Data Center Cooling Market Size, Share, and Trends Analysis, By Cooling Type (Air Cooling, Liquid Cooling), By Cooling Technique (Rack-Based Cooling), By Data Center Type (Centralized Data Center), By Containment (Raised Floor with Containment), By Industry Vertical (IT and Telecom), and By Region, Forecast 2025-2032

Data Center Cooling Market Overview and Key Insights:

The global data center cooling market reached USD 15.28 billion in 2024 and is expected to register a revenue CAGR of 16.2% during the forecast period. Rapid expansion of data centers, increasing need for energy efficiency and sustainability, growing expansion of colocation and cloud service providers, and increasing shift to high-density racks in data centers are expected to drive revenue growth of the market.

Market Drivers:

Rapid expansion of data centers is the major factor driving revenue growth of the market. The demand for high-performance data processing and storage has surged in recent years owing to the rising adoption of cloud computing and big data analytics among organizations. It creates high demand for high-performance data processing and storage, resulting in the construction of large-scale, high-density data centers. As of March 2025, the United States led globally with a total of 5,426 data centers, the highest number among all countries. Germany followed with 529 data centers, while the United Kingdom closely trailed with 523 facilities. These facilities generate substantial heat. It necessitates efficient and reliable cooling solutions to maintain optimal operating conditions and prevent downtime, which drives revenue growth of the market.

In February 2025, Modine, a global leader in thermal management technologies and solutions, announced it had secured USD 180 million in orders for its Airedale by Modine data center cooling systems from a new client who is an AI infrastructure leader. The high-capacity systems are specifically engineered to support the client’s goal of delivering scalable, cost-efficient, and sustainable cooling solutions for AI-driven applications through the development of large, building-optimized data centers. Such large-scale investments highlight how the proliferation of AI and high-density data centers is directly contributing to increased spending on innovative cooling infrastructure and contributing to the revenue growth of the market.

Market Opportunity:

Integration of Artificial Intelligence (AI) and machine learning for predictive cooling management is creating significant opportunities for the market. These technologies allow real-time monitoring and analysis of temperature patterns, workload distribution, and equipment performance to proactively adjust cooling systems. It reduces energy consumption and operational costs. AI-driven solutions enhance reliability, extend equipment lifespan, and support sustainability goals. This shift towards intelligent cooling infrastructure opens a new avenue for innovation and revenue generation in the data center cooling market.

In April 2025, SK Telecom, a leading South Korean telecommunications company, is expanding its presence in the AI infrastructure sector through a new Memorandum of Understanding (MoU) with Giga Computing, a liquid cooling technology expert, and SK Enmove. The collaboration aims to co-develop advanced cooling solutions specifically designed for AI-intensive workloads. Under the agreement, Giga Computing will provide its specialized knowledge in liquid cooling systems, while SK Enmove will supply premium, energy-efficient cooling fluids engineered to support scalable, reliable, and sustainable operations in large-scale data center environments.

Recent Trends:

One recent trend in the data center cooling market is the growing investment in advanced cooling technologies, such as liquid cooling, immersion cooling, and energy-efficient HVAC systems. In February 2025, for instance, Carrier Global Corporation, a worldwide leader in intelligent climate and energy solutions, announced that its venture arm, Carrier Ventures, is spearheading an investment and strategic technology partnership with ZutaCore. It is an innovative company known for its breakthrough two-phase direct-to-chip liquid cooling technology designed for data centers. This trend is significantly boosting the demand for data center cooling solutions and driving revenue growth of the market.

Restraints & Challenges:

Supply chain disruptions and equipment lead times represent a significant barrier to the revenue growth of the data center cooling market. Delays in sourcing critical components, such as compressors, heat exchangers, and specialized cooling fluids, are impacting the timely delivery and deployment of cooling systems in new and existing data centers. Additionally, uncertainty in global logistics and increased material costs are forcing vendors to postpone or scale back infrastructure investments.

For instance, according to recent company earnings calls, supply chain constraints are hindering revenue growth for major U.S. data center developers, hyperscalers, and posing a risk to the nation’s advancement in artificial intelligence innovation. These challenges stem from shortages in key resources such as semiconductors, power supply, and available land. To address these issues, the data center ecosystem must find ways to scale effectively and maintain operational flexibility while navigating ongoing constraints.

