Revenue Forecast—Data Center Cooling Market

The revenue estimate for the base year 2023 is $10,481.1 million with a CAGR of 9.3% for the study period from 2023 to 2032.

The Impact of the Top 3 Strategic Imperatives on the Data Center Cooling Industry

Disruptive Technologies

• Why: The growth of artificial intelligence (AI) and machine learning (ML) solutions creates demand for advanced processors that have high heat dissipation and demand more power. This is leading to a movement away from traditional data center architecture and the replacement of older cooling solutions, such as CRAC/CRAH units, with liquid and immersion cooling solutions.
• Frost Perspective: The demand for direct-to-chip cooling leads to increased use of liquid cooling solutions, while hyperscale data centers are driving demand for immersion cooling solutions as companies look at more efficient ways to reduce power consumption while tackling increasing heat dissipation.

Transformative Mega Trends

• Why: Edge, 5G, and IoT deployment are leading to the deployment of smaller data centers closer to the customer. Telecom companies will focus on smaller cell sites away from larger base stations as the 5G rollout speeds up.
• Frost Perspective: Increased edge and modular data center penetration by 2035 will drive the need for modular and miniature cooling technologies. Increased innovation and investment by technology companies, such as Google and Microsoft, will lead to the emergence of new products globally that cater to the differing needs of each region. Hyperscalers will buy out innovative cooling solutions providers to expand their product portfolios.

Industry Convergence

• Why: As data center architecture and processing technology change over the next 2 decades, the need for new equipment and technologies will increase, driving efficient data center operations. This calls for collaboration between data center operators, equipment suppliers, and technology start-ups, as companies need to invest in R&D and new product development to deploy the next generation of cooling solutions.
• Frost Perspective: Micro cooling solutions will gain traction after 2025 because of the advent of 5G technologies. This will drive the development of miniature solutions. Liquid cooling will take over server-level cooling by 2030 for all sizes of data centers as collaboration between companies drives modular cooling and power technologies.

Scope of Analysis—Data Center Cooling Market

In this study, cooling technologies fall into the following categories:

• CRACs/CRAHs: CRAC units are for room-level cooling. An operator may deploy 1 or more units to control the total heat output of all computer equipment in the space.
• High-density Cooling Systems (in-row/in-rack/rear-door/overhead cooling): High-density cooling systems comprise dedicated row-based or rack-mounted systems. These systems are for managing high heat load, which they address by moving the cooling infrastructure as close as possible to the servers. They are also capable of addressing heat loads at the point of origin; for example, at the server rack itself.
• Airsides Components and Chillers: Airside components include air handling units, fan coils, variable air volume units, cooling and heating coils, and other components used in the installation of other cooling systems. Chillers, which are typically found only in large data centers, come in various forms, including air-cooled, water-cooled, reversible air-cooled, air-cooled liquid, and condenser-less systems. These systems come with airside equipment and can support the building-level cooling infrastructure that is not restricted to the data center space.
• Advanced Solutions: Examples include evaporative/adiabatic cooling, direct liquid/immersion cooling, and economizer segment/free cooling.

