Data Center Liquid Cooling Market - A Global and Regional Analysis: Focus on Product, Application, and Country Analysis - Analysis and Forecast, 2024-2034

Data Center Liquid Cooling Market Overview

The global data center liquid cooling market, valued at $5.65 billion in 2024, is expected to reach $48.42 billion by 2034, exhibiting a robust CAGR of 23.96% during the forecast period 2024-2034. The data center liquid cooling market has been experiencing rapid growth, driven by the rising demand for energy-efficient and sustainable cooling solutions to support high-performance computing (HPC), artificial intelligence (AI), and hyperscale data centers. Key drivers include the proliferation of advanced technologies such as immersion and direct-to-chip cooling, which offer superior thermal efficiency and reduced power consumption compared to traditional air cooling systems.

Regulatory pressures to reduce carbon footprints and achieve net-zero goals are encouraging adoption alongside advancements in liquid cooling systems that facilitate higher server densities and operational reliability. Industry players are innovating with sustainable cooling fluids and scalable solutions tailored to emerging AI workloads and 5G applications.

However, challenges such as high implementation costs and limited standardization persist. Despite these obstacles, liquid cooling remains essential for addressing the growing heat densities of modern IT infrastructure while promoting sustainability and optimizing performance, solidifying its position as a transformative technology in data center operations.

Introduction to the Data Center Liquid Cooling Market

The data center liquid cooling market has been witnessing significant growth, driven by increasing demand for energy-efficient and sustainable solutions amid the global push toward net-zero carbon emissions. The rapid adoption of 5G and 6G technologies has heightened IT loads, necessitating advanced cooling systems to meet escalating power demands. Liquid cooling technologies enhance efficiency, reduce carbon footprints, and support the growing need for high-performance computing (HPC) and artificial intelligence (AI).

This market analysis encompasses detailed insights into applications, products, and regional dynamics, highlighting drivers, restraints, and opportunities in key regions such as the U.S., Germany, and South Korea. The study provides a comprehensive perspective on the market's development and growth potential by leveraging in-depth research and predictive models. The focus on sustainability, coupled with innovation in cooling technologies, positions liquid cooling as a pivotal factor in modernizing data center operations globally.

Market Introduction

The data center liquid cooling market has been experiencing rapid growth due to rising energy efficiency and sustainability demands in response to increasing IT loads from technologies such as 5G and AI. Liquid cooling systems offer superior thermal management, reduce energy consumption, and lower carbon footprints, making them essential for modern data centers. With advancements in cooling technologies and global sustainability goals, this market supports high-performance computing and environmental initiatives. Comprehensive research highlights key applications, regional trends, and market opportunities, emphasizing liquid cooling's critical role in driving efficiency and sustainability across the data center industry.

Industrial Impact

The data center liquid cooling market significantly impacts industries by enabling high-performance computing while addressing sustainability goals. Its advanced thermal management systems reduce energy consumption and carbon emissions, supporting IT, telecom, healthcare, and finance industries that rely on data-intensive operations. As 5G, AI, and cloud computing adoption grows, liquid cooling ensures operational efficiency, scalability, and compliance with environmental standards. This technology drives innovation, reduces operational costs, and supports global net-zero initiatives, positioning itself as a transformative solution for industries navigating increased digitalization and sustainability challenges.

Market Segmentation

Segmentation 1: by End-Use

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

IT and Telecom to Lead the Market (by End User)

The IT and telecom segment is set to dominate the data center liquid cooling market, driven by its critical role in managing substantial data volumes generated by data-intensive applications. The adoption of advanced technologies such as 5G, 6G, AI, and virtual reality has spurred demand for efficient data transmission and processing. As the backbone of modern economies, the IT and telecom industry supports low-latency requirements and massive data generation. Additionally, the BFSI sector's shift toward paperless operations further amplifies demand for data centers, enhancing the need for liquid cooling technologies.

Segmentation 2: by Data Center

Hyperscale Data Center
Enterprise Data Center
Colocation Data Center
Others

Hyperscale Data Center to Lead the Market (by Data Center)

The hyperscale data center segment is set to lead the data center liquid cooling market, driven by its critical role in supporting cloud services and computing applications. The increasing shift from physical to cloud computing has significantly boosted demand for hyperscale facilities. Major players such as Alibaba, Microsoft, and Google have already adopted advanced liquid cooling technologies, setting industry benchmarks and driving further growth. This trend underscores hyperscale data centers' dominance in meeting rising demands for energy-efficient and scalable cooling solutions.