Impact of U.S. Tariff:

​U.S. tariffs are exerting considerable pressure on the data center industry and also impacting the data center cooling market. The tariffs are expected to affect key providers of computing, cooling, and power infrastructure. Imports from regions such as the European Union (20%), South Korea (24%), Japan (25%), Taiwan (32%), and particularly China, with tariffs reaching as high as 125%. The imposition of tariffs on imported components, such as HVAC systems, cooling units, and power infrastructure, has led to increased costs for developing and operating data centers. For instance, tariffs on steel and aluminum directly affect the price of transformers and other essential cooling components.

Despite these challenges, the data center market demonstrates resilience, driven by robust demand for AI, cloud computing, and digital transformation. However, the long-term implications of sustained tariffs could slow innovation and lead to further consolidation, as smaller players struggle to compete in an environment of rising costs and supply chain volatility.

Cooling Type Segment Insights and Analysis:

Based on the cooling type, the data center cooling market is segmented into air cooling and liquid cooling. Air cooling is further sub-segmented into air conditioner, air handling unit, chiller, cooling tower, economizer system, and others. Liquid cooling is further sub-segmented into direct-to-chip liquid cooling, immersion cooling, and rear-door heat exchanger

Liquid cooling segment is expected to register a fast revenue growth rate during the forecast period due to the rising demand for High-Performance Computing (HPC), AI workloads, and hyperscale data centers. All of these generate substantial heat densities that air cooling systems struggle to manage efficiently. Liquid cooling technologies, such as direct-to-chip and immersion cooling, offer superior thermal management, reduced energy consumption, and enhanced cooling efficiency, reportedly up to 3,000 times more efficient than air-based systems.

In recent times, data center operators are increasingly adopting liquid cooling as a more efficient alternative to traditional methods. For instance, Equinix intends to implement liquid cooling solutions in 100 of its data centers across 45 cities. Digital Realty has also introduced a high-density colocation service enabled by liquid cooling. It is capable of supporting workloads of up to 70 kilowatts (kW) per rack. Tech leader Nvidia is also embracing this shift, engineering its upcoming server architectures with liquid cooling in mind to effectively dissipate the substantial heat produced by its CPUs and GPUs. These strategic moves by industry leaders are significantly driving revenue growth of this segment.

Cooling Technique Segment Insights and Analysis:

Based on cooling technique, the data center cooling market is segmented into room-based cooling, row-based cooling, and rack-based cooling.

Room-based cooling segment contributed the largest share in 2024 due to the widespread adoption of legacy data centers and medium-scale enterprise facilities. Room-based cooling systems, such as CRAC and CRAH units, are well-established and provide a centralized, reliable, and relatively simple method for maintaining optimal temperatures across entire server rooms.  Additionally, continuous improvements in airflow management and energy efficiency are helping to extend the viability of room-based cooling systems, particularly in facilities where rack densities remain moderate.

In November 2024, Lennox, a company known for its air conditioning and heating solutions, established a dedicated data center business unit. This strategic move allows Lennox to broaden its portfolio by delivering innovative and sustainable cooling solutions tailored to the data center sector across Europe, the Middle East, and Africa (EMEA). The company is now set to offer a comprehensive range of products, including close control units, computer room-based air handler units, fan wall systems, cooling distribution units, chillers, and dry coolers. This type of move reinforces confidence and fuels revenue growth of this segment.

Containment Type Segment Insights and Analysis:

Based on containment, the data center cooling market is segmented into raised floor with containment and raised floor without containment. Raised floor with containment segment further sub-segmented into Hot Aisle Containment (HAC) and Cold Aisle Containment (CAC).

Raised floor with containment segment contributed the largest revenue share in 2024 due to the increasing need for efficient airflow management and energy optimization in modern data centers. This configuration allows for the precise delivery of cooled air through underfloor pathways while using hot or cold aisle containment systems to prevent air mixing. It significantly improves cooling efficiency and reduces energy consumption.  Additionally, the growing emphasis on achieving lower Power Usage Effectiveness (PUE) and meeting sustainability goals is prompting data center operators to adopt solutions that enhance cooling precision and system control.

Raised floor without containment segment is expected to register a fast revenue growth rate during the forecast period due to its longstanding use in legacy data centers and its cost-effectiveness for low to medium-density environments. These systems utilize the underfloor plenum to distribute cooled air to server racks. It provides a straightforward and flexible cooling infrastructure that is well-understood and easy to maintain. Many traditional data centers, particularly in developing regions or in organizations with limited budgets, still rely on this approach as it avoids the additional investment required for containment structures.

