The global immersion cooling market was valued at approximately USD 197.0 million in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 22.6% from 2023 to 2030. The primary factor driving this growth is the increasing demand for cost-effective and energy-efficient cooling solutions, particularly from data centers. These facilities are seeking ways to optimize their operations, and immersion cooling offers a promising solution. However, the industry's growth faced a temporary slowdown due to the strict lockdowns imposed by governments worldwide in response to the COVID-19 pandemic in 2020. These lockdowns disrupted operations in various sectors, including data centers, where key activities like server relocation, building closures, and new site construction were delayed or halted. Despite these challenges, data centers saw an increase in demand during the pandemic, largely driven by the shift to remote work and the growing prevalence of e-commerce.
In the United States, the immersion cooling market is experiencing a transformation, particularly as a result of the COVID-19 pandemic. Companies involved in immersion cooling have expanded their capacities to meet the growing demand from data centers. The pandemic accelerated the spread of e-commerce across various sectors, bringing new enterprises, customers, and product categories into the fold. Additionally, the increasing demand for Internet of Things (IoT) capabilities and the expansion of cloud computing infrastructure in the U.S. are expected to fuel demand for data centers, particularly large-scale, or hyperscale, data centers.
The market is characterized by a mix of global and regional players, offering a variety of proprietary immersion cooling solutions. Many manufacturers adapt off-the-shelf Information Technology Equipment (ITE) to be compatible with their specific immersion cooling technologies. Additionally, these manufacturers often provide customized solutions tailored to the specific needs of their clients.
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Product Segmentation Insights:
The single-phase immersion cooling system dominated the market in 2022, accounting for 70.7% of the global revenue share. This dominance can be attributed to several factors, including the relatively low cost of tanks and coolant, the high dielectric strength, minimal environmental impact, high heat capacity of the coolant, and high biodegradability associated with single-phase systems. In a single-phase immersion cooling system, electrical components, subsystems, and devices are fully submerged in a dielectric heat transfer fluid that remains in a liquid state throughout the cooling process. This method is known for being cost-effective, efficient, and straightforward to implement.
On the other hand, demand for two-phase immersion cooling systems is expected to grow at a CAGR of 23.0% over the forecast period. This growth is driven by the system's improved reliability, high energy efficiency, deployment flexibility, and reduced maintenance requirements. Two-phase systems are particularly well-suited for hyperscale data centers due to their power use effectiveness (PUE) of 1.01, which is 5% lower than that of single-phase systems.
However, two-phase systems come with certain challenges. As the coolant transitions to a gaseous phase during the cooling process, the system requires significant pressure, leading to the need for more complex designs with enhanced safety features. This increases both the operational and maintenance costs. Furthermore, the fluorinated fluids used in two-phase systems are more expensive than the coolants used in single-phase systems, and replacing these fluids due to losses further adds to the cost.
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