As AI computing becomes ubiquitous, the demand for liquid cooling has surged dramatically.
According to Omdia, the data center thermal management market has surged to $7.67 billion, outpacing previous forecasts.
The research firm said this “unprecedented growth” is poised to continue with a robust CAGR of 18.4% until 2028. This surge will be fueled by AI-driven demands and innovations in high-density infrastructure, marking a pivotal moment for the industry.
Omdia noted several key trends in the data center cooling space, including the rapid adoption of Rear Door Heat Exchangers (RDHx) combined with 1-P direct-to-chip cooling, which achieved 65% year-over-year growth and frequently integrated heat reuse applications. Also, the reporting period of 2023 to 2028 sees a strategic blend of air and liquid cooling technologies, creating balanced and efficient thermal management.
Market consolidation
As demands continue to rise, the global data center cooling market will consolidate more throughout 2023.
The research firm expanded its vendor coverage in its report to 49 companies, up from 40, adding Chinese OEMs and direct liquid cooling component suppliers.
Shen Wang, principal analyst of Omdia, said that amidst the consolidation, “Vertiv, Johnson Controls, and Stulz retained their top three positions, with Vertiv notably gaining 6% market share due to strong North American demand and cloud partnerships."
Overcoming supply chain issues
Like other markets, the data center cooling is not immune to supply chain issues.
Omdia noted that slow production capacity, particularly for components like Cooling Distribution Units (CDUs), rather than a lack of demand, contributed to slower data center cooling market growth. Several supply chain players struggled to address market needs, causing component shortages.
However, the research firm said that this year will see improvements that will help suppliers overcome supply chain issues, enabling them to fulfill previously delayed orders.
During this time, liquid cooling adoption saw robust growth, particularly in North America and China, with new vendors entering the market. In this near $1 billion liquid cooling market, direct-to-chip vendor CoolIT remains the market leader, followed by immersion cooling leader Sugon and server vendor Lenovo.
AI's growing influence and sustainability requirements drive a surge in data center thermal management. However, Omdia pointed out that the industry has to reconcile supply chain constraints in liquid cooling and embracing sustainable practices.
The future of the data center cooling market will be shaped by the integration of AI-optimized cooling systems, strategic vendor partnerships, and a continued push for energy-efficient and environmentally friendly solutions. By resolving these issues, Omdia said the industry will set itself on a growth path and “establish thermal management as a cornerstone of sustainable and efficient data center operations, aligning technology with environmental stewardship.”
"Data center cooling is projected to be a $16.8 billion market by 2028, fueled by digitalization, high power capacity demand, and a shift towards eco-friendly infrastructure, with liquid cooling emerging as the biggest technology in the sector," said Wang.
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Sean Buckley
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