Power Electronics Equipment Cooling System Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Cooling Type (Air Cooling, Liquid Cooling, Hybrid Cooling Systems), By Power Rating (Low Power (Below 500 kW), Medium Power (500 kW – 5 MW), High Power (Above 5 MW)), By Application (Automotive, Energy & Power, IT & Telecom, Industrial Manufacturing, Consumer Electronics, Others), By Region, and By Competition, 2020-2030F

Market Overview

The Global Power Electronics Equipment Cooling System Market was valued at USD 5.63 Billion in 2024 and is expected to reach USD 8.89 Billion by 2030 with a CAGR of 7.74% during the forecast period.

The global Power Electronics Equipment Cooling System Market is witnessing robust growth, driven by the rising demand for efficient thermal management solutions across diverse industries such as automotive, energy, consumer electronics, data centers, and industrial manufacturing. Power electronics are increasingly embedded in electric vehicles (EVs), renewable energy systems, high-performance computing, and industrial automation, leading to higher heat generation and greater emphasis on advanced cooling solutions to maintain reliability, safety, and efficiency. Effective cooling systems are essential for minimizing energy losses, extending device lifecycles, and ensuring stable performance of sensitive electronic components, making them a critical enabler for modern high-power applications.

Technological advancements are reshaping the market, with traditional air-cooling methods being gradually complemented or replaced by liquid and hybrid cooling systems that offer higher efficiency and compact designs. Liquid cooling, including cold plates and immersion systems, is gaining traction in data centers, EV powertrains, and renewable energy converters due to its superior heat dissipation capabilities. Meanwhile, innovations in thermal interface materials, phase-change technologies, and heat exchangers are further enhancing system performance. The growing adoption of immersion and direct liquid cooling in high-density server environments and electric mobility infrastructure reflects the market’s shift toward next-generation solutions capable of handling higher power densities.

Key Market Drivers

Rising Data Center Energy Demand and Cooling Needs

The exponential growth of digital infrastructure has intensified the demand for advanced cooling systems in power electronics. Data centers are consuming unprecedented amounts of electricity, with forecasts suggesting an additional 20 GW of power demand by 2030. Energy consumption is expected to represent between 6.7–12% of national power usage by 2028, up from 4.4% in 2023. Traditional air-cooling methods often result in an average PUE (Power Usage Effectiveness) of 1.58, whereas advanced liquid cooling can reduce this figure to nearly 1.1, demonstrating much higher efficiency. Moreover, cooling-related issues are responsible for over 40% of data center downtime, highlighting the operational risks of outdated thermal management. Advanced liquid and immersion cooling solutions can cut overall energy consumption by up to 50%, providing significant cost savings. These improvements are vital as data centers scale operations, ensuring reliability, efficiency, and compliance with sustainability goals.

Expansion of High-Density Compute Workloads

Artificial Intelligence (AI), high-performance computing (HPC), and edge computing are driving massive increases in compute density, creating new thermal management challenges. Modern AI accelerators and TPU pods have increased rack density by nearly 4×, while high-performance processors have shown a performance-per-watt improvement of 1.34× per year since 2019. Next-generation systems, such as AI supercomputing racks, demand cooling for loads as high as 140 kW per rack. Space-constrained edge data centers, meanwhile, are shifting toward compact liquid-based cooling, which reduces energy use by approximately 50% and saves nearly two-thirds of physical space compared to air systems. These quantitative gains underscore the critical role of cooling technology in enabling higher compute density, maintaining hardware reliability, and optimizing energy efficiency in performance-driven applications.

Retrofitting Legacy Infrastructure

A significant portion of cooling demand comes from upgrading existing infrastructure rather than building new facilities. Nearly 43% of current liquid cooling deployments are retrofits, highlighting the importance of modernization. Retrofitted facilities have demonstrated energy savings of around 34% within six months of implementation, while maintaining uptime levels of 99.999%. Retrofit projects also reduce upfront investment costs by up to 60% compared to new builds. For example, facilities achieving PUE below 1.1 through retrofits have reported annual CO₂ emission reductions of over 800 metric tons, along with a 4× increase in computing density without expanding physical floor space. These figures illustrate why retrofitting is a cost-effective and sustainable pathway for older facilities to adopt advanced cooling, prolong infrastructure lifespan, and remain competitive.

