Data Center Cooling - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Data Center Cooling Market size is estimated at USD 16.56 billion in 2024, and is expected to reach USD 34.51 billion by 2029, growing at a CAGR of 15.82% during the forecast period (2024-2029).

Due to the high computational needs of AI and media applications, data centers are being increasingly deployed worldwide. These data centers consume a massive amount of power, generating a significant amount of heat, further creating the need for various efficient cooling systems.

Key Highlights

• The data center cooling market is expected to show substantial growth due to the increase in digitization worldwide, which will lead to greater computer performance and require a larger number of integrated small chips. The design of data centers and the need to cool them are mainly influenced by powerful computer hardware for AI workloads. Manufacturers are introducing large silicon chips to optimize the performance of artificial intelligence and high-performance computing workloads. The use of powerful GPUs in artificial intelligence and high-performance computing environments supports the need for data center cooling technologies.
• The increasing use of OTT and streaming services has led to a growth in data, fostering market development. Also, the increasing data from online streaming services such as Disney+ Hotstar, Hulu, and Netflix is expected to drive the demand for data center cooling systems.
• Market players are taking action to augment their consumer base by focusing on expanding their global footprint and service offerings. For instance, in March 2024, the intelligent power management company Eaton declared the North American launch of an innovative new modular data center solution for organizations that are seeking to rapidly fulfill the increasing requirements for machine learning, edge computing, and AI. Eaton's SmartRack modular data centers primarily combine IT racks, cooling, and service enclosures to build a performance-optimized data center solution for critical IT equipment with up to 150 kW of equipment load.
• The market's growth is expected to be hampered by the rising need for various adaptability requirements and power shortages worldwide. Also, factors like the use of inefficient cooling system designs, such as outdated infrastructure or poorly optimized layouts, leading to energy inefficiencies and increased operational costs, and rising energy prices, which might make the cooling expenses prohibitive, are some of the factors that can restrain the market growth during the forecast period.
• The COVID-19 pandemic negatively influenced a cooling market for data centers. However, in the post-COVID-19 period, the use of cloud services increased significantly, leading to the generation of massive amounts of data. This, in turn, is expected to drive the market's growth opportunities.

Data Center Cooling Market Trends

The Information Technology Segment is Expected to Witness the Highest Growth

• The exponential growth of data generated by information technology significantly necessitates efficient data centers, driving demand for advanced cooling solutions. As data centers expand to accommodate increasing workloads and storage demands, the heat generated becomes a significant matter of concern, creating a demand for effective cooling solutions.
• Innovative cooling technologies, like liquid cooling systems and airflow optimization techniques, are essential to maintaining optimal operating conditions. This surge in demand for data center cooling solutions is propelling the market's growth, with businesses investing in solutions like energy-efficient and sustainable cooling to mitigate costs and environmental impact while ensuring the uninterrupted performance of their overall IT infrastructure.
• The adoption of cloud storage has been increasing over the years. To provide more efficient work processes, cloud storage providers such as Microsoft, AWS, and Google are expanding their capacity to store in the cloud. These companies make their investments in hyperscale transactions. As a result, the demand for data center cooling systems is expected to grow due to the growth of Software-as-a-Service, enabling cloud storage providers to expand their capacity.
• Despite the rapid development of cloud services, there is considerable reliance on on-promise and hybrid data centers in the current market scenario. Also, the need for efficient data storage solutions is increasing due to the trend toward agile and DevOps operating frameworks in the IT sector.
• As of March 2024, there were 5,381 data centers in the United States, the highest worldwide. Around 521 were located in Germany, while 514 were located in the United Kingdom. Hence, with the rise in the number of data centers, the market is expected to witness significant growth throughout the forecast period.

The Asia-Pacific Region is Expected to Register Significant Growth

• The APAC region is estimated to witness the fastest growth rate during the forecast period, mainly due to the rapid development of the network infrastructure. The demand for data generation is increasing in the region, and government policies are promoting more energy-efficient infrastructure, especially in countries like India and China. Also, advancements in technologies such as AI-driven cooling management and liquid cooling systems are reshaping the landscape, driving further adoption in the region.
• China and Japan are among the most important countries that are expected to fuel the market's growth opportunities significantly based on their ongoing recent innovations and developments in domains like IoT, ML, and AI. Moreover, the rapidly growing number of data centers in these countries, along with the government policies to promote more environmentally sound infrastructure across the region, is driving the need for better and more effective cooling solutions within these data centers.
• For instance, in April 2024, GDS, an operator and developer of high-performance data centers in Asia, and Gaw Capital Partners, a private equity fund management firm especially focusing on the real estate markets in the Asia Pacific and other high barrier-to-entry markets worldwide, signed a strategic partnership to build a 40 megawatts (MW) data center campus in Tokyo, Japan.
• The Asia Pacific region's data center cooling solutions market is primarily fueled by the exponential growth of data consumption and cloud services. As businesses expand their digital infrastructure, the demand for efficient cooling systems to maintain optimal operating temperatures increases. Additionally, stringent regulations regarding energy efficiency and environmental sustainability encourage the adoption of innovative cooling technologies. With emerging economies investing heavily in IT infrastructure, the need for reliable and scalable cooling solutions further fuels market growth.
• In December 2023, the Australian cloud service provider ResetData launched a test and simulation lab for its pioneering liquid-cooled data center server technology. This was one of the first facilities in the Asia-Pacific region capable of trialing workloads in a liquid-cooled environment. This step empowered local businesses to utilize a more ecologically friendly and high-performance Infrastructure-as-a-Service (IaaS) that is essential for strenuous applications like AI and machine learning.

Data Center Cooling Industry Overview

The data center cooling market is fragmented in nature, with the presence of several major players. With the increasing focus on innovation, the demand for new technologies is growing, which, in turn, is driving investments for further developments. Key players in the market include Daikin Industries Ltd, Schneider Electric SE, and Mitsubishi Electric Corporation.

• March 2024: Boreas Technology, a specialist in data center cooling technologies, developed the Rear Door Cooling Device, which is designed for high-density environments. This innovation provides precision cooling with up to 50 kW capacity. Efficiency, sustainability, and industry-leading standards are offered with the rear door cooling device. This also allows efficient operation for cabinets expected to operate at high capacity and density in data centers, enabling effective heat management.
• January 2024: Modine, a diversified global provider of innovative thermal management solutions, purchased the intellectual property and other specific assets of TMG Core, a specialist in single- and two-phase liquid immersion cooling technology for data centers with high-density computing requirements.

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