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Market Overview

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The global data center liquid cooling market experienced a valuation of $1.81 billion in 2020 and is expected to grow at a CAGR of 27.3%, reaching $7.72 billion by 2026. This growth can be attributed to the rising concerns over water scarcity and the increasing number of edge, colocation, and hyper data centers.

Data centers serve as facilities that house storage servers, networking devices, and other critical hardware for connectivity. They are utilized as an alternative to on-premise computer systems, reducing operational costs for consumers. With the growing demand for data processing and the widespread use of smart devices and internet applications, the need for data centers has increased significantly. Consequently, data center operations and standard operating procedures have become crucial for these large-scale facilities. One key factor in achieving efficiency in data centers is the Power Usage Effectiveness (PUE), which measures the effectiveness of a data center in terms of energy usage. Any changes in server load or power consumption directly impact the PUE.

The data center liquid cooling market is currently in a phase of growth. Cooling is an essential aspect of data center operations since servers and networking devices operate continuously, generating heat that, if not controlled, can lead to outages. The adoption of liquid cooling technologies is expected to be driven by initiatives such as reducing water scarcity, climate action, sustainable urban infrastructure, and recycling and reusability, in line with the United Nations Sustainable Development Goals (SDGs). As the number of data centers continues to increase, the utilization of data center liquid cooling techniques is also set to rise.

Data center liquid cooling significantly influences thermal management techniques through the use of dielectric coolants, which can be applied in high-density data centers. These coolants allow for the deployment of CPU and GPU clusters in close proximity within high-density configurations, safeguarding critical components from thermal and environmental risks. Moreover, data center liquid cooling serves as a bridge between traditional and future data centers. It not only enhances the efficiency of data infrastructure systems but also significantly reduces energy consumption, leading to cost savings and a smaller carbon footprint.

Although the COVID-19 pandemic caused a slight decline in revenue in 2020, the market has gradually recovered in 2021. Data center liquid cooling companies have implemented strategies to bounce back from this crisis, and as a result, the global data center liquid cooling market is expected to exhibit robust growth in the future. This is further supported by a 34% increase in data usage compared to pre-pandemic levels.

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Market Segmentation

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The market is segmented based on various factors, including end-use industry, data center type, solution, and region.

Segmentation by End-Use Industry
IT and Telecom
Banking, Financial Services, and Insurance (BFSI)
Government and Public Sector
Manufacturing
Healthcare
Retail
Others

Segmentation by Data Center Type
Hyperscale
Colocation
Enterprise
Others

Segmentation by Solution
Indirect Cooling
Direct Cooling

Segmentation by Region
North America – U.S., Canada, and Mexico
Europe – Germany, France, Spain, Italy, Switzerland, Netherlands, and Rest-of-Europe
China
U.K.
Asia-Pacific – South Korea, India, Japan, Australia, Singapore, and Rest-of-Asia-Pacific
Rest-of-the-World – Middle East and Africa and South America

The IT and telecom segment holds a dominant position in the data center liquid cooling market. This is attributed to the introduction of new technologies such as 5G, IoT, virtual and augmented reality, and artificial intelligence, which have led to increased data processing requirements in the telecommunications industry. Consequently, telecom data centers are evolving to handle high volumes of data and low latency needs. Additionally, the banking, financial services, and insurance (BFSI) segment is expected to exhibit the highest growth rate. Digitization efforts in the BFSI industry involve the utilization of cutting-edge technologies, leading to increased demand for data center cooling solutions.

The IT and telecom industry is not only the largest contributor to the overall demand for data centers but also to the market for data center liquid cooling. This industry relies heavily on data transmission and processing, generating significant amounts of data from data-intensive applications. The IT and telecom sectors are considered the backbone of other industries, as effective communication is crucial for the growth of a modern economy. Similarly, the BFSI industry plays a significant role in the economy, and ongoing dematerialization efforts are expected to further drive the demand for data centers.

Hyperscale data centers, which cater to cloud services and cloud computing applications, are experiencing higher demand compared to other data center types due to the ongoing trend and increasing migration towards cloud computing. Leading hyperscale operators like Alibaba, Microsoft, and Google have already embraced these technologies and are expected to drive the market further.

In terms of data center cooling methods, the indirect liquid cooling segment is projected to dominate the global market. Indirect liquid cooling is highly efficient, minimizing energy usage while maximizing chilling capabilities. However, the direct liquid cooling segment is witnessing higher growth due to emerging cooling solutions such as direct-to-chip and immersion technologies. In fact, direct liquid cooling is expected to have the highest compound annual growth rate (CAGR) of 33.49% during the forecast period of 2021-2026. The growing adoption of direct cooling technologies is driven by their experimental stage and potential to achieve higher efficiency. Data center operators and service providers are conducting pilot programs to validate the expected returns from such technologies, which is expected to boost their adoption. Moreover, direct cooling technologies, especially immersion cooling, can significantly reduce energy costs in cooling operations by approximately 90%, further stimulating market growth.

Europe dominated the data center liquid cooling market in 2020 and is projected to maintain its dominance throughout the forecast period. This growth is primarily attributed to the region’s emphasis on sustainable development, government initiatives promoting environmental protection laws and policies, widespread adoption of technologies supporting green initiatives, and ongoing digital transformation trends.

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Competitive Landscape

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The competitive environment in the data center liquid cooling market is characterized by various strategies employed by major players in the industry to establish their market presence. These strategies include launching new products, expanding business operations, and forming partnerships and collaborations.

Key companies profiled in this report include ALFA LAVAL, Asetek, Inc, Asperitas, Black Box, Boyd, Chilldyne, COOLIT SYSTEMS, DCX The Liquid Cooling Company, ExaScaler Inc, FUJITSU, Green Revolution Cooling, Inc, Iceotope Technologies Limited, LiquidStack and Allied Control, Motivair Corporation, Nortek Air Solutions, LLC, Rittal GmbH & Co. KG, Schneider Electric, Submer, Wiwynn, ZutaCore, JETCOOL Technologies Inc, CoolestDC, TMGcore, Inc., FLUIX Inc, Ferveret.

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Recent Industry Developments

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In March 2021, Submer and SYNNEX Corporation announced a collaboration. Under the agreement, Submer’s liquid cooling and edge-ready solutions will be manufactured in the United States and distributed by SYNNEX.

In March 2021, LiquidStack emerged from stealth mode with new deployments in crucial sectors including high-performance computing (HPC), cloud services, artificial intelligence (AI), edge computing, and telecommunications. The company also secured funding in a Series A funding round from its strategic partner, Wiwynn.

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Key Questions Answered

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What is the projected market size of the data center liquid cooling market during the forecast period of 2021-2026?

What are the expected future scenarios and revenue generation across different end-use industries, types of data centers, and solutions?

What are the anticipated future scenarios and revenue generation by different solutions and subtypes?

What are the expected future scenarios and revenue generation for the industry segments that utilize data center services?

Which region holds the largest market share in the data center liquid cooling market?

What are the projected future scenarios and revenue generation for different regions and countries in the data center liquid cooling market, such as North America, Europe, Asia-Pacific including Japan and China, the UK, and the Rest of the World?

What is the competitive strength of key players in the data center liquid cooling market based on an analysis of their recent developments, product offerings, and regional presence?

How do the key data center liquid cooling companies fare in competitive benchmarking based on market coverage and potential?

How do adoption scenarios, related opportunities, and challenges impact the data center liquid cooling market?

Which are the leading consortiums and associations in the data center liquid cooling market, and what role do they play in the market?

What are the market dynamics of the data center liquid cooling market, including market drivers, restraints, and opportunities, and what role do they play in the market?