The immersion cooling market is projected to grow at a CAGR of 23.98% to reach US$1,427.887 million in 2029 from US$317.201 million in 2022.
Immersion cooling is the process of cooling hardware equipment such as batteries, motors, and computers by immersing them in a thermally conductive dielectric liquid. Mineral oils, synthetic oils, and fluoro-carbon-based fluids are the most used liquids for single-phase and double-phase immersion cooling purposes. In a single-phase immersion cooling system, the coolant is transported using a distribution unit installed to facilitate cooling using a heat exchanger unit.
In contrast, in a two-phase cooling system, the coolant is initially vaporized, and later, condenser coils are employed to restore the coolant's liquid form. Hence, the coolant retains its liquid state. The major factors stimulating the consumption of immersion cooling solutions are the growing cryptocurrency mining activities, increasing national data center capacity among major economies, and the thermal efficiency demand in electric vehicles.
Immersion cooling market drivers:
The growing number of data centres internationally and the evolution in their capacity is stimulating the demand for data centres. As per a report compiled by the North American data center, over 100 data center projects had either been announced or were in the initial process of being planned in the US as of 2021 with major operators and service providers such as Microsoft, Apple, Facebook, and Google accounting for approximately more than 90% of these data centre projects. The adoption of immersion cooling systems aids data centres in lowering their energy consumption.
Furthermore, immersion cooling can significantly increase the efficiency of data centers' energy usage. The International Energy Agency estimated that the workloads of data centers would increase by 260% to reach 650 million in 2021 from its initial value of 180 million in 2015, driven by the evolution of digital technologies. Therefore, the rise in data centres across major countries will promote the immersion cooling market’s growth during the forecast period.
The International Energy Agency announced that the worldwide sale of electric vehicles (EVs) was estimated at around 6.6 million in 2021. The rising demand for electric vehicles offers an opportunity for the immersion cooling market’s expansion since they are employed to cool the batteries of electric vehicles. Research tests conducted by Exoes's Lab revealed that using immersion cooling solutions to cool EV batteries prolongs battery life, enhances safety by lowering thermal runway accidents, and facilitates quick battery charging.
Furthermore, the increasing need for efficient thermal management to prevent battery fire accidents results in consideration of immersion cooling usage by EV manufacturers and chemical companies such as the Lubrizol Corporation and Ricardo PLC to let the battery be directly submerged in dielectric coolants. Therefore, the increasing need for effective battery cooling systems in electric vehicles is expected to drive the demand for immersion cooling systems over the forecast period.
Immersion cooling market restraints:
The presence of substitutes like conventional cooling systems limits the usage of immersion cooling solutions. However, the easy installation and fewer complications involved with adopting air-cooling products are promoting its use by the data centers of major technology companies such as Google, Meta, and Dell Technologies.
Further, air coolers have been one of the most dominantly used systems to cool data centers over the last decade. However, upgrading to immersion cooling systems requires data centers to incur additional costs and make certain service infrastructure modifications. Hence, the continued use of air-cooling technology among certain data centers is leading to the slower adoption of immersion cooling.
Immersion cooling market segmentation analysis
The rise in cryptocurrency mining activities, fueled by the release of new software platforms facilitating the process and consumers' increasing focus on digital currency, is resulting in high energy consumption by this sector. As a result, the international energy consumed for cryptocurrency mining increased by 300%, changing from 4 TWh in 2015 to approximately 100 to 140 TWh in 2021, as per the data released by the IEA.
This sector's massive surge in energy consumption results in high demand for immersion cooling systems, ensuring computer systems' smooth functioning.
Immersion cooling market – Geographical outlook
The enhancement in chip technology and server infrastructure is promoting the growth of regional data centers, creating an increased demand for immersion cooling solutions. For instance, the Indian government declared that the National Data Centre intends to accelerate the nationwide rise in scheduled data center capacity by installing 2000 MW by the end of 2027.
Further, the data centre sector is expanding by investing in the region's leading companies, such as Microsoft, Dell Technologies, and Samsung. For example, Amazon Web Services reported in November 2022 the opening of its second data center, AWS Asia Pacific Region, in India. Therefore, developing regional data centers is expected to drive the immersion cooling market.
Immersion Cooling Market Industry Updates:
Immersion Cooling Players and Products:
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Report Metric | Details |
| Market Size Value in 2022 | US$317.201 million |
| Market Size Value in 2029 | US$1,427.887 million |
| Growth Rate | CAGR of 23.98% |
| Study Period | 2019 to 2029 |
| Historical Data | 2019 to 2022 |
| Base Year | 2023 |
| Forecast Period | 2024 – 2029 |
| Forecast Unit (Value) | USD Million |
| Segments Covered |
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| Companies Covered |
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| Regions Covered | North America, South America, Europe, Middle East and Africa, Asia Pacific |
| Customization Scope | Free report customization with purchase |
Immersion cooling market is segmented and analyzed as below: