DATA CENTER COOLING MARKET Size and trends

Data Center Cooling Market Size and Trends

The data center cooling market is estimated to be valued at US$ 16.11 billion in 2025 and is expected to reach US$ 37.69 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 12.9% from 2025 to 2032.

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The data center cooling market is witnessing significant growth due the rising need to manage increasing heat load from servers. With greater number of organizations migrating to cloud-based infrastructure and utilizing advanced technologies like big data analytics, AI, and edge computing, the requirement for efficient cooling of data centers has increased. Traditionally air-cooled systems were widely used. However, with growing power densities, vendors are focusing on developing innovative liquid cooling solutions to manage thermal loads effectively. The adoption of high performance computing and increasing construction of hyper-scale data center facilities are also driving the demand for specialized cooling systems. Moreover, stringent regulations regarding energy efficiency and the growing need to reduce the carbon footprint will further contribute to the data center cooling market growth during the forecast period.

Growing Demand for Cloud Computing Services

The increasing adoption of cloud computing services around the world is driving the need for advanced data center cooling solutions. As more organizations migrate their infrastructure and applications to the cloud, it is putting more servers and workload into large scale cloud data centers. Processing all this data in the cloud generates a massive amount of heat that needs to be removed efficiently to ensure optimal performance of servers and avoid any downtime. Legacy air cooling techniques are struggling to keep pace with rising heat loads. According to a recent survey, majority of cloud service providers cited cooling as one of their biggest operational challenges. They need innovative liquid cooling technologies that can cope with today's high density infrastructures. Leading cloud players like Amazon, Microsoft, and Google are investing heavily in liquid immersion cooling which provides up to 3 times higher cooling capacity compared to traditional air-based methods. They have also started deploying direct-to-chip liquid cooling solutions for their millions of servers in mega data centers spread across the world. Considering cloud services are still in the early growth phase in many parts of the world, expansion of existing cloud data centers as well as setting up of new large facilities will further stimulate the demand for thermally efficient data center cooling products in the coming years.

For instance, in May 2022, Alibaba Cloud launched its third data center in Germany, offering a wide range of cloud services, including storage, networking, and databases. The new data center features an air conditioning system with dry dryers that utilize low ambient temperatures instead of mechanical refrigeration, providing over 6,500 hours of free cooling annually.