Immersion Cooling Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Immersion Cooling Market Trends and Growth Drivers

Deployment of 5G Networks Is a Major Market Trend

Hyperscale data centers and cloud facilities are in high demand as 5G networks are being expanded. According to Thales, by the middle of 2024, 5G had 1.7 billion subscribers worldwide, with an addition of 160 million solely in the first quarter of 2024. Nearly 320 service providers have rolled out 5G networks, and 49 have launched 5G standalone (SA) networks to answer the demand for uninterrupted connectivity. Global 5G coverage, excluding mainland China, reached about 40% at the end of 2023, and it is expected to reach about 80% in 2029.

High-performance computing and artificial intelligence applications are viable with this network since 5G enables a higher computing capability. As network and data needs rise, data centers will need to maximize efficiency, dependability, robustness, and security. Moreover, the upgradation of the telecom infrastructure to handle the upcoming 5G breakthroughs and the surge in the adoption of cloud solutions are boosting the demand for data centers. These factors working together will increase the need for reliable and energy-efficient immersion cooling solutions.

Enormous Growth in Data Generation Necessitates Efficient Storage

The key reason driving the industry's growth is the rapid expansion in data generation. For instance, in 2023 about 120 zettabytes of data were generated, in addition, around 2.5 quintillion bytes of data are created globally every day. Nearly 66% of the total world's pollution has access to the internet, which means each user approximately can generate 15.87 TB of data daily. This also fosters the demand for data centers for robust data management, storage solutions, and various services, in turn, boosting the requirement for immersion cooling systems. With the progress in data-driven applications, there is a rising need for high-performance computing environments to cater to AI and big data analytics. With the widespread adoption of social media platforms and the introduction of IoT solutions, alone in the last 2 years, 90% of the world’s data was created.

Other than these, the widespread use of embedded, machine-to-machine, and IoT devices is also the main factor driving the increase in data generation. Other sources include pictures and videos, information for amusement and practical uses like advertising and security, as well as productivity-driven data like log files on servers and computer systems. Businesses utilize this information to enhance their products and services, maintain good customer relations, and boost profitability. Immersion cooling will become more and more popular as a result of the rising data generation and the surging need for its effective storage, which will fuel the market expansion.

Leakage Concerns and High Upfront Costs Are Biggest Challenges for Market

Vulnerability to fluid leakage compromises the reliability and performance of the immersion cooling system; thus, organizations are reluctant to opt for it, despite its advantages of water saving and efficient heat dissipation.

This problem is more challenging for fluorocarbon immersion coolants, although they are non-flammable and thermally stable. The huge initial investment for dedicated infrastructure—tanks, pumps, and heat exchangers—deters future users, especially small and mid-scale data centers.

An increase in the spending to accommodate immersion cooling in existing data center setups also acts as a major restraining factor for organizations, particularly small-scale enterprises reluctant to make large financial commitments.

Immersion Cooling Market Analysis

Insights by Product

• The single-phase category held a larger share, of around 65%, in the immersion cooling market revenue in 2024. This is ascribed to several benefits offered by this technique to users.
• For instance, single-phase immersion cooling systems are more energy efficient, simpler to operate, cost-effective, have low maintenance costs, and 15-year coolant life. As a result, the demand for these systems in data centers is substantially higher, which is why, this category dominates the market.
• Furthermore, factors such as low environmental impact and higher biodegradability, as well as a surge in the need for data center sustainability, are expected to boost the market growth in this category during the forecast period.
• The two-phase category is the faster-growing category in the market.
• These systems utilize a phase change of the coolant, making them capable of better thermal transfer.
• They also have a power use effectiveness of 1.01, which is 5% less than that of single-phase systems, making the former an apt cooling solution for hyperscale data centers.
• With the advancing two-phase liquid cooling technology and the increasing awareness of its advantages, such as energy and space saving, it is being adopted for various applications.
• Prominent among them are artificial intelligence, machine learning, and cryptocurrency mining, which require optimal thermal management for their high-performance computers.

The products evaluated here are:

• Single-Phase (Larger Category)
• Two-Phase (Faster-Growing Category)

Insights by Application

• Data centers generate the highest revenue in the market.
• Data center operators are increasingly seeking strategies to effectively cool onsite equipment, while decreasing their environmental impact and improving the computing capacity.
• The increasing adoption of advanced technologies has significantly increased temperature within data center infrastructure and IT equipment.
• Furthermore, the expanding number of data centers to meet the growing data demand and the surging number of end users are driving the need for effective cooling solutions, boosting the immersion cooling market growth.
• The cryptocurrency mining category is the fastest-growing in the market, with a projected CAGR of 25.21% during the forecast period.
• This is attributed primarily to the growing popularity of cryptocurrencies as a decentralized financial asset.
• With the easy access to the internet, anyone can buy any amount of cryptocurrency they want, their price determined by demand and supply, much like stocks.
• These financial assets are widely used for buying all kinds of stuff, investments, sending money across borders securely, paying employees, and even participating in the blockchain ecosystem.
• Cryptocurrency systems majorly use application-specific integrated circuits, which generate massive amounts of heat.
• Here, immersion cooling offers an efficient and cost-effective method for thermal management.
• This technology also helps with space optimization, noise pollution reduction, scalability, and equipment lifespan elongation.

