Liquid Cooling Industry Overview Drivers and Market Outlook
The rapid development of the digital economy, explosive data growth and AIGC’s leapfrog progress have raised higher demands for computing infrastructure. Meanwhile, high energy consumption and inadequate heat dissipation of data center server clusters are driving the industry to adopt more advanced, greener temperature control. Liquid cooling, with much higher heat dissipation efficiency than traditional air cooling, will be widely adopted by server manufacturers and scenarios, boosting the data center industry’s green development.
IBM launched the world’s first water-cooled computer in 1967. China’s liquid cooling industry started late but developed rapidly: Sugon pioneered it in 2011, followed by Huawei, Inspur Information and others who expanded market layout and mass production. Since 2019, major manufacturers’ liquid cooling technologies have advanced significantly, enhancing China’s global competitiveness.
The liquid cooling industrial chain covers upper, middle and lower reaches. The upper reaches supply components (quick connectors, CDUs, manifolds, etc.) that form a complete data center liquid cooling system. The middle reaches include liquid cooling server, chip manufacturers and integration facilities. The lower reaches cover telecom operators, Internet enterprises and industry clients. As professional liquid cooling system manufacturer and data center liquid cooling supplier, industry enterprises support the entire chain.
Liquid cooling uses liquid as refrigerant to dissipate IT equipment heat, boasting ultra-high efficiency, heat density and environmental adaptability. Main technologies include cold plate, spray and immersion liquid cooling, providing diverse options for liquid cooling for data center and liquid cooling high density computing.
Cold plate liquid cooling, the most mature solution with over 10 years of research, indirectly transfers heat via cold plates. It reduces costs but fails to achieve 100% liquid cooling, with high design difficulty and slow standardization.
Immersion liquid cooling submerges devices in coolant, divided into single-phase and two-phase types. It is energy-saving (PUE < 1.13) and ideal for liquid cooling for AI GPU data center, but has limitations in device selection and maintenance.
Spray liquid cooling directly sprays coolant to chip-level devices, achieving 100% liquid cooling with a subversive structure, but its energy-saving effect is inferior to immersion liquid cooling.
The liquid cooling industry is driven by surging data volume, AIGC’s computing power demand and expanding data center scale. IDC predicts new global data will exceed the past 30 years’ sum, and AIGC’s model evolution has sharply increased computing power needs for training and inference.
Prominent data center energy consumption, heat dissipation challenges and rising single cabinet power density further promote liquid cooling. Traditional air cooling cannot meet high heat flux needs, while liquid cooling improves server efficiency and space utilization, boosting data center liquid cooling renovation.
The liquid cooling market has broad prospects. China’s liquid cooling server market reached $1.01 billion in 2022 (YoY +189.9%), is expected to hit $1.51 billion in 2023 and $8.9 billion by 2027, driven by green data centers and AI demand.
The future temperature control market will see "air cooling + liquid cooling" coordination. By 2025, liquid cooling data centers will account for 24.0% in Internet, 25.0% in finance and 23.0% in telecom industries.
Sugon leads China’s liquid cooling server market, followed by Huawei, Alibaba and Lenovo. High technical and regional barriers make it hard for foreign manufacturers to enter the Chinese market.
China’s three major telecom operators released a 2023-2025 liquid cooling plan, aiming to apply liquid cooling in over 50% of projects by 2025, build an ecological chain and unify standards.
In summary, China’s liquid cooling industry is in the early stage with low penetration but broad prospects. Challenges include immature ecology, evolving architecture and high costs. The industry needs joint efforts to promote standardization and cost reduction. Many manufacturers offer custom liquid cooling solution to meet personalized project needs, driving sustainable development.
As a reliable global specialist in liquid cooling for high-density AI and HPC data centers, EXTRCOOL delivers a complete range of premium thermal equipment—including dual-mode CDUs, various manifold assemblies, cold plates, rear-door heat exchangers, dry coolers, and integrated container cooling units. Our solutions are designed to ensure stable operation, high adaptability, and easy scalability, enabling a one-stop full liquid cooling deployment. We provide professional services to data center operators and corporate clients across Eastern Europe, South Asia, Oceania, North Africa, and other key global markets.
