Global In-Rack Coolant Distribution Unit (CDU) Market Size, Share, Trends and Forecasts 2031

Key Findings

• The in-rack coolant distribution unit (CDU) market focuses on liquid cooling subsystems designed to manage, circulate, and monitor coolant flow within high-density server racks in data centers.

• The surge in AI workloads, high-performance computing (HPC), and advanced GPU deployments is accelerating the adoption of in-rack CDUs for efficient thermal management.

• In-rack CDUs serve as the intermediary between facility-level cooling loops and server-level cold plates, ensuring controlled and balanced coolant distribution.

• The transition from air-based to liquid-based cooling is driven by increasing rack power densities, often exceeding 80–100 kW, making CDUs essential for energy efficiency and reliability.

• Integration of smart sensors, digital flow controls, and predictive monitoring is enhancing operational safety and thermal performance.

• Modular and compact in-rack CDU designs are becoming preferred solutions for space-constrained environments and retrofitted facilities.

• North America and Asia-Pacific dominate the global market due to rapid expansion of hyperscale and edge data centers supporting AI, cloud, and 5G infrastructure.

• Advanced materials with high corrosion resistance and dielectric coolants are improving longevity, system reliability, and maintenance efficiency.

• Liquid cooling adoption is further propelled by sustainability goals, as it significantly reduces energy consumption and improves Power Usage Effectiveness (PUE).

• Collaboration among data center operators, cooling system OEMs, and component manufacturers is fostering standardization and scalability across diverse deployment environments.

In-Rack Coolant Distribution Unit (CDU) Market Size and Forecast

The global in-rack coolant distribution unit (CDU) market was valued at USD 520 million in 2024 and is projected to reach USD 1.25 billion by 2031, growing at a CAGR of 13.2%.

Growth is primarily driven by the rise in rack-level thermal loads due to AI-driven servers, HPC clusters, and GPU accelerators that demand precision liquid cooling. In-rack CDUs allow localized heat removal and help maintain stable thermal conditions for dense compute racks. Unlike facility CDUs, which serve multiple racks, in-rack units provide dedicated cooling management for specific enclosures, optimizing performance and energy efficiency. The industry is shifting toward intelligent CDUs integrated with sensors and IoT-based monitoring systems, enabling predictive maintenance and reducing downtime.

Market Overview

In-rack CDUs are self-contained thermal management systems responsible for circulating coolant between the primary cooling loop and in-rack heat exchangers or cold plates. These units regulate flow rate, pressure, and temperature while isolating facility coolant from server-side circuits to prevent contamination and leakage. The market has gained traction as traditional air-based cooling systems struggle to dissipate heat generated by dense server configurations, especially in AI and HPC environments.

The adoption of liquid cooling technologies such as direct-to-chip and rear-door heat exchangers necessitates precise coolant management, making CDUs indispensable. Their compact design allows deployment in individual racks, providing flexibility, scalability, and energy efficiency for both new and retrofitted data centers.

Future Outlook

The future of the in-rack CDU market will be defined by AI integration, enhanced energy recovery, and eco-friendly coolant adoption. Next-generation CDUs will feature automated thermal balancing and adaptive flow control powered by machine learning algorithms. The use of dielectric coolants and closed-loop systems will expand, ensuring safety and compatibility with high-voltage components.

Manufacturers will focus on modular architectures that support easy maintenance and rapid scalability across distributed data center environments. As organizations aim to meet sustainability and net-zero targets, liquid cooling systems with intelligent CDUs will become a fundamental requirement for optimizing data center energy consumption. Furthermore, integration with digital twin platforms will enable real-time simulation and performance optimization for large-scale cooling networks.

In-Rack Coolant Distribution Unit (CDU) Market Trends

• Rising Adoption of High-Density AI and HPC Workloads
  The deployment of AI training clusters and HPC systems with GPUs and ASICs has increased rack power consumption, demanding advanced cooling solutions. In-rack CDUs manage precise thermal loads by regulating liquid temperature and flow rates directly at the rack level. Their ability to handle high-density workloads efficiently supports continuous operation of AI servers without thermal throttling. As organizations expand AI infrastructure, in-rack CDUs are becoming a core component of next-generation data center cooling strategies.

• Integration of Intelligent Monitoring and Control Systems
  The integration of smart sensors and AI-based control algorithms enables real-time monitoring of coolant flow, pressure, and temperature within CDUs. Predictive analytics detect potential failures and optimize performance by adjusting parameters dynamically. Digital interfaces support remote management, improving uptime and reducing maintenance costs. Integration with building management systems (BMS) allows centralized control across multiple racks. The convergence of IoT and AI is transforming CDUs into intelligent thermal control systems for adaptive cooling environments.

