DATA CENTER COOLING MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

The data center cooling market is estimated to be valued at US$ 14.27 billion in 2024 and is expected to reach US$ 32.91 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 12.7% from 2024 to 2031.

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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.

The rise of Artificial Intelligence (AI), Internet of Things (IoT), 5G networks, and edge computing is propelling the need for more powerful data center infrastructure located closer to the end users. Processing huge volumes of data generated at the edge using AI and IoT sensors requires cutting edge servers with high performance GPUs and CPUs. However, these dense systems dissipate significantly higher heat loads which needs to be removed quickly to prevent thermal throttling. Traditional air cooling designs struggle to keep pace with thermal requirements of such advanced edge data centers. Also, with edge facilities being deployed in various environmental conditions at customer premises and cell towers, cooling systems must be resilient enough to function reliably without disruptions. Leading AI technology companies have started investing in direct-to-chip immersion cooling that provides up to 10 times higher cooling density for their AI training clusters compared to air. Major telecom operators and cloud giants are also deploying hybrid cooling solutions combining liquid cooling with outdoor economizers to handle heat loads at their micro data center pods located at cell sites. Rising adoption of AI, IoT, and edge services will compel more data center operators to implement next-gen liquid cooling methods for reliable thermal management of their future.

For instance, in April 2023, Meta announced changes to its liquid cooling techniques for AI-centric data center design, focusing on optimizing new facility usage to better support artificial intelligence.