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The global two-phase data center liquid immersion cooling market size was valued at USD 375.5 million in 2024. The market is projected to grow from USD 431.4 million in 2025 to USD 1,188.0 million by 2032, exhibiting a CAGR of 15.6% during the forecast period.
The global demand for two-phase data center liquid immersion cooling is increasing due to the ever-increasing need for computational power, especially with the rise of cloud services, edge computing, and various new technologies, which has brought significant attention to enhancing data center processing performance and energy efficiency, which drive the demand for the two-phase data center liquid immersion cooling. Liquid immersion cooling offers higher cooling efficiencies than traditional air cooling techniques, resulting in improved energy efficiency and reduced operational expenses. Moreover, the adoption of graphics processing units in data centers and hyper scale data centers creates the adoption of liquid cooling solutions, which contribute positively to market growth.
Major players such as Delta Electronics Inc (Delta Power Solutions), 3M, Giga-Byte Technology Co Ltd, The Chemours Company (Optional), and Green Revolution Cooling Inc., among others, are engaged in adopting expansion and adopted product launch and product development as a key developmental business strategy that supports small as well as hyper-scale data centers.
Post pandemic, the market experiences a rising demand for data center cooling solutions owing to the increasing data consumption and growing investment in upgradation and new data center infrastructure development. Moreover, rising global investment in data centers with growing demand for liquid cooling solutions fuels global two-phase data center liquid immersion cooling demand.
Increasing Computational Need for AI to Stimulate Effective Cooling Solution Demand
The impact of generative AI on the data center liquid cooling market is profound and multifaceted, primarily driven by the increasing computational demands associated with AI workloads. As organizations adopt AI technologies, they require more powerful hardware to process complex algorithms and large datasets, leading to significant changes in data center operations and cooling requirements. Generative AI applications, particularly those utilizing advanced GPUs and specialized processors, generate substantially more heat than traditional computing tasks. The growing emphasis on sustainability within the tech industry also influences the implementation of single-phase and two-phase cooling for AI. Thus, organizations striving to reduce their carbon footprints with efficient cooling solutions become essential.
Growing Demand for Hyper Scale and Cloud Computing Integration and 5G Infrastructure Boosts Market Growth
Data centers are witnessing significant growth, driven by the rapid expansion of hyperscale cloud computing and the deployment of 5G infrastructure. These trends are reshaping the data center industry, requiring innovative cooling solutions to meet increasing computational demands. Hyperscale data centers, which support cloud computing giants such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, are experiencing exponential growth. These facilities adopt advanced cooling systems to handle high-density workloads generated by AI, machine learning, and big data analytics. This trend indicates a robust future for two-phase data center liquid immersion cooling technologies as they become integral components of modern data center infrastructure.
Increasing Need for Data Center Energy and Cost Efficiency Drive Adoption of Advanced Immersion Cooling Solutions
As data centers expand to meet the demands of a digital world characterized by exponential data growth, traditional air cooling systems are becoming inadequate for managing the heat generated by high density computing environments. Two-phase data center liquid immersion cooling supports higher server rack densities, which is essential for maximizing space in urban data center environments where real estate is limited. As a result, organizations can achieve lower operational costs and improved energy efficiency, making two-phase immersion cooling an ideal solution due to its compact design and high processing density. All these advancements drive two-phase data center liquid immersion cooling market growth during the forecast period.
High Initial Capital Investments and Complex Implementation Restrict Market Growth
The major concerns, including the total cost of ownership of two-phase data center liquid immersion cooling systems, have encountered significant challenges, primarily due to high initial total costs. Transitioning to two-phase cooling necessitates significant changes to existing data center infrastructure, including the installation of specialized tanks and compatible IT hardware. Many facilities do not have the capacity for these modifications without extensive renovations, further increasing costs and complexity. There are ongoing concerns regarding the environmental impact of some dielectric fluids used in two-phase systems, which could affect regulatory compliance and acceptance within the industry. This uncertainty can deter investment in such technologies.
Technological Advancements in Two-Phase Immersion Cooling Drive Enhanced Energy Efficiency in Data Centers
Recent advancements in the development of advanced cooling fluids further enhance the effectiveness of two-phase data center liquid immersion cooling compared to single-phase immersion cooling. Innovations such as nanoparticle-infused fluids are being explored to improve thermal conductivity even further. These enhancements promise to reduce the power consumption for pumps and cooling systems, making immersion cooling an even more attractive option for data center operators. As demand for high-performance computing rises, scalability becomes critical for data center operators. In summary, the opportunity presented by technological advancements in two-phase data center liquid immersion cooling is substantial. By leveraging enhanced efficiency, innovative eco-friendly cooling fluids, scalability options, and alignment with sustainability goals, this technology is poised to redefine thermal management in data centers, expanding two-phase data center liquid immersion cooling market share in the long term.