• Miniaturization and Modular Architecture Development
  Modular and compact CDUs are increasingly being adopted for space-limited edge data centers and retrofitted environments. These systems enable flexible deployment and easy scalability without major infrastructure overhauls. Modular units allow operators to add or remove cooling capacity as workloads fluctuate. The compact design simplifies integration with existing rack systems and minimizes installation complexity. Miniaturization also enhances deployment efficiency in decentralized and distributed data center setups.

• Shift Toward Dielectric and Environmentally Friendly Coolants
  The use of non-conductive dielectric coolants is gaining prominence due to their superior safety and insulation properties. These coolants prevent electrical short circuits, reduce corrosion risks, and enable direct contact cooling for high-performance servers. Environmentally friendly fluids with low global warming potential (GWP) and recyclability are becoming industry standards. Manufacturers are innovating fluid formulations that balance high thermal conductivity with long operational lifespans. This trend aligns with the growing emphasis on sustainable and eco-efficient cooling solutions.

• Energy Efficiency and PUE Optimization Initiatives
  Data center operators are focusing on achieving lower Power Usage Effectiveness (PUE) values through advanced liquid cooling strategies. In-rack CDUs optimize heat removal at the source, minimizing reliance on energy-intensive air conditioning systems. By improving thermal efficiency, CDUs contribute to a significant reduction in overall data center energy consumption. Integration with heat reuse systems further enhances sustainability by redirecting waste heat for facility heating or industrial applications. This trend is shaping the future of energy-efficient data center design worldwide.

• Collaborations and Standardization Across Cooling Ecosystems
  Collaborative initiatives among cooling system OEMs, data center operators, and standards organizations are promoting interoperability and best practices. Industry alliances aim to establish uniform guidelines for coolant interfaces, pressure ratings, and control communication protocols. Standardization reduces integration complexity and improves scalability for global deployments. These partnerships are critical in advancing liquid cooling adoption and ensuring cross-compatibility among CDUs, manifolds, and cold plate technologies.

Market Growth Drivers

• Increasing Rack Power Density in Data Centers
  Modern servers, powered by GPUs and AI accelerators, generate massive heat loads per rack. In-rack CDUs address this challenge by providing precise liquid cooling directly at the rack level. They ensure efficient heat transfer and stable temperature control even under continuous high-performance workloads. As rack power density continues to rise, CDUs have become a necessity for maintaining operational stability and preventing thermal bottlenecks.

• Rapid Expansion of Hyperscale and Edge Data Centers
  The proliferation of hyperscale and edge facilities worldwide is driving the demand for localized cooling solutions. In-rack CDUs offer scalable thermal management that supports high-density configurations in both centralized and distributed environments. Their modular design makes them ideal for edge deployments where space and infrastructure are limited. As cloud providers and telecom operators expand their data footprints, in-rack CDUs are emerging as critical enablers of reliability and performance.

• Adoption of Liquid Cooling to Replace Air Cooling Systems
  The limitations of traditional air-based cooling methods have become evident as processors and GPUs exceed 500W TDP. Liquid cooling systems, supported by CDUs, offer superior heat dissipation and energy efficiency. In-rack CDUs facilitate closed-loop liquid distribution, ensuring isolation from facility systems and eliminating leakage risks. Their adoption is accelerating as operators aim to achieve higher cooling efficiency and reduced energy costs.

• Integration with AI and Predictive Maintenance Technologies
  AI-powered CDUs capable of predictive diagnostics and automated performance tuning are revolutionizing data center operations. By analyzing sensor data, AI algorithms can detect flow imbalances, pressure anomalies, and pump wear in real time. This predictive capability reduces maintenance downtime and extends equipment lifespan. Integration of AI-driven analytics makes in-rack CDUs more autonomous and reliable for mission-critical applications.

• Global Push Toward Sustainable and Green Data Centers
  Environmental sustainability goals are driving the shift toward liquid cooling systems that minimize energy waste. In-rack CDUs improve energy efficiency by reducing reliance on CRAC (computer room air conditioning) systems. They also enable integration with waste heat recovery and renewable energy infrastructure. As governments and corporations adopt net-zero commitments, liquid cooling technologies supported by CDUs play a central role in achieving sustainability targets.

• Technological Advancements in Coolant Control and Material Engineering
  Innovations in fluid dynamics, corrosion-resistant materials, and sensor integration are enhancing CDU performance. Advanced pump designs ensure consistent flow stability under variable load conditions. High-grade stainless steel, composite alloys, and leak-proof seals improve system durability. Combined with smart electronics and real-time monitoring, these advancements are expanding the operational efficiency and safety of in-rack CDUs.

