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Data Center HVAC Systems Market Value

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SOURCE RESEARCH

Optimizing Data Center Infrastructure: Market Sizing Thermal Management & Energy Consumption

Market Data | 4Q 2024 | MD-CSDS-101

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Digital Transformation Ramps Up Data Center Energy Consumption

The data center cooling market is rapidly evolving to meet the increasing thermal demands of modern data centers driven by Artificial Intelligence (AI) and digital transformation. As rack densities exceed 50 kilowatts (kW) per rack, advanced cooling solutions are becoming essential to maintain operational efficiency and sustainability.

ABI Research forecasts that data center energy consumption will reach 1,479 Terawatt Hours (TWh) in 2030, with a 14% CAGR from 575 TWh 2023 in line with industry experts and the International Energy Agency’s predictions. Currently, 1,500 hyperscaler DCs with large facilities are consuming over 30 Megawatts (MW) to 40 MW each, globally consuming 200 TWh in 2023 and forecast to reach over 3,400 DCs consuming 381 TWH. Hyperscalers are facing increased regulation to curb energy & water consumption, reaching 100% renewable targets before 2030 and adopting sustainable practices that pave the wave for other DC operators.

Liquid Cooling is the Fastest-Growing HVAC System for Data Center Operators

ABI Research has sized the market for DC HVAC hardware to grow from US$6.7 billion in 2023 to US$16 billion in 2030, with an advancing CAGR of 14%. Traditional air-cooled systems dominate the market, accounting for 95% of deployments in 2023, but the adoption of innovative methods like liquid cooling and hybrid systems is on the rise. However, liquid cooling solutions, including server-level immersion cooling, are set to grow significantly. Their adoption is expected to increase from 20% of data centers today to over 55% by 2030. This is driven primarily by hyperscale facilities.

Liquid cooling solutions, often used alongside air-cooled HVAC systems, improve energy efficiency by addressing heat generation more effectively, particularly in high-performance computing and AI-intensive environments. Hybrid cooling systems, such as free cooling in colder climates (e.g., Nordics), are also gaining traction to supplement traditional approaches.

Market Shares

In 2023, the total data center cooling market was valued at US$17.45 billion, encompassing hardware, software, and professional services. Leading players include Johnson Controls, Schneider Electric, and Vertiv, which collectively hold over 30% market share. Another 47% is dominated by established commercial HVAC providers, highlighting the integral role of traditional cooling technologies in data center infrastructure. Emerging solutions like liquid cooling and allied digital technologies each account for 8% of the global market.

A pie chart of the data center cooling market shares by company in 2023