Market Overview

The immersion cooling market in data centers is anticipated to register a CAGR of over 40%, during the forecast period (2020-2025). The future is coming quickly and that means huge data will be here sooner rather than later and with huge data comes a major demand for more energy-efficient and effective data center cooling. Immersion cooling meets the needs of an ever-growing data center power density and will likely increase the demand in future.

  • The increase in the number of hyper-scale data centers is driving the market as hyperscale data centers are broadly used in different sectors to increase computing ability, memory, networking infrastructure, or storage resources. The different features of the hyperscale data centers include the physical infrastructure and distribution systems that support the data centers for maximizing cooling efficiency, as well as the ability to scale computing tasks in a quicker and faster way. According to the National Association of Software and Services Companies (NASSCOM), IT exports from India may exceed USD 330 billion by 2019-20. This accounts for nearly 14% of the projected worldwide spend, if India maintains its current share of the global offshore IT market.
  • Dealing with high-density power consumption drives the market as many industry estimates put cooling costs at about 40% of a data center’s energy consumption. Immersion cooling is able to reduce a data center’s energy usage by over 60%, with some systems stating it could be as much as 95%. For many data centers, that is millions of dollars in savings every year.
  • High investment with greater capital expenditure is restraining the market growth, as requirement of specialized infrastructure is needed and hence need to be justified with a longer-term ROI in mind.

Scope of the Report

Immersion cooling involves immersing of IT hardware, such as memory, drives, and CPUs, directly into non-conductive dielectric liquids, which cool the system. The heat generated from these systems is directly transferred to coolants, thereby reducing the need for active cooling components, such as heat sinks, fans, and interface materials commonly used for air cooling.

Key Market Trends

Mineral Oil Fluid to Hold Major Share

  • Mineral oils are preferred by end-users looking for a low-cost, energy-efficient cooling solution. Cooling through mineral oil needs less energy, as it retains heat 1,000 times better than air. It is a great thermal insulator, which allows the equipment to operate well while being submerged.
  • Although oils have lower heat capacity than water, oil cooling has advantages over other types of liquid cooling methods in that it is a dielectric liquid and does not require complex infrastructure within individual servers.
  • Also, mineral-oil-based coolants are cheaper, compared to engineered or synthetic fluids. For example, mineral oil costs just over USD 10 per gallon, while synthetic fluids, such as 3M Novec 1230 produced by 3M Co., cost over USD 70 per gallon. Also, compared to air and water medium, mineral oil has a better heat capacity and power efficiency.
  • As mineral oil is produced as a primary by-product while converting crude oil into gasoline, there are several established vendors that already serve the cosmetics and industrial sector from where companies could source the product and modify it for their use. However, in the case of synthetic liquids and other substitutes, 3M enjoys a major market share. All the major operators and immersion cooling technologies, including Allied Control Ltd, Fujitsu Limited, ExaSclar Inc., and LiquidMips, use coolants provided by 3M.

North America to Hold the Dominant Share

  • North America is estimated to dominate the global data center liquid immersion cooling market during the forecast period, due to the presence of a large number of data centers in the region, along with the rise in popularity of this technology, especially in the United States.
  • In the United States, the demand and rate of adoption for cloud-based computing are rapidly increasing by technology giants, such as Facebook and Apple, owing to which, the number of data centers is increasing in the country, thereby, propelling the utilization of immersion cooling systems.
  • In June 2017, Facebook announced that it will lay a 200-mile cable to the new data centers in Mexico, which are likely to boost the market growth over the forecast period. Additionally, a few states of the United States are offering tax incentives, specifically to data centers. For instance, Florida approved use and sales tax exemption for every new data center built in the state, which is expected to present a positive impact on the growth of the US market.
  • Companies are rigorously investing in data centers to meet the growing demand from respective operations. For instance, the increasing demand for cognitive capabilities in the United States has led IBM Corporation to build four new cloud data centers in the country. This is likely to encourage the utilization of immersion cooling technology in these data centers, thereby propelling the market growth over the forecast period.
  • Also in 2018, Kolos constructed the largest data center (of 600,000-square meter, with 1,000 MW of computing power) in the world in Ballangen, Norway. The data center is expected to scale up about two gigawatts of consumable renewable power, which is more than the generation capacity of any other data center in the world. This will drive the demand for immersion cooling effectively.

Competitive Landscape

The market studied is moderately consolidated, as the companies in the market are continuously developing new cooling solutions with capabilities to cool highly dense storage components. They are also investing in research and development activities to create alternative solutions that further support developments in the market. In terms of the data center market scenario, there is a considerable number of merger and acquisition activities taking place, globally, which is expected to boost the capabilities of several players to invest in advanced cooling infrastructure. Key players are Fujitsu Limited, Green Revolution Cooling, Submer Technologies, etc. Recent developments in the market are -

  • March 2019: GRC announced that it is working with TechData, a multinational distributor of technology products and services, to provide support and warranties for worldwide customers, using GRC’s immersion cooling systems. The partnership enables customers in over 100 countries served by TechData to have access to technical capabilities of GRC’s immersion cooling solutions.

Reasons to Purchase this report:

  • The market estimate (ME) sheet in Excel format
  • Report customization as per the client’s requirements
  • 3 months of analyst support