The applications evaluated here are:

• Data Centers (Largest Category)
• High-Performance Computing
• Artificial Intelligence
• Edge Computing
• Cryptocurrency Mining (Fastest-Growing Category)
• Others

Insights by Liquid Type

• The mineral oil category dominated the immersion cooling market in 2024 with ~55% revenue.
• This is because mineral oil has a relatively low cost compared to traditional air conditioning systems, superior dielectric properties, and the ability to absorb large amounts of heat without changing its state.
• Mineral oils are also preferred for their high boiling points and the flexibility and ease they provide during deployment and operations.
• Fluorocarbon-based fluids are expected to be the fastest-growing category during the projection period.
• They are electrically insulating fluids with a high dialectic capability, which favors their adoption in data centers and for IT and aerospace equipment.
• Their excellent thermal conductivity, chemical stability, and non-flammability make them suitable for high-performance computing and sensitive electronic applications.

The liquid types evaluated here are

• Mineral Oils (Largest Category)
• Fluorocarbon-Based Fluids (Fastest-Growing Category)
• Deionized Water
• Others

Immersion Cooling Market Geographical Outlook

In 2024, the North American market accounted for the largest revenue share, of around 40%, globally. This is attributed to the substantial investment in research and development in the region, leading to the development of next-generation facilities that are more efficient and technologically advanced in power administration. The region is also home to a large number of data center developers, which is expected to have a positive impact on the growth of the market.

The APAC market is expected to experience the fastest growth, advancing at a CAGR of more than 18%, in the upcoming years, as a result of the wide adoption of edge-computing technologies across various countries, including China, Japan, and India. Moreover, the expanding manufacturing and finance sectors in the region will further drive the demand for data centers, necessitating more cooling. In addition to these, the advancing blockchain and crypto mining applications are supporting the regional immersion cooling market advance.

Similarly, the European market is projected to grow significantly during the forecast period. This can be ascribed to the growing manufacturing and data science industries, which propel the demand for data centers in the region. In Europe, the U.K. is a key market for data centers, as the country has the second-largest share of data centers, and is one of the world’s largest financial hubs.

The geographical breakdown of the market is as follows:

• North America (Largest Regional Market)
  • U.S. (Larger Country Market)
  • Canada (Faster-Growing Country Market)
• Europe
  • Germany (Largest Country Market)
  • Spain (Fastest-Growing Country Market)
  • Italy
  • U.K.
  • France
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • South Korea
  • Japan
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Saudi Arabia (Largest Country Market)
  • Rest of MEA

Immersion Cooling Market Share

The immersion cooling market is fragmented in nature. This is because the technology has an extensive range of applications in data centers, blockchain, and cryptocurrency mining. This results in an array of specialized systems with varying efficiencies and fluids with different heat absorption capabilities. Moreover, a growing number of startups are entering the market with advanced cooling technologies and systems, adding to the fragmentation. The ongoing advancements in cooling methods and fluids also influence the market dynamics, as companies continually refine their offerings.

Immersion Cooling Market News

In March 2024, Liquid Stack Inc. operationalized its manufacturing site and headquarters in Carrollton, Texas. This facility highlights a vital step in LiquidStack’s goal to offer high-performance, cost-effective, and dependable liquid cooling solutions for data centers, edge computing applications, and generative AI. All its products, such as direct-to-chip coolant distribution units, single-phase and two-phase immersion cooling solutions, MacroModular, and MicroModular, are being manufactured in the new site.

In March 2024, Submer became a member of the newly established Liquid Cooling Coalition (LCC), which emphasizes advanced, efficient, and sustainable liquid cooling technologies for data centers. The coalition educates policymakers, raises knowledge about policies, and encourages collaboration among stakeholders to lower electricity demand in data centers by 10%.

In October 2023, Green Revolution Cooling Inc., Dell Technologies, and DCV Industries entered into a partnership to offer modular immersion-cooled data centers in the Middle East region. The partnership aims to cut down data center building, maintenance, and power expenditures, achieve power usage effectiveness, and lessen energy consumption.