Regulatory and Sustainability Pressures

Global regulatory frameworks and sustainability goals are reshaping thermal management strategies in power electronics. Authorities are introducing efficiency mandates, such as requiring data centers to maintain a PUE of 1.3 or below by 2025. Compliance with such measures is accelerating adoption of liquid cooling systems capable of achieving sub-1.1 PUE. Financial incentives are also a driver, with governments covering up to 30% of retrofit costs through subsidies and green energy initiatives. In certain regions, liquid cooling penetration has surpassed 60% in newly built facilities, while overall adoption in North America alone accounts for nearly 39% of the global share. These quantitative milestones highlight how stricter efficiency standards, combined with policy-driven financial support, are compelling industries to adopt advanced cooling solutions to meet environmental and operational targets.

Technological Advancements in Cooling Systems

Rapid technological innovation is significantly improving the performance, efficiency, and adoption of power electronics cooling solutions. Next-generation liquid cooling systems have reduced cooling power consumption from 40% of total facility load to as low as 10%, offering dramatic energy savings. Although liquid systems can cost up to 20× more than air cooling, their ability to deliver higher compute density, lower noise, and dust-free operation is driving adoption. Today, more than 50% of hyperscale data centers already support liquid cooling, signaling a major market shift. Hybrid cooling solutions, combining both air and liquid, are also becoming popular, enabling tailored approaches for different thermal profiles. Furthermore, immersion cooling technologies using single- and two-phase dielectric fluids provide safe, reliable, and efficient performance, reducing downtime risks. These advancements illustrate how innovation is transforming thermal management from a cost center into a strategic enabler of performance and sustainability.

Download Free Sample Report

Key Market Challenges

High Capital and Operational Costs

One of the primary challenges in the global power electronics equipment cooling system market is the high capital investment and operating costs associated with advanced cooling solutions. While air-cooling systems are relatively inexpensive, liquid cooling, immersion cooling, and hybrid systems require significant upfront infrastructure investment. For example, immersion cooling units can cost up to 15–20 times more than conventional air systems. Beyond installation, operators must bear recurring costs for specialized dielectric fluids, pumps, chillers, and maintenance protocols. Smaller enterprises, especially in emerging economies, often find these costs prohibitive. Moreover, retrofitting legacy facilities with advanced liquid cooling adds complexity and capital pressure, as existing infrastructure must often be redesigned to support new thermal management systems. Operationally, managing liquid leaks, coolant degradation, and ensuring fluid compatibility with sensitive electronics adds to cost burdens. As industries scale computing workloads, especially in AI and data centers, the total cost of ownership for next-generation cooling becomes a major decision-making barrier. This cost challenge creates a market divide: hyperscalers and large enterprises adopt high-end systems, while small and medium businesses remain dependent on less efficient, lower-cost solutions. Bridging this cost-performance gap remains a pressing obstacle for manufacturers and integrators.

Technical Complexity and Integration Issues

Advanced cooling systems, particularly liquid immersion and hybrid technologies, introduce considerable technical challenges. Integration requires precise engineering to align pumps, manifolds, sensors, and control systems with existing electronic components. For instance, direct-to-chip liquid cooling involves routing microchannels and ensuring reliable seals around processors, which increases design and assembly complexity. A small leak or fluid contamination can result in catastrophic equipment failure. Furthermore, compatibility between cooling fluids and electronic materials is a concern; dielectric fluids must avoid causing corrosion, scaling, or material degradation. System downtime during installation or retrofitting is also a challenge, particularly for mission-critical facilities like data centers, where downtime can cost over USD 5,000–7,000 per minute. Engineers require specialized training to manage and maintain such systems, further increasing barriers to adoption. The lack of universal standards across different cooling technologies adds another layer of complexity, making interoperability difficult. As workloads become denser, ensuring efficient heat transfer without disrupting operations is an engineering hurdle that continues to slow mass adoption of advanced cooling systems.