Geographical Outlook:

Data Center Cooling market is strategically segmented by geography to provide a comprehensive understanding of regional market dynamic. Discover demand analysis, emerging trends, and growth opportunities shaping market performance across different region and countries.

North America Data Center Cooling Market:

Market in North America accounted for largest revenue share in 2024 due to the high concentration of hyperscale data centers, rapid adoption of cloud computing, and expansion of AI and big data workloads in the region, especially in U.S. and Canada. Data centers are expected to contribute to 44% of the increase in U.S. electricity demand through 2028 and could use as much as 9% of the nation’s total power supply by 2030. It raises concerns about their effect on power availability and energy costs. Data center operators are under increasing pressure to adopt energy-efficient and sustainable cooling technologies to reduce operating costs and manage power consumption effectively. This has accelerated investment in advanced solutions such as liquid cooling, AI-based thermal management, economizers, and high-efficiency CRAH/CRAC systems.

According to the National Renewable Energy Laboratory, cooling systems account for up to 40% of a data center’s electricity consumption, making enhanced cooling efficiency a key focus in efforts to reduce overall energy usage. Moreover, cooling plays a critical role in data center infrastructure, shaping how these facilities are designed, constructed, and upgraded. These factors, combined with regulatory scrutiny and environmental goals, are fueling strong demand for innovative and scalable cooling solutions in the region.

In addition, the presence of major tech giants such as Amazon, Microsoft, Google, and Meta, each investing heavily in building and expanding data infrastructure, has significantly increased demand for efficient and scalable cooling solutions. Various significant developments emerged in the field of data center cooling in recent years. In December 2024, for instance, Microsoft and Schneider Electric unveiled their respective designs for advanced liquid cooling systems aimed at efficiently supporting the growing thermal demands of high-performance AI chips. The involvement of tech giants boosts market confidence and accelerates the investment and deployment of advanced cooling infrastructure across the region, and boosts revenue growth of the market.

Asia Pacific Data Center Cooling Market:

Asia Pacific is expected to register a fast revenue growth rate during the forecast period due to the rapid expansion of digital infrastructure, widespread adoption of cloud services, and the proliferation of AI, IoT, and big data applications. Countries such as China, India, Japan, and Singapore are at the forefront, with significant investments in data center facilities to meet the rising demand for data storage and processing.​ Beijing ranks as the largest data center market in the Asia-Pacific region and holds the second position across the globe, with a total power capacity of 1,799 megawatts. Following closely is Singapore, which stands as the second-largest market in the region and fourth globally. Tokyo and Shanghai occupy the third and fourth spots, respectively, among Asia-Pacific’s top data center markets.

China has allocated more than 43.5 billion yuan (USD 6.12 billion) in recent years toward a national initiative aimed at developing computing data centers. This significant investment aligns with China’s efforts to strengthen its domestic computing capabilities amid growing export restrictions from the United States. As part of the project, over 1.95 million server racks have been installed, with around 63% of them actively operational. This strategic shift addresses the increasing demand for advanced cooling solutions and boosts revenue growth of the market in this region.

Europe Data Center Cooling Market:

Market in Europe accounted for a significant revenue share in 2024 due to the increasing adoption of cloud computing, and the integration of advanced technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT). Countries like the United Kingdom, Germany, France, and Spain are witnessing substantial investments in data center facilities to meet the rising demand for data storage and processing capabilities.​ This surge in data center construction has led to higher heat densities, necessitating the deployment of efficient and sustainable cooling solutions.  As of December 2025, Germany holds the top position in Europe with 529 data centers, slightly surpassing the United Kingdom, which has 523 facilities. France follows in third place, hosting 322 data centers nationwide.

In April 2025, NorthC, a regional data center provider in northwestern Europe, expanded its presence in the Benelux and DACH regions by acquiring six data centers from Colt Technology Services in Germany and the Netherlands. These facilities, situated in key metropolitan areas such as Frankfurt, Berlin, Hamburg, Munich, Dusseldorf, and Amsterdam, collectively provide over 25 megawatts (MW) of available power, as stated in the official announcement. This expansion reflects a broader trend driving revenue growth in the European data center cooling market.