Segmentation 3: by Solution

Rear Door Heat Exchangers (RDHX)
Direct Cooling
Direct-to-Chip Liquid Cooling System
Immersion Cooling System

Rear Door Heat Exchangers (RDHX) to Lead the Market (by Solution)

The rear door heat exchanger segment is set to dominate the data center liquid cooling market from 2024 to 2034 due to advancements in cooling technology that enhance efficiency and sustainability. These systems effectively utilize server-generated heat to reduce energy consumption, offering superior energy efficiency compared to direct cooling methods. Studies, such as those from Lawrence Berkeley National Laboratory, highlight their ability to eliminate hot spots, ensure uniform temperature distribution, and optimize IT performance. This precise cooling solution aligns with the growing demand for energy-efficient and sustainable data center operations.

Segmentation 4: by Region

North America
Europe
U.K.
Asia-Pacific
China
Rest-of-the-World

North America to Lead the Market (by Region)

North America is expected to lead the data center liquid cooling market from 2024 to 2034, driven by increasing emphasis on sustainability and government initiatives promoting eco-friendly practices. The U.S. Department of Energy (DOE) allocated $42 million to support data centers transitioning to green cooling systems under its ARPA-E program, aiming to reduce cooling power consumption and achieve carbon neutrality by 2050. This growth is fueled by the large-scale adoption of technologies supporting digital transformation and environmental policies, solidifying the region's dominance in the market.

Recent developments in the data center liquid cooling market:

In August 2023, Boyd collaborated with NVIDIA and the Department of Energy on the COOLERCHIPS program to reduce data center cooling energy consumption to less than 5% of total energy use.
In November 2023, nVent showcased its advanced liquid cooling portfolio, including row-based liquid-to-air heat rejection units and rear door air-to-liquid heat exchangers. These modular solutions enable hyperscale data centers to meet growing cooling demands without extensive infrastructure upgrades.
At the Supercomputing Conference 2024 (SC24) in November 2024, JETCOOL Technologies Inc. unveiled its SmartPlate cooling technology and a 300kW coolant distribution unit (CDU), enabling seamless scalability up to 2.1MW for hyperscale AI workloads. This collaboration with Flex emphasizes the integration of the company’s microconvective cooling with Flex’s manufacturing capabilities, offering purpose-built solutions for AI and HPC applications.

Demand – Drivers, Challenges, and Opportunities

Market Drivers

The data center liquid cooling market is driven by increasing data center spending, the growing need for hyperscale facilities, and the demand to reduce operational costs. Rising data generation and technological advancements, such as cloud computing, AI, and IoT, have amplified the need for efficient and sustainable cooling solutions. Hyperscale operators such as Microsoft and Alibaba are pioneering liquid cooling technologies to enhance performance and sustainability. Liquid cooling extends equipment lifespan, minimizes energy consumption, and saves resources, making it essential for environment-friendly and cost-efficient data centers amid surging global electricity and water demands.

Market Restraints

The data center liquid cooling market faces significant restraints due to high investment costs and the presence of alternative cooling technologies. The upfront expenses of implementing liquid cooling systems, including specialized infrastructure and expensive coolants, deter widespread adoption. Additionally, traditional air and water-based cooling methods, including green data centers utilizing free air-cooling systems, present viable alternatives. High operational costs and compatibility challenges with existing infrastructure further hinder adoption. However, as regulatory pressures and the demand for energy-efficient solutions grow, liquid cooling technologies are expected to gain traction, albeit gradually, as a cornerstone of sustainable data center operations.

Market Opportunities

The data center liquid cooling market presents significant opportunities driven by retrofitting aging infrastructure, heat repurposing, and the growth of internet and cloud services. Retrofitting older data centers with liquid cooling enhances efficiency, reduces energy consumption, and modernizes facilities for AI and IoT advancements. Supported by regulatory mandates, heat reuse initiatives enable sustainability by repurposing waste heat for industrial applications. Additionally, increased data generation from 5G, IoT, and OTT platforms fuels the demand for energy-efficient data centers. These trends highlight the transformative role of liquid cooling in achieving sustainable, scalable, and high-performance data center operations.

How can this report add value to an organization?

Product/Innovation Strategy: This report provides a comprehensive product and innovation strategy for the data center liquid cooling market, highlighting opportunities for market entry, technological advancements, and sustainable practices. It offers actionable insights that enable organizations to meet carbon reduction goals and capitalize on the increasing demand for liquid cooling of data centers across various sectors.

