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Liquid Cooling Revenues to Eclipse $5 Billion Over the Next Five Years

REDWOOD CITY, Calif. – August 8, 2023 – According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, Data Center Physical Infrastructure (DCPI) market growth was revised up and is now forecast to grow at a 10 percent compound annual growth rate (CAGR) from 2022 to 2027. DCPI vendor backlogs and easing supply chain constraints are propelling double-digit market growth in 2023. As these market dynamics wane throughout the rest of year, AI workloads, including Generative AI, are emerging as new, significant long-term drivers for DCPI market growth.

“I have been tracking the DCPI market for nearly a decade, observing annual revenue growth rates in the mid-to-low single digits. There is a change unfolding. The excitement Generative AI is creating at industry events and in my discussions with ecosystem vendors is palpable,” said Lucas Beran, Research Director at Dell’Oro Group. “I am already seeing AI workloads leading to a broad proliferation of accelerated computing infrastructure. This will require investments in next-generation data center physical infrastructure to support new architectures with higher power and thermal management requirements. Planning and designing for AI deployments at scale is already underway, but this won’t materialize in market growth overnight. For example, deployments of Meta’s recently announced data center architecture changes will occur through 2027.

“One of the key enablers to deploying AI infrastructure is liquid cooling. As we’ve seen in the High Performance Computing industry, air cooling isn’t able to support the thermal management requirements of accelerated servers, with cost, performance, and sustainability in mind. This has led to an upward revision of our liquid cooling forecast, now approaching $2 billion by the outer years of our forecast. The mix has also shifted towards more Direct Liquid Cooling (DLC) based on early momentum in ecosystem support,” continued Beran.

Additional highlights from the Data Center Physical Infrastructure 5-Year July 2023 Forecast Report:

  • DCPI revenue growth is forecast to remain resilient in 2023, growing at a double-digit rate, supported by historically high DCPI vendor backlogs.
  • Asia Pacific (Excluding China) and North America are forecast to grow at the fastest CAGR during the forecast period, followed by EMEA and China.
  • Data Center Cabinet Power Distribution and Busway, and Thermal Management are forecast to grow at the fastest rates during the forecast period.

About the Report

Dell’Oro Group’s Data Center Physical Infrastructure 5-Year Forecast Report provides offers complete, in-depth coverage of the data center physical infrastructure market. This covers market sizes and forecasts for Uninterruptible Power Supplies (UPS), Thermal Management, Cabinet Power Distribution and Busway, Rack Power Distribution, IT Racks and Containment, and Software and Services. Additional product level detail is provided for each market segment. Allocation of manufacturing revenues by Cloud Service Providers, Telco, Colocation, and Large Enterprise and Rest-of-Enterprise customer segments are also provided. For more information about the report, please contact us at dgsales@delloro.com.


About Dell’Oro Group

Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets.  Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions.  For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com. 

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