Summary of Liquid Cooling Industry Report Industry Overview - **Industry**: Liquid Cooling - **Region**: Europe - **Market Growth**: The liquid cooling market is projected to more than double to approximately $2.5 billion in 2025, with forecasts reaching $6 billion by 2029, indicating a compound annual growth rate (CAGR) of 24% from 2025 to 2029 [5][8][15]. Key Insights - **Drivers of Growth**: The adoption of AI servers, particularly the GB200/300 models, is significantly driving the penetration of liquid cooling solutions in data centers. In 2025, liquid cooling penetration in AI data centers is expected to rise to 33%, up from 13% in 2024 [9][15]. - **Acquisition Activity**: The past year has seen active acquisitions in the liquid cooling space, with notable transactions including: - Schneider acquiring Motivair - Samsung acquiring FläktGroup - Eaton purchasing Boyd - Daikin acquiring Chilldyne - Asetek receiving a buyout offer from CQXA [10][12]. - **Emerging Competitors**: Traditional HVAC companies are entering the liquid cooling market, raising concerns about potential commoditization. Companies like Johnson Controls and Carrier have launched new products, indicating increased competition [13]. Market Dynamics - **End-to-End Players**: Integrated vendors that provide both power and cooling solutions, such as Schneider, are expected to be better positioned in the market. Companies like ABB may need to pursue mergers and acquisitions or partnerships to remain competitive [5][14]. - **Market Penetration**: The significant increase in market size reflects growing penetration in new-build data centers, with an estimated 27,000 units of GB200/300 racks shipped in 2025, expected to nearly triple in 2026 [9][21]. Financial Implications - **Stock Recommendations**: - **Schneider**: Preferred as the only company in coverage with liquid cooling capabilities. - **Legrand**: Positive outlook on its Rear Door Heat Exchanger product for near-term growth, but cautious on long-term prospects due to inferior cooling capacity. - **ABB**: Currently lacks a full-stack offering but has potential for future acquisitions [14]. Market Forecasts - **Revenue Projections**: The liquid cooling market is expected to reach $2.5 billion in 2025, reflecting a 127% year-over-year growth. The market is projected to grow to $6 billion by 2029, indicating a significant acceleration in growth expectations [8][15]. Conclusion The liquid cooling industry is experiencing rapid growth driven by advancements in AI technology and increased competition from traditional HVAC players. The market dynamics favor integrated solution providers, and ongoing acquisition activity suggests a consolidation trend. Investors should monitor these developments closely as they present both opportunities and risks in the sector.