Risk of Reliability and Safety Concerns

Reliability and safety remain persistent challenges in advanced cooling systems. Unlike air cooling, liquid-based and immersion systems introduce risks such as coolant leakage, pump failure, and condensation. Any coolant infiltration into sensitive power electronic circuits could lead to irreversible damage and operational downtime. Even dielectric fluids, though non-conductive, degrade over time and require replacement, introducing uncertainty about long-term reliability. Thermal expansion, vibration, and micro-cracks in seals or cold plates can exacerbate leakage risks. Additionally, improper handling of phase-change materials or two-phase immersion cooling fluids can result in unstable system behavior. Safety risks are particularly high in high-voltage equipment, where inadequate insulation or fluid failure can pose hazards to operators. Furthermore, operators remain skeptical about scaling immersion cooling due to limited field data on its durability over 10–15 years compared to traditional systems. The industry also lacks robust safety certifications and benchmarks for newer technologies, making risk management more challenging. These reliability and safety concerns act as significant barriers to wider deployment, particularly in sectors like automotive and aerospace, where equipment failures can have severe consequences.

Environmental Impact and Coolant Management

While advanced cooling systems are often marketed as energy-efficient, their environmental impact poses another challenge. Dielectric fluids used in immersion cooling, such as fluorocarbons or synthetic hydrocarbons, have environmental risks related to production, handling, and disposal. Some of these fluids have high global warming potential (GWP) and require strict environmental compliance. Recycling or disposing of degraded coolants safely is expensive and logistically complex. Additionally, manufacturing cooling systems themselves—whether heat exchangers, fans, or pumps—carries a carbon footprint that offsets some of the sustainability benefits. Water-based cooling systems, on the other hand, increase water usage, creating sustainability concerns in regions facing water scarcity. The rising regulatory pressure to adopt low-GWP fluids and sustainable solutions adds cost and technical constraints for manufacturers. Striking a balance between performance, environmental compliance, and lifecycle sustainability remains an ongoing industry challenge. Unless addressed, these environmental concerns may hinder the scalability of next-generation cooling systems, especially in regions with strict climate policies.

Limited Awareness and Adoption in Emerging Economies

Although demand for advanced cooling systems is strong in North America, Europe, and parts of Asia, adoption in emerging economies remains limited. High initial costs, limited technical expertise, and lower regulatory pressures reduce the incentive for small and mid-sized enterprises to invest in advanced systems. In many developing countries, operators continue to rely on basic air-cooling solutions due to familiarity and cost-efficiency, even if they are less effective in high-density workloads. Moreover, limited local manufacturing and supply chain infrastructure drive up prices, as most advanced components must be imported. This dependence increases lead times and reduces market penetration. For example, while data center investments are growing rapidly in Southeast Asia, adoption of immersion and liquid cooling lags far behind due to budget constraints. Additionally, lack of awareness about the long-term energy savings and sustainability benefits of advanced cooling further slows adoption. This creates a market imbalance where advanced solutions are concentrated in technologically mature economies, leaving emerging regions under-served and slowing global market uniformity.

Key Market Trends

Increasing Demand from Electric Vehicle (EV) and Renewable Energy Sectors

The electrification of transportation and the expansion of renewable energy infrastructure are creating new opportunities for advanced cooling systems. EV batteries, inverters, and charging infrastructure generate significant heat, requiring compact, high-performance liquid cooling systems. As EV adoption grows, global charging networks are projected to expand by millions of units, each requiring reliable thermal management. Similarly, renewable energy applications such as solar inverters and wind turbine power converters rely on efficient cooling to maintain system reliability under variable operating conditions. Advanced cooling solutions can extend component life by over 20% and improve efficiency by up to 15%. Governments’ push for clean energy and electric mobility is accelerating demand, making the EV and renewable energy sectors two of the fastest-growing end-users for power electronics cooling systems. This trend positions cooling solutions as a key enabler of the global energy transition.

Hybrid Cooling Approaches for Optimized Performance

Hybrid cooling solutions, which combine air and liquid methods, are emerging as a popular trend to balance cost and performance. Many operators adopt hybrid strategies where high-density racks or equipment use liquid cooling, while lower-density systems continue with air cooling. This allows flexibility in deployment and a gradual transition to more advanced systems. Hybrid approaches are particularly attractive for retrofits, as they reduce upfront investment while still delivering efficiency gains. These systems can lower energy consumption by 20–30% compared to traditional air cooling, while avoiding the full complexity of immersion systems. The hybrid trend also aligns with sustainability goals, enabling incremental improvements in energy use and emissions reduction. As industries look for scalable, cost-efficient solutions, hybrid cooling is becoming a critical bridge between conventional and next-generation thermal management technologies.

