Global Data Center Physical Infrastructure Market Expected to Surpass $120 Billion by 2030

Data Center Physical Infrastructure Forecast

According to the latest report released by the Dell'Oro Group, a trusted authority in telecommunications and data center market insights, the worldwide Data Center Physical Infrastructure (DCPI) sector is set to experience significant growth. By the year 2030, the market is projected to reach a staggering $120 billion, boasting a compound annual growth rate (CAGR) of 22% between 2025 and 2030.

A primary driver behind this upwards trajectory is the substantial increase in installed IT capacity across data centers worldwide. Most of the revenue growth can be attributed to net additions to this capacity, highlighting the ever-growing demand for data handling and processing capabilities. Furthermore, advancements in higher-density and liquid-cooled data center architectures are expected to redistribute spending across various DCPI categories.

The Evolution of Demand

As Alex Cordovil, Research Director at Dell'Oro Group, explained, the demand for data center infrastructure is no longer a question mark; rather, the focus has shifted towards delivery challenges. Factors such as extended equipment lead times, the availability of construction labor, grid interconnection, and community consents are becoming increasingly constrained. Notably, the first statewide data center moratorium is now making its impact felt on market dynamics.

Key Highlights from the Forecast

1. Capacity Additions Peak in 2026: The annual net capacity additions will reach their peak in 2026, witnessing robust growth rates before gently moderating. Despite this moderation, the growth is expected to remain strong, with double-digit growth levels persisting through 2030. North America is predicted to lead these capacity additions, followed closely by China.

2. Thermal Management Dominates: In the realm of DCPI, thermal management continues to be the fastest-growing segment. Liquid cooling technologies are particularly surging as rack densities increase, turning what was once an option into a necessity for operational efficiency. The report indicates that water-cooled chillers will see faster growth compared to air-cooled units, driven by their scalability and reliability during peak operational conditions.

3. UPS Growth in Larger Systems: The uninterruptible power supply (UPS) segment is primarily expanding within higher-rated three-phase systems, which are essential as AI clusters push deployments further along the capacity curve. Medium-voltage designs are gaining traction, allowing UPS systems to connect more efficiently to the grid.

4. Hyperscalers and Colocation Demand: Hyperscale data centers will emerge as the largest contributors to DCPI revenue by the end of the forecast period. However, their growth has decelerated as they increasingly rely on colocation partners to meet demands, especially outside the U.S. Meanwhile, AI-specialized clouds are emerging as one of the fastest-growing segments, catering to new technological advances.

5. Regional Dynamics: While North America remains the leader in growth, China's infrastructural expansion is noteworthy. However, the EMEA region has faced adjustments due to challenges like power availability and stringent permits, indicating a more cautious growth outlook compared to previous forecasts.

Conclusion

In summary, the Data Center Physical Infrastructure market is in the midst of a dynamic transformation, driven by technological advancements, evolving demand patterns, and various infrastructural challenges. Organizations looking to stay ahead in this competitive landscape must navigate the complexities of supply chains and market receptiveness to ensure they capitalize on the projected growth opportunities as they arise. For organizations seeking in-depth insights into this evolving market, the Dell'Oro Group provides comprehensive reports that deliver detailed analytics of current trends, future projections, and competitive positioning.

For more details, reach out to Dell'Oro Group directly at +1.650.622.9400 or visit their official website at www.delloro.com.