Key Insights

The Israel data center cooling market, valued at $15.