Growing AI Workloads in Data Centers Fuels Solution Segment Expansion
By component, the market is classified into solution and services.
In component, the solution segment is dominating the market, growing exponentially driven by the growing adoption of Artificial Intelligence and big data technologies, which require enterprise servers. Moreover, the adoption of graphics processing units in data centers and hyperscale data centers creates the adoption of liquid cooling solutions, which contribute positively to the segment growth.
Explosive Demand For AI Workloads Is Driving The Adoption Due To Its Need For Advanced Thermal Management
By application, the market is classified into high-performance computing (HPC), edge computing, artificial intelligence (AI), cryptocurrency mining, and others (cloud gaming, OTT platforms, etc.).
However, the Artificial Intelligence (AI) segment is projected to exhibit the highest CAGR, fueled by the explosive demand for AI workloads that generate immense heat from increasingly dense computing hardware, necessitating the advanced thermal management that immersion cooling provides. This rapid growth in AI infrastructure, alongside the emergence of cryptocurrency mining and the evolving demands of applications like cloud gaming and OTT platforms within the "Others" category, collectively underscores the broadening applicability and increasing adoption of two-phase liquid immersion cooling as a solution for efficient, high-density data center thermal management.
In the application segment, the High-Performance Computing (HPC) segment holds the largest market share, as its substantial and long-standing heat loads make it a prime candidate for the superior cooling capabilities of two-phase immersion, which can reduce energy ‘
consumption by approximately 50% compared to air cooling.
Effective Cooling Need in Super-Computing Drive Fluorocarbon-Based Fluid Demand
Cooling fluid is further categorized into mineral oil, deionized water, fluorocarbon-based fluids, and synthetic fluids.
The market features various fluids, each with distinct advantages and disadvantages influencing adoption. Fluorocarbon-based fluids currently hold the largest market share due to their excellent thermal properties, high dielectric strength, chemical stability, and relatively long historical use in immersion cooling applications, making them a trusted choice for many large-scale deployments despite potentially higher costs and environmental concerns compared to some alternatives. Mineral oil offers a cost-effective and safe alternative with good performance, though its flammability requires specific safety measures. Deionized water provides superior thermal efficiency but faces challenges with conductivity, corrosiveness, and complexity. Meanwhile, the Synthetic fluids segment is projected for the highest CAGR, driven by demand for improved performance, lower environmental impact, and better safety profiles, spurred by sustainability focus and regulatory pressures, positioning them for significant future market growth.
Growing Investments in Large Data Centers to boost Segment Expansion
By data center type, the market is categorized into small and medium sized data centers and large data centers.
Large data centers remain the dominant segment owing to the rising number of data centers, including small as well as large data centers across the globe, which need more data center immersion cooling units for efficient controls. The upsurge in demand for two-phase data center liquid immersion cooling in large data centers for AI processing and capabilities enhances the growth of the market.
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Growing Need for Computational Infrastructure Bolsters Cloud Service Providers (CSPs) Segment Expansion
By end users, the market is classified into cloud service providers (CSPs), Colocation Data Center Providers, ISP & telco, and enterprise.
Cloud service providers (CSPs) are the dominant end users backed by the ever-increasing need for computational power, cloud services, edge computing, and various new technologies. It has brought significant attention to enhancing data center processing performance and energy efficiency, which drive the growth of the two-phase data center liquid immersion cooling. Further, expansion and upgradation of existing data center infrastructure create a substantial demand for cooling solutions across colocation data center providers, ISPs & telco, and enterprises.
North America Two-phase Data Center Liquid Immersion Cooling Market Size, 2024 (USD Million)
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The market size in North America was valued at USD 156.6 million in 2024 and continues to remain the largest market owing to strong economic growth and the availability of major manufacturers such as Boyd, Vertiv Holdings Co, and Green Revolution Inc. in North America, including the U.S., and Canada. Furthermore, growth in the spending on the IT & telecom sector, 5G sector, and cloud service providers rising demand for high energy supply for data centers in North America creates an ample demand for more liquid cooling solutions, which will grow two-phase data center liquid immersion cooling market size progressively.
