Do you know that global emissions from cloud computing range from 2.5% to 3.7% of all global greenhouse emissions? It has been estimated that almost 10,970 data center locations globally as of December 2023. Researchers have suggested various types of data center cooling methods such as evaporative cooling, geothermal cooling, liquid cooling, etc. Out of all of these, liquid cooling for data centers have become extremely popular.
Whether it’s managing the thermal load of AI accelerators or supporting HPC clusters, this technology is becoming the backbone of modern data centers. According to a survey by Research Nester, the use of liquid cooling in data centers is expected to nearly double from 21% in early 2024 to 39% by 2026. Additionally, it has been estimated that data centers that use cooling systems reduced their total data center power consumption by almost 10%. Let’s dive into what’s really driving its adoption and where the industry is heading next.
Market Dynamics: Why Liquid Cooling is The Best Choice
The demand for liquid cooling has shot up as edge computing, AI workloads, and high-frequency trading systems push power densities through the roof. In traditional data centers, the power density is typically around 5-10 kW per rack. But today, with racks housing AI processors or running complex simulations, we’re looking at 40-125 kW/rack, and in some cases even beyond 200 kW. At these densities, conventional air cooling becomes not just impractical but a significant bottleneck.
Moreover, hyperscalers and colocation providers are scrambling for solutions to address stringent regulations on energy consumption and sustainability. For instance, the European Union’s push toward data center sustainability standards by 2025 is forcing operators to reconsider cooling designs that are 30- 40% more energy efficient than current standards and aimed at reducing energy consumption by 11.7% between 2020 and 2030. That’s where liquid cooling enters, with a promise to reduce power usage effectiveness (PUE) to sub-1.1 levels. Liquid cooling reduces energy consumption by up to 90%.
Going Deep: Immersion vs. Direct-to-Chip Liquid Cooling
Now, let’s talk shop. There are two dominant architectures in liquid cooling: immersion cooling and direct-to-chip cooling. Each has its niche, and depending on application demands, you might opt for one over the other.
Direct-to-Chip Cooling: this involves pumping a coolant-typically a dielectric fluid or even water, depending on the setup-through microchannels directly integrated into cold plates mounted on CPUs and GPUs. The heat is absorbed right at the source and then expelled to an external heat exchanger. It’s effective for high-power processors but has challenges like fluid distribution uniformity and potential leakage points, which are critical in environments like high-frequency trading where uptime is sacrosanct.
It is estimated that, within the next two years, about 40% of IT workers anticipate that some of their equipment will be dependent on immersion or direct-to-chip cooling.
Immersion cooling: On the flip side, immersion cooling submerges entire servers into a non-conductive fluid. This method excels in ultra-high-density applications (think AI training farms). Here, the entire thermal footprint of the server is managed uniformly. But achieving consistency across racks and ensuring the maintenance is quick and safe can be a challenge. Multi-phase immersion, where the fluid changes phase and transfers heat away via evaporation and condensation, offers a high thermal efficiency but complicates fluid management and requires specialized condensers. Moreover, between 40 and 50 % of the energy used in data centers is used by IT equipment, with the remaining 30 to 50 % going toward cooling systems, thus promoting growth.
Tech Advancements: Where’s the Innovation Happening?
Coolant Formulations: OEMs are now working closely with chemical manufacturers to engineer coolants with improved thermal capacity and lower viscosity. Fluorocarbon-based coolants are common in immersion systems, but we’re seeing a shift towards non-flammable, environmentally friendly alternatives such as Novec engineered fluids that are tailored for better thermal stability.
Cold Plate Microchannel Design: A big focus is on optimizing the geometry of the microchannels within cold plates. CFD ( Computational Fluid Dynamics) models are used extensively to minimize pressure drops and turbulence, ensuring maximum contact time with the heated surface. This is critical when dealing with next-gen 7nm or 5nm processors that have heat flux densities pushing past 1kW/cm2
Manifold & Quick-connect Designs: Quick-connect couplings have evolved to minimize the potential for leaks and reduce insertion force. Modern systems use zero-lea seals that are crucial when designing modular racks. Innovations in manifold designs are also making fluid distribution more consistent across multi-rack setups, ensuring that flow rate and temperature remain uniform.