Key Findings—Data Center Cooling Market

• The global data center cooling market will record high growth as greater data collection and the expansion of cloud services lead to increased demand for high-power servers that require more advanced forms of cooling. The cooling market will grow at 9.3% CAGR between 2023 and 2032. Investment from hyperscale cloud data center operators and colocation providers drives the demand globally.
• Asia-Pacific (APAC) will see the highest growth in the data center cooling market as companies ramp up data center installations and require higher cooling due to the region’s hot climate. The advent of 5G and the growing affordability of cell phones drive the demand for data and data processing, making the region the largest data creator in the world. APAC will hold a 48.7% share in 2032, up from 39.9% in 2023. North America (NA) is the second-largest market and Europe ranks third. Both regions will see increased hyperscale data creation. NA will lead in terms of new technologies, such as liquid/immersion cooling, and innovation will drive the development of liquid cooling systems. Entire hyperscale data centers in NA could move to liquid cooling technology by 2030.
• Companies in Europe are shifting to alternate forms of cooling, such as natural/free cooling and water- or liquid-based cooling, to reduce overall operation costs (they want to leverage the region’s cold climate). In addition, new mandates to use the excess heat that data centers generate for district heating requirements will drive the adoption of liquid cooling systems in the continent.
• Traditional cooling solutions, such as CRACs/CRAHs, will lose market share to advanced cooling solutions, such as liquid or free cooling; this is mainly because companies are looking to move away from air conditioners and fans. However, traditional solutions will retain the highest market share of 39.2% in 2032, followed by advanced cooling solutions at 33.8%.
• Data center architecture will undergo significant changes, which will lead to reduced power and cooling requirements. The deployment of AI and ML systems will maximize the use of free cooling and regulate liquid cooling systems as necessary. Cooling solutions are becoming more efficient because AI/ML systems are making most decisions, which maximizes the use of natural resources.

Growth Drivers—Data Center Cooling Market

• Technology companies’ increased investment in data centers drives the construction and development of hyperscale data centers globally. As companies deploy next-generation processors and electronics in these data centers, their cooling requirements will change from traditional to more advanced solutions. This will drive the demand for new cooling products to cater to the increased heat that these data centers generate.
• The deployment of edge and modular data centers will speed up as the 5G rollout takes place globally. This drives the demand for smaller and miniaturized cooling solutions that are compact, easy to install and maintain, and easy and quick to deploy in dense urban areas. This will drive the development of new cooling products for micro data centers.
• Global data protection norms will drive the development of local data center clusters. The enactment of personal and industrial data protection norms will drive the demand for local cloud and colocation data centers, leading to regional demand for cooling solutions. Pressure from governments to use local resources for cooling solutions will increase, driving the demand for liquid/immersion cooling solutions.
• As data centers evolve to adapt to changing technology, companies will increase their focus on the next generation of products that cater to new IT hardware and processors, especially in older data centers that are at least 20 years old. This will increase the modularization and miniaturization of cooling products for micro data center environments and lead to the replacement of older cooling equipment in existing facilities.

Growth Restraints—Data Center Cooling Market

• Resistance to change is common even though companies need to change existing data center design and architecture to deploy next-generation cooling solutions. Data center operators are reluctant to redesign existing centers, as this calls for substantial investment in new facilities and upgrades. Server manufacturers are also reluctant to move toward new systems, as this would entail redesigning existing systems, which affects the deployment of new cooling solutions.
• To reduce operational costs, companies are looking for environmental solutions to reduce their power consumption during cooling. This prompts them to set up data centers in colder regions that have natural and free cooling, which they can use to cool their centers and reduce the need for traditional cooling solutions.
• Telecom firms will go slow on the 5G rollout, especially in NA and Europe, because debt hinders new investments in infrastructure, reducing the deployment of edge and micro data centers.
• The high cost of hyperscale and colocation data centers decreases the adoption of new technologies, as some companies hold on to older technologies to reduce upfront costs.

Key Competitors—Data Center Cooling Market

• Vertiv
• Stulz
• Schneider
• Rittal
• Liquid Cooling
• 3M
• Eaton
• Pentair
• Legrand
• Johnson Controls
• Green Revolution Cooling
• Daikin
• Trane
• Carrier
• Hitachi
• Fujitsu
• Nortek
• Mitsubishi Electric
• 3M
• Legrand
• Johnson Controls
• Green Revolution Cooling
• Daikin
• Trane
• Carrier
• Hitachi
• Fujitsu
• Nortek
• Mitsubishi Electric
• Sanyo Denki
• Carrier
• Trane
• Fujitsu
• Daikin
• Johnson Controls
• Mitsubishi Electric
• Vertiv
• Schneider
• Rittal
• Hitachi
• Mitsubishi Electric
• Carrier
• Trane
• Daikin
• Legrand
• Fujitsu
• Johnson Controls