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The U.S. in North America remains the dominant country due to the rising demand for high energy supply for data centers in North America, which creates the demand for more liquid cooling solutions and fuels the market growth. Further, the adoption rate of Artificial Intelligence (AI) in North America increased by 71% in 2024 as compared to 65% in 2023, which enhanced the growth for two-phase data center liquid immersion cooling across Canada.
Market growth in North America is attributed to high electricity costs and energy efficiency demand in countries such as Brazil, Argentina, and Chile. Data center operators are pushing toward more efficient cooling technologies, such as two-phase liquid immersion cooling solutions.
Europe is witnessing progressive growth due to the increasing adoption of two-phase liquid cooling solutions across small and hyper-scale data centers, owing to it being 95% energy efficient as compared to traditional air cooling solutions, which makes it attractive as a data center application to reduce power usage.
The Middle East & Africa region is witnessing steady growth, owing to the heavy investment in the expansion of data centers and cloud server plants, which boosts the demand for sustainable cooling solutions and caters to the market's growth. GCC, Turkey, North Africa, and South Africa are investing in digital infrastructure and expanding data center applications, which enhances the demand for sustainable cooling solutions and fuels the market's growth.
Asia Pacific is a rapidly growing region due to the increasing adoption of Artificial intelligence, machine learning, and 5G infrastructure practices in data center applications across India, Japan, and China, which enhance the demand for efficient liquid cooling solutions and fuels the market growth. In addition, government investment in the construction of 5G infrastructure and data center infrastructure across China, Japan, and India creates the demand for liquid cooling solutions, enhancing market growth.
End Users Focused Product Innovation to Extend Manufacturers Market Presence
Major players such as Delta Electronics Inc (Delta Power Solutions), 3M, Giga-Byte Technology Co Ltd, The Chemours Company (Optional), and Green Revolution Cooling Inc., among others, are engaged in adopting expansion and acquisition as key strategic moves to intensify market competition. In addition, two-phase data center liquid immersion cooling manufacturers adopted product launch and product development as a key developmental business strategy that supports small and hyper-scale data centers.
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3M, Giga-Byte Technology Co Ltd, LiquidStack Holding NV, The Chemours Company, and Vertiv Holdings Co. are the largest players in the market. The global two-phase data center liquid immersion cooling market is consolidated, with the top 5 players accounting for around 36-38% of the market share.
List of Key Two-phase Data Center Liquid Immersion Cooling Companies Profiled
The increasing adoption of advanced cooling solutions, particularly two-phase liquid immersion cooling, is attracting significant investment interest. This surge in funding reflects the growing recognition of the technology's potential to address critical challenges in high-density computing environments, offering substantial energy savings and superior thermal management. Consequently, numerous companies are securing capital to support their innovative cooling technologies, expand manufacturing capabilities, and accelerate market penetration, signaling a robust growth trajectory and creating substantial opportunities within the sector.
The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, component type, cooling fluid, end users, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.
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ATTRIBUTE | DETAILS |
Study Period | 2019-2032 |
Base Year | 2024 |
Estimated Year | 2025 |
Forecast Period | 2025-2032 |
Historical Period | 2019-2023 |
Growth Rate | CAGR of 15.6% from 2025 to 2032 |
Unit | Value (USD Million) |
Segmentation | By Component
By Application
By Cooling Fluid
By Data Center Type
By End Users
By Region
|
Key Market Players Profiled in the Report | Boyd (U.S.), Delta Electronics, Inc. (Taiwan), GIGA-BYTE Technology Co., Ltd. (Taiwan), Green Revolution Cooling Inc. (U.S.), LiquidStack Holding B.V. (U.S.), Mitsubishi Heavy Industries Group (Japan), 3M (U.S.), The Chemours Company (U.S.), Vertiv Holdings Co. (U.S.), and Wiwynn Corporation (Taiwan) |
The market is projected to reach USD 1,188.0 million by 2032.
In 2024, the market was valued at USD 375.5 million.
The market is projected to grow at a CAGR of 15.6% during the forecast period.
The cloud service providers (CSPs) segment leads the market.
The increasing need for data center energy and cost efficiency drives the adoption of advanced immersion cooling solutions.
Boyd, Delta Electronics, Inc., GIGA-BYTE Technology Co., Ltd., Green Revolution Cooling Inc., LiquidStack Holding B.V., Mitsubishi Heavy Industries Group, 3M, The Chemours Company, Vertiv Holdings Co., and Wiwynn Corporation are the top players in the market.
North America is expected to hold the highest market share.
By application, Artificial Intelligence is expected to grow with the highest CAGR during the forecast period.
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