Japan Data Center Cooling Market

Japan Data Center Cooling Market Analysis

The Japan Data Center Cooling Market size is estimated at USD 258.00 million in 2025, and is expected to reach USD 471.96 million by 2031, at a CAGR of 10.59% during the forecast period (2025-2031).

• The increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers in the country/region.
• The upcoming IT load capacity of the Japan data center market is expected to reach 2100 MW by 2030. The country's construction of raised floor area is expected to increase to 10K sq. ft by 2030.
• The country's total number of racks to be installed is expected to reach 512K units by 2030. Osaka and Tokyo are expected to house the maximum number of racks by 2030. Throughout the year, temperatures typically fluctuate between 2°C and 30°C, rarely dropping below -1°C or above 0.5°C.
• There are close to 32 submarine cable systems connecting Japan, and many are under construction.

Japan Data Center Cooling Market Trends

Liquid-based Cooling is The Fastest Growing Segment

• Technological advances have made liquid cooling easier to maintain, more scalable, and more affordable, reducing data center liquid consumption by more than 15% in tropical climates and by 80% in greener areas. The energy used for liquid cooling can be recycled to heat buildings and water, and advanced artificial refrigerants can effectively reduce the carbon footprint of air conditioners.
• Some Japanese companies already use snow as a coolant for at least several months of the year. Based in Niigata prefecture on Japan's north coast, DataDock Inc. cools its servers in Nagaoka City with snowmelt and cold outside air.
• Japanese data center providers KDDI and NTT DATA are researching immersion technology to significantly reduce energy waste in cooling server hardware. In KDDI's field test, we achieved an astounding result of reducing power consumption during temperature control by 94% compared to conventional air cooling systems. KDDI said IT equipment is often thought of as the biggest consumer of power, but about half of the total power consumption in data centers is used for cooling.
• Direct liquid cooling (DLC) solutions can achieve partial power usage effectiveness (PUE) values ranging from 1.02 to 1.03, surpassing the efficiency of even the most advanced air cooling systems by a low single-digit margin. It is important to note, however, that PUE does not account for a significant portion of the energy efficiency improvements attributed to DLC. In traditional server setups, fans are responsible for power consumption within the server rack, and this power usage is factored into the IT power section of the PUE calculation. These fans are considered an integral part of the data center's overall energy consumption.

IT & Telecommunication is the Largest Segment

• Japan is home to major ICT organizations such as Sony, Panasonic, Fujitsu, NEC, and Toshiba, which continue to play a key role in the country's expansion as a major center for ICT. In addition, the orderly development of numerous modernization and expansion projects in the country, along with increasing government spending on maintaining high-quality and advanced infrastructure, are also driving the growth of the market.
• Global cloud service providers that generate big data, represented by mega-cloud platformers, are investing in data center in Japan. On the other hand, traditional enterprise data centers (or enterprise DCs) are in steady demand by mainstream companies. This is due to the growth in public cloud services. Public cloud services don’t require large-scale infrastructure investments, are typically stable in operation, and provide scalability and robustness.​
• In Japan, the growth of PaaS and IaaS is particularly noteworthy. Low barriers to adoption characterize both due to their low capital investment burden. The fact that they can be used as needed may also be a factor in accelerating their adoption by enterprises. According to Japanese Ministry of Internal Affairs and Communications, as for the public cloud services model, based on data collected from a sample of 1,042 businesses, 60.0% of companies using PaaS solutions use AWS (Amazon Web Services), followed by Azure (Microsoft Azure) at 48.2%, and GCP (Google Cloud Platform) at 28.8%. Among all IaaS users, AWS accounted for 54.7%, Azure 44.0%, and GCP 26.2%. Therefore, the data center computing capacity is increasing which would further accelerate the demand for advance cooling technology in Japan. ​

Japan Data Center Cooling Industry Overview

The Japan data center cooling market is moderately competitive and has recently gained a competitive edge. Currently, a few major players, including Stulz GmbH, Schneider Electric SE, Vertiv Group Corp., Daikin Industries Ltd, and Trane Inc., hold a dominant position in the market. These industry giants, boasting significant market shares, are actively engaged in expanding their customer base throughout the region. Their growth strategies primarily hinge on strategic collaborative efforts aimed at enhancing market share and overall profitability. Moreover, companies such as Schneider Electric SE, Johnson Controls Inc. offer both liquid and air based cooling products.

Japan Data Center Cooling Market Leaders

Japan Data Center Cooling Market News

• March 2023: Managed service provider (MSP) Interactive introduced its Immersion Data Center Cooling solution, aimed at enhancing high-performance computing (HPC) capabilities for its clientele. Collaborating with digital infrastructure provider Vertiv, MSP has integrated the system with green revolution cooling tanks. These tanks employ a single-phase, non-conductive coolant known for its electrical component safety and exceptional heat transfer capacity, reportedly 1200 times greater than that of air.
• March 2023: LiquidStack secured a significant investment from HVAC company Trane Technologies, signaling a new frontier in immersion cooling technology. LiquidStack's exclusive liquid immersion cooling technology sets a higher standard for sustainable data center cooling. These immersion cooling solutions align with the company's ambitious sustainability goals, which include reducing carbon emissions within its customer base by one billion tons by 2030 and achieving net-zero emissions by 2050. Moreover, they assist in achieving