Market Focus: Who’s Leading?
The Data Center Liquid Cooling market is witnessing rapid growth driven by the rising power densities of modern servers, increased deployment of AI workloads, and the inefficiency of traditional air-cooling systems at managing heat in high-density environments. With global data centers pushing for sustainability and energy efficiency, liquid cooling technologies- such as direct-to-chip and immersion cooling- are gaining traction to reduce PUE and enhance cooling performance.
Moreover, according to forecasts, the data center liquid cooling industry is expected to grow from its estimated valuation of USD 2.64 billion in 2023 to USD 37.84 billion by the end of 2036, with a compound annual growth rate of around 25.1% between 2024 and 2036.
The industry is growing as a result of the growth of data centers, particularly hyperscale data centers. As of December 2023, there were roughly 10,978 data center locations worldwide. Additionally, as of March 2024, there were a reported 5,381 data centers in the United States, the most of any country worldwide. A further 521 were located in Germany, while 514 were located in the United Kingdom.
The liquid cooling market is currently led by specialized players like Asetek, CoolIT Systems, and Submer Technologies, who focus on both direct-to-chip and immersion cooling solutions. Hyperscalers like Google and Microsoft are aggressively piloting liquid cooling in select locations, focusing on AI and high-performance computing (HPC) clusters.
For instance, in July 2024, Microsoft embraced liquid cooling directly onto chips and is investigating microfluidics. Over a million cubic meters more of water were used by the corporation last year. By 2030, Microsoft wants to be water-positive. The corporation stated that it used 6.4 million cubic meters of water in 2022, mostly for its cloud data centers, in its 2023 ESG report. That amount had gone up to 7.8 million cubic meters for 2023 in its 2024 projection.
Meanwhile, traditional players like Schneider Electric and Vertiv are integrating liquid cooling into their portfolios, either through acquisitions or partnerships.
As a case in point, Schneider ElectricTM and Chilldyne, a leader in liquid cooling technologies for data centers, have formed an Alliance Partnership. To improve the sustainability and efficiency of data centers, Schneider Electric will provide the Chilldyne Negative Pressure Liquid Cooling Solution through the partnership, completing its entire line of Uniflair cooling and chiller systems.
In Japan, firms like NEC Corporation and Fujitsu are taking a conservative but steady approach, primarily focusing on R&D. Their innovations center around minimizing maintenance costs and integrating liquid cooling with existing air-cooled infrastructures to create hybrid systems. It’s a smart play, given the risk-averse nature of many Japanese data center operators.
In November 2023, Fujitsu and SoftBank Corp. announced the completion of a nationwide all-optical network in Japan using a disaggregated architecture optical transmission system. They aim to create greener networks with reduced environmental impact.
The Road Ahead: Opportunities and Obstacles
There’s no doubt that the liquid cooling market is in a state of rapid evolution. But it’s not all smooth sailing. There are real barriers to adoption, especially around standardization. Each vendor has its propriety interfaces, making interoperability a challenge. Furthermore, cost remains a sticking point. High upfront CAPEX for plumbing retrofitting, and the logistics of fluid handling deter small-scale adopters.
However, as rack densities continue to rise air cooling’s inefficiencies will outweigh the costs of transitioning to liquid. And let’s not overlook sustainability-liquid cooling can significantly cut water usage when integrated and heat reuse systems, making it a long-term solution for eco-conscious operators.
In the end, the focus should be on optimizing designs that balance thermal efficiency with cost-effectiveness and scalability. Whether you’re looking at direct-to-chip or immersion, the goal is to keep thermal resistance as low as possible while ensuring easy maintenance and minimizing potential failure points. After all, we’re talking about the core infrastructure that keeps mission-critical applications running 24/7 -every decision matters. Moreover, the industry is poised to become the new standard in advanced computing environments.
Source: www.researchnester.com/reports/data-center-liquid-cooling-market/4747