Challenges in the Market

• High Initial Investment and Deployment Cost
  The transition to liquid cooling infrastructure, including CDUs, requires significant upfront capital expenditure. Installation involves plumbing, monitoring, and integration with existing systems, which can deter smaller data centers. While operational savings are achieved over time, initial costs remain a barrier to entry for many enterprises. Vendors are developing modular and retrofit-friendly designs to lower adoption thresholds.

• Complexity of System Integration and Maintenance
  Integrating CDUs into existing data center infrastructure requires precise alignment with manifolds, cold plates, and facility cooling loops. Maintenance of pumps, valves, and sensors adds operational complexity. Any malfunction or leak could disrupt cooling continuity, emphasizing the need for skilled technicians. Simplifying integration through standardized interfaces remains a key industry challenge.

• Limited Awareness Among Mid-Tier Data Center Operators
  While hyperscale operators are adopting liquid cooling rapidly, smaller enterprises often lack awareness of CDU benefits. Misconceptions about leakage risk and maintenance challenges slow market penetration. Awareness initiatives and demonstration projects are essential to drive adoption across diverse segments. Overcoming educational and perception barriers is critical to scaling liquid cooling adoption.

• Thermal Balancing and Control Precision Challenges
  Maintaining uniform coolant temperature and flow across multiple racks or servers requires high-precision control. Variations in load distribution can cause localized overheating or pressure imbalances. Continuous calibration and control optimization are necessary to ensure consistent performance. Developing adaptive algorithms and self-balancing systems is vital to addressing these challenges effectively.

• Supply Chain Vulnerabilities in Key Components
  The production of specialized pumps, sensors, and valves used in CDUs depends on a limited supply chain. Global disruptions or raw material shortages can delay delivery and increase costs. Ensuring component standardization and supply diversification is essential for market stability. Manufacturers are focusing on regionalized supply chains to enhance resilience and reduce lead times.

• Lack of Global Standardization and Certification
  Variations in liquid cooling design standards across regions create interoperability issues among CDUs, manifolds, and facility systems. Certification processes for pressure ratings and safety compliance differ among regulatory bodies. The absence of unified global standards limits cross-market deployment efficiency. Industry associations are working to develop harmonized protocols to support scalability and adoption.

In-Rack Coolant Distribution Unit (CDU) Market Segmentation

By Type

• Rack-Mounted CDUs

• Modular Compact CDUs

• High-Density Liquid CDUs

• Custom and Retrofit CDUs

By Coolant Type

• Water-Based Coolants

• Dielectric Fluids

• Glycol Mixtures

• Nanofluid and Phase-Change Coolants

By Application

• Hyperscale Data Centers

• Edge Data Centers

• Enterprise Data Centers

• High-Performance Computing (HPC) Facilities

By Component

• Pumps and Valves

• Heat Exchangers

• Sensors and Flow Controllers

• Monitoring and Control Systems

By Region

• North America

• Europe

• Asia-Pacific

• Latin America

• Middle East & Africa

Leading Key Players

• CoolIT Systems Inc.

• Asetek A/S

• Vertiv Holdings Co.

• Schneider Electric SE

• Rittal GmbH & Co. KG

• Submer Technologies

• Boyd Corporation

• STULZ GmbH

• Motivair Corporation

• Laird Thermal Systems

Recent Developments

• CoolIT Systems Inc. introduced an AI-integrated in-rack CDU platform with adaptive flow control for next-generation data centers.

• Asetek A/S launched a compact CDU series with leak-free quick disconnect technology for direct-to-chip cooling architectures.

• Vertiv Holdings Co. expanded its liquid cooling portfolio with modular CDUs featuring integrated smart monitoring and redundancy features.

• Submer Technologies developed a high-capacity CDU compatible with both immersion and direct liquid cooling environments.

• Rittal GmbH & Co. KG unveiled scalable rack-level CDU units engineered for multi-rack liquid cooling ecosystems.

This Market Report Will Answer the Following Questions

• What is the global market outlook for in-rack coolant distribution units through 2031?

• Which CDU types and configurations are leading adoption across data center segments?

• How does liquid cooling improve energy efficiency and PUE performance?

• What technological advancements are transforming CDU design and operation?

• How are AI and IoT shaping the next generation of intelligent CDUs?

• Which materials and coolants are best suited for long-term reliability and sustainability?

• What are the key challenges in deployment, integration, and standardization?

• Which regions and sectors represent the highest growth potential?

• Who are the major players and what innovations define their competitive edge?

• How will environmental and efficiency regulations influence the future evolution of in-rack CDUs?