Strong Emphasis on Sustainability and Green Cooling Solutions

Sustainability is a growing trend shaping the development and adoption of cooling systems. Operators are under pressure to reduce carbon footprints, energy usage, and water consumption. Advanced cooling systems that achieve sub-1.1 PUE are increasingly favored, especially as regulatory bodies tighten efficiency standards. Eco-friendly dielectric fluids with lower global warming potential are being developed to replace older, environmentally harmful coolants. Companies are also focusing on closed-loop liquid cooling systems that minimize water usage and waste. In addition, the circular economy is influencing the industry, with greater emphasis on recyclable materials and low-impact manufacturing processes. Sustainability-focused cooling can reduce annual CO₂ emissions by hundreds of metric tons per facility, making it a vital part of global decarbonization efforts. This trend ensures that cooling solutions evolve not only for efficiency but also for compliance with environmental and social governance (ESG) objectives.

Segmental Insights

Cooling Type Insights

Air Cooling segment dominates in the Global Power Electronics Equipment Cooling System market in 2024 due to its cost-effectiveness, simplicity, and widespread applicability across various industries. Air cooling systems are easier to design, install, and maintain compared to liquid cooling, making them the preferred choice for many medium- and low-power applications. Their reliability and low operating costs appeal to industries where budgets are constrained or where high thermal densities are not a primary challenge. Additionally, air cooling solutions provide sufficient performance in environments such as consumer electronics, industrial automation, and conventional power supplies, where thermal loads remain manageable.

Another key factor contributing to the dominance of air cooling systems is their energy efficiency in specific applications. Advances in fan design, heat sink technology, and airflow optimization have significantly enhanced the effectiveness of air cooling systems, enabling them to handle higher power levels without major infrastructure investments. The availability of standardized, modular designs also allows for quicker adoption in industries like automotive electronics, renewable inverters, and telecom base stations.

Furthermore, air cooling is highly scalable, making it viable for both small-scale electronic devices and larger equipment requiring consistent but not extreme cooling. Its lower initial investment compared to liquid systems attracts small and medium enterprises (SMEs), which form a substantial portion of the global market. The growing use of medium-power electronic devices in energy storage, transportation, and consumer markets reinforces the segment’s prominence. In contrast, liquid and hybrid cooling are gaining traction in high-performance environments, but their complexity and higher upfront costs restrict mass adoption. Thus, in 2024, the air cooling segment continues to dominate as a practical, economical, and widely adaptable solution.

Power Rating Insights

Medium Power (500 kW – 5 MW) segment dominated the Global Power Electronics Equipment Cooling System market in 2024 as this power range aligns with critical applications such as renewable energy converters, industrial machinery, rail transport, and large-scale UPS systems. These applications require robust thermal management, but not the extreme solutions demanded by ultra-high-power environments. Medium power devices are being rapidly adopted in wind and solar installations, EV charging infrastructure, and smart grid systems, creating consistent demand for effective cooling solutions. Their balance between performance and cost efficiency makes them the most widely implemented category in power electronics equipment.

Download Free Sample Report

Regional Insights

Largest Region

North America dominates the Global Power Electronics Equipment Cooling System market in 2024 supported by its strong technological ecosystem, early adoption of advanced cooling solutions, and rising demand across multiple high-growth industries. The region’s leadership in data centers, electric vehicles, aerospace, and renewable energy significantly drives market expansion, as these sectors require advanced cooling systems to ensure performance stability and operational efficiency. The U.S. hosts some of the world’s largest data centers, where power densities are rapidly increasing, accelerating the shift toward both advanced air cooling and hybrid thermal management solutions.

The automotive sector, particularly in the U.S. and Canada, is another major driver. With EV penetration surpassing 1.2 million units sold in 2023 in the U.S., the demand for cooling systems in EV power electronics and charging infrastructure continues to surge. Additionally, government policies supporting clean energy and electrification initiatives are stimulating investments in renewable power plants and smart grid projects, all of which heavily depend on reliable thermal management solutions.

North America also benefits from the presence of global industry leaders, including Vertiv, Honeywell, Eaton, and Advanced Cooling Technologies, which invest in research and product innovations to meet evolving customer requirements. These companies focus on high-density cooling for mission-critical operations, setting industry benchmarks in energy efficiency and reliability. Furthermore, stringent regulations on energy consumption and carbon reduction in sectors like IT and manufacturing encourage businesses to adopt modern cooling systems that optimize operational sustainability.

