rising use of smart devices generates an ongoing growth in data, necessitating an expansion in storage capacity and data centers. As of January 2023, there were more than six billion smartphone subscriptions worldwide, and that number is expected to increase over the following several years by several hundred million. The nations with the most smartphone users are China, India, and the United States.
Challenges
The global data center liquid cooling market is segmented and analyzed for demand and supply by end user into BFSI, IT & telecom, government & defense, healthcare, retail, manufacturing, energy, research & academic, and others. Out of the nine end users of data center liquid cooling, the IT & telecom segment is estimated to gain the largest market share in the year 2035. The growth of the segment can be attributed to the increasing usage of data. Globally, around 11 gigabytes of data were utilized by smartphones per month on average in 2021. Moreover, it is expected to almost quadruple by 2027, when it would grow to approximately 41 GB per smartphone each month globally. Furthermore, the rising generation of data in the IT & telecom sector is also expected to boost market growth. The phrase "data is the new oil" was first said by British mathematician Clive Humby fifteen years ago. Since then, the volume of data worldwide has multiplied around 74 times.
The global data center liquid cooling market is also segmented and analyzed for demand and supply by product type into modular liquid cooling units, integrated rack liquid cooling, heat exchangers for hot spots, door units, and device-mounted liquid cooling. Amongst these five segments, the heat exchangers for hot spots segment are expected to garner a significant share in the year 2035. Heat exchanger for hot spots is gaining popularity and completely replacing the door units and rack liquid cooling. The primary driving factor for the segment growth is the cost-effective deployment of data center liquid cooling. Basic liquid cooling requires a complete change in infrastructure which was previously used in air cooling. Learning new skills and implementing a new management framework is the primary need of IT and data center operators when using liquid cooling, who may also incur increased operating expenditures. However, the heat exchanger hotspots are efficiently used along with the air-cooling systems which saves a lot of cost for the operators.
Our in-depth analysis of the global data center liquid cooling market includes the following segments:
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By Component |
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By Product Type |
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By End User |
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The market share of data center liquid cooling in North America, amongst the market in all the other regions, is projected to be the largest market by the end of 2035. The growth of the market can be attributed majorly to the increasing count of data centers and the rising adoption of cloud services in the region. There are currently around 3200 data centers in the United States, there are nearly 3000 service providers and over 80 network fabrics. Moreover, now, the world's largest region for connectivity and cloud is the United States. The financial centers of New York and Chicago, as well as the tech centers of the Bay Area (San Francisco), Seattle, and Portland, are among its key markets. In addition to this, there are around 350 providers of hosting and cloud services in the region.
The Asia Pacific data center liquid cooling market is estimated to be the second largest, registering a significant share by the end of 2035. The growth of the market can be attributed majorly to the rising investment to boost the data center’s capacity. The Indian IT ministry intends to provide incentives for data centers under a national policy framework valued at up to USD 1800 million. Moreover, the policy states that over the next five years, the government plans to invest more than USD 36 billion in the ecosystem of data centers. Furthermore, the rising prevalence of digitization in the region is also expected to augment market growth. In December 2022, there were 35 million more Chinese users online than there were a year prior. In the nation, there were more than a billion internet users.
Further, the market in the Europe, amongst the market in all the other regions, is projected to hold a notable of the share by the end of 2035. The growth of the market can be attributed majorly to the rising adoption of advanced technologies, including AI, IoT, big data, cloud services, and others. On the other hand, market growth in the region is also expected on the account of rising investment in data centers. Investment in data centers will spread throughout Europe. In order to reduce latency for the expansion of 5G mobile edge, video streaming, and gaming services. For instance, the market for European data centers saw investments of around USD 7 billion in 2021. These investments are expected to have climbed to USD 11 billion by 2027.
Rittal GmbH & Co. KG announce the partnership with Stulz to begin offering advice, support, and services for custom data center infrastructure. It enables clients to benefit from a broader selection of premium and precise cooling systems for big and mid-sized data centers.
Baltimore Aircoil Company announces the acquisition of Eurocoil SPA to strengthen its position in the data center cooling market. By acquiring Eurocoil, Baltimore Aircoil will be able to produce more heat exchangers for use in its already-existing evaporative hybrid and adiabatic cooling products in the area.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: Increasing number of data centers, rising adoption of technologies, and higher usage of the internet and mobile phones are the major factors driving the market growth.
Ans: The market size of data center liquid cooling is anticipated to attain a CAGR of ~26% over the forecast period, i.e., 2023 – 2035.
Ans: The risk of leakage of liquid, the need for dedicated infrastructure, and the lack of liquid cooling material are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Switch Datacenters, Baltimore Aircoil Company, Brentwood Industries Inc., Paharpur Cooling Towers Ltd., SPX Cooling Tech, LLC, Airedale International Air Conditioning Ltd., Berg Chilling Systems Inc., Vertiv Group Corp., Honeywell International Inc., and Rittal GmbH & Co. KG.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by component, product type, end user, and by region
Ans: The IT & telecom segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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