Competition Analysis:

The data center cooling market is characterized by a consolidated structure, with few players competing across various segments and regions. List of major players included in the Data Center Cooling market report are:

• Asetek Inc.
• Vertiv Holdings Co.
• Iceotope
• Schneider Electric
• Green Revolution Cooling
• STULZ GMBH
• LiquidStack
• ABB Ltd
• Huawei Technologies
• Munters
• Usystems
• Asperitas
• Submer
• Lennox
• Nortek Air Solutions

Strategic Developments in Data Center Cooling Market:

• On 17 April 2025, Fujitsu announced a partnership with Supermicro Inc. and Nidec Corporation to increase energy efficiency in data centers. Through this collaboration, the companies will integrate Fujitsu’s liquid-cooling monitoring and control software, Supermicro’s high-performance GPU servers, and Nidec’s advanced liquid-cooling systems. The goal is to develop a comprehensive service that improves Power Usage Effectiveness (PUE) in data centers. Fujitsu plans to evaluate the performance at its Tatebayashi Data Center. It helps their clients to achieve world-class PUE standards.
• On 15 April 2025, LG Electronics (LG) unveiled a wide range of cooling solutions during its debut at the Data Center World (DCW) 2025 conference in Washington, D.C. The company presented a suite of advanced data center cooling technologies, including high-performance chillers, air- and liquid-based server cooling systems, and the LG Building Energy Control (BECON) platform. LG aimed to expand its footprint in North America’s rapidly growing data center market with its high-efficiency Direct-to-Chip (D2C) cooling technologies and AI-powered control software.

Key Advantages for Stakeholders:

Navistrat Analytics’ industry report provides an in-depth quantitative analysis of various market segments, historical and current trends, market forecasts, and dynamics within the global market. The historical years covered in this report are 2022 to 2023, with 2024 serving as the base year for market size calculations. The forecast period extends from 2025 to 2032.

The report includes an executive summary and a comprehensive overview of market drivers, restraints, opportunities, and challenges (DROC), along with insights into regulatory standards. It features detailed analyses such as PORTER’s Five Forces, SWOT, and PESTLE, as well as assessments of technological trends and the competitive landscape.

PORTER’s Five Forces analysis helps stakeholders evaluate the impact of new entrants, competitive rivalry, supplier power, buyer power, and substitution threats, enabling them to assess the level of competition and the attractiveness of the global market. The competitive landscape provides stakeholders with a clear understanding of the current market positions of key players, offering valuable insights into their competitive environment.

Scope And Key Highlights of The Data Center Cooling Market Report:

 The Data Center Cooling market report offers a detailed analysis of market size, including historical revenue (in USD Billion) data for 2022-2023 and revenue forecasts for 2025-2032 across the following segments:

• Cooling Type Outlook (Revenue, USD Billion; 2022-2032)
  • Air Cooling
    • Air Conditioner
    • Air Handling Unit
    • Chiller
    • Cooling Tower
    • Economizer System
    • Others
  • Liquid Cooling
    • Direct-to-Chip Liquid Cooling
    • Immersion Cooling
    • Rear-door Heat Exchanger

• Cooling Technique Outlook (Revenue, USD Billion; 2022-2032)
  • Room-Based Cooling
  • Row-Based Cooling
  • Rack-Based Cooling

• Data Center Type Outlook (Revenue, USD Billion; 2022-2032)
  • Centralized Data Center
    • Enterprise Data Centers
    • Colocation Data Centers
    • Hyperscale Data Centers
  • Edge Data Centers

• Containment Outlook (Revenue, USD Billion; 2022-2032)
  • Raised Floor with Containment
    • Hot Aisle Containment (HAC)
    • Cold Aisle Containment (CAC)
  • Raised Floor without Containment

• Industry Vertical Outlook (Revenue, USD Billion; 2022-2032)
  • IT and Telecom
  • Retail
  • Healthcare
  • Media and Entertainment
  • BFSI
  • Energy
  • Others

• Regional Outlook (Revenue, USD Billion; 2022-2032)
  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • U.K.
    • Italy
    • Spain
    • Benelux
    • Nordic Countries
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Oceania
    • ASEAN Countries
    • Rest of APAC
  • Latin America
    • Brazil
    • Rest of LATAM
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Israel
    • Turkey
    • Rest of MEA

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