Overall, North America’s dominance is underpinned by advanced industrial infrastructure, strong R&D investments, and high technology adoption rates. The convergence of data center growth, EV expansion, and renewable energy development ensures the region remains a powerhouse in driving demand for power electronics cooling systems in 2024.

Emerging Region

Europe is the emerging region in the Global Power Electronics Equipment Cooling System market in the coming period propelled by rapid electrification, renewable energy deployment, and stringent energy efficiency regulations. Countries such as Germany, France, and the UK are heavily investing in EV infrastructure and renewable energy projects, both of which rely on advanced thermal management technologies. Additionally, Europe’s emphasis on sustainable industrial practices is pushing industries to adopt efficient cooling systems that reduce energy losses and enhance operational reliability. The presence of leading automotive OEMs and rising digitalization trends also position Europe as a fast-growing market in the coming period.

Recent Developments

• In June 2025, RIR Power Electronics Ltd. has expanded production with the successful shipment of 1200V SiC diodes from Taiwan, through collaboration with Pro Asia Semiconductor Corporation and technology IP from Sicamore Semi, USA. The portfolio includes 1200V Schottky Barrier Diodes (2–60 amps), catering to diverse global applications. While supporting existing Indian and U.S. customers, Taiwan-based shipments enhance access to high-growth Southeast Asian markets, strengthening RIR Power’s global presence in the competitive SiC device industry.
• In July 2025, ABB has extended its title partnership with the ABB FIA Formula E World Championship, leveraging the platform to reinforce its brand positioning and showcase sustainable, high-performance technologies. Over eight seasons, the collaboration has demonstrated ABB’s role in industrial transformation and global customer engagement. The renewed phase will focus on expanding brand visibility, integrating ABB’s innovations within motorsport, and engaging Formula E’s growing fanbase, solidifying ABB’s image as a leader in clean, efficient, and advanced industrial solutions.
• In April 2025, The Ministry of Electronics and Information Technology (MeitY) announced new Transfer of Technology (ToT), Memoranda of Understanding (MoU), and Agreements (MoA) with industry stakeholders for commercializing power electronics technologies under the National Mission on Power Electronics Technology (NaMPET). Developed, tested, and certified with MeitY’s support, these technologies are now poised for market deployment. The initiative highlights India’s focus on indigenous innovation, strengthening domestic capabilities, and fostering commercialization in advanced power electronics to support national industrial growth and self-reliance.
• In March 2025, RIR Power Electronics Ltd. is establishing India’s first Silicon Carbide (SiC) semiconductor production facility in Odisha, with phase one Epitaxy Wafer production set for December 2025. Backed by a ₹618 crore investment, the project aligns with the “Make in India” initiative to manufacture high-power SiC MOSFETs and diodes (3.3kV–20kV). Supported by the Odisha government, the initiative strengthens domestic semiconductor manufacturing, supply chain resilience, and positions RIR Power as a leader in India’s high-power SiC semiconductor landscape.

Key Market Players

• Vertiv Holdings Co.             
• Aavid Thermalloy, LLC
• Advanced Cooling Technologies, Inc.
• Boyd Corporation
• Lytron Inc.
• Laird Thermal Systems
• Rittal GmbH & Co. KG
• Schneider Electric SE
• Johnson Controls International plc
• Noren Products Inc.           

Report Scope:

In this report, the Global Power Electronics Equipment Cooling System Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•  Power Electronics Equipment Cooling System Market, By Cooling Type:

o   Air Cooling

o   Liquid Cooling

o   Hybrid Cooling Systems

• Power Electronics Equipment Cooling System Market, By Power Rating:

o   Low Power (Below 500 kW)

o   Medium Power (500 kW – 5 MW)

o   High Power (Above 5 MW)

• Power Electronics Equipment Cooling System Market, By Application:

o   Automotive

o   Energy & Power

o   IT & Telecom

o   Industrial Manufacturing

o   Consumer Electronics

o   Others

• Power Electronics Equipment Cooling System Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  Germany

§  France

§  United Kingdom

§  Italy

§  Spain

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Asia-Pacific

§  China

§  India

§  Japan

§  South Korea

§  Australia

o   Middle East & Africa

§  Saudi Arabia

§  UAE

§  South Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Power Electronics Equipment Cooling System Market.

Available Customizations:

Global Power Electronics Equipment Cooling System Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).