Growth/Marketing Strategy: This report outlines a robust growth and marketing strategy specifically tailored for the data center liquid cooling market. It emphasizes a targeted approach to identifying niche market segments, establishing competitive advantages, and implementing innovative marketing initiatives to optimize market share and financial performance. By leveraging these strategic recommendations, organizations can strengthen their market presence, exploit emerging opportunities, and drive revenue growth effectively.

Competitive Strategy: This report formulates a strong competitive strategy designed for the data center liquid cooling market. It assesses key market players, suggests differentiation tactics, and provides guidance for maintaining a competitive edge. By following these strategic directives, companies can effectively position themselves against competitors, ensuring long-term success and profitability in a rapidly evolving market.

Research Methodology

The section exhibits the standard assumptions and limitations followed throughout the research study named “Data Center Liquid Cooling Market”:

The scope of this report has been focused on applications and types of products.
The base currency considered for the market analysis is US$.
Currencies other than the US$ has been converted to US$ for all statistical calculations, considering the average conversion rate for that particular year.
The currency conversion rate has been taken from the historical exchange rate of the Oanda website.
All the recent developments from January 2021 to January 2025 have been considered in this research study.
The information rendered in the report is a result of in-depth primary interviews, surveys, and secondary analysis.
Where relevant information was not available, proxy indicators and extrapolation were employed.
Any economic downturn in the future has not been taken into consideration for the market estimation and forecast.
Technologies currently used are expected to persist through the forecast with no major technological breakthroughs.

Market Estimation and Forecast

This research study employs extensive secondary sources, including certified publications, articles from recognized experts, white papers, annual reports from relevant companies, industry directories, and major databases, to gather valuable and actionable information for a comprehensive, technical, and market-oriented analysis of the data center liquid cooling market.

The market engineering process encompasses calculating market statistics, estimating market size, forecasting trends, and conducting data triangulation (the methodology for these quantitative data processes is detailed in subsequent sections). Primary research has been conducted to collect information and validate market figures related to segmentation types and industry trends among key players in the data center liquid cooling market.

Primary Research

The primary sources involve industry experts from the data center liquid cooling market and various stakeholders in the ecosystem. Respondents such as CEOs, vice presidents, marketing directors, and technology and innovation directors have been interviewed to obtain and verify both qualitative and quantitative aspects of this research study.

The key data points taken from primary sources include:

validation and triangulation of all the numbers and graphs
validation of reports segmentation and key qualitative findings
understanding the competitive landscape
validation of the numbers of various markets for market type
percentage split of individual markets for geographical analysis

Secondary Research

This research study of the data center liquid cooling market involves extensive secondary research, directories, company websites, and annual reports. It also makes use of databases, such as ITU, Hoovers, Bloomberg, Businessweek, and Factiva, to collect useful and effective information for an extensive, technical, market-oriented, and commercial study of the global market.

Secondary research was done to obtain crucial information about the industry’s value chain, revenue models, the market’s monetary chain, the total pool of key players, and the current and potential use cases and applications.

The key data points taken from secondary research include:

segmentations and percentage shares
data for market value
key industry trends of the top players of the market
qualitative insights into various aspects of the market, key trends, and emerging areas of innovation
quantitative data for mathematical and statistical calculations

Key Market Players and Competition Synopsis

The companies that are profiled in the data center liquid cooling market have been selected based on input gathered from primary experts and analyzing company coverage, project portfolio, and market penetration.

Some of the prominent names in this market are:

Asetek, Inc.
Asperitas
Chilldyne, Inc.
COOLIT SYSTEMS
DCX INC.
GRC, Inc.
Iceotope
LiquidStack Holding B.V.
Submer
Vertiv Group Corp.
ZutaCore, Inc.
Coolcentric
Midas Immersion Cooling
Motivair Corporation
PEZY Computing Inc.
Mikros Technologies
Nortek Air Solutions, LLC
TMGcore, Inc.
Koolance, Inc.
Firmus Technologies Pty Ltd
Shenzhen MicroBT Electronics Technology Co., Ltd
LiquidCool Solutions
Rittal GmbH & Co. KG
Accelsius
Legrand
STULZ GMBH
Sunonwealth Electric Machine Industry Co., Ltd.
WERNER FINLEY
Boyd
Danfoss
nVent
ALFA LAVAL
Kelvion Holding GmbH
FogHashing
Super Micro Computer, Inc.
JETCOOL Technologies Inc.

Companies not part of the pool have been well represented across different sections of the report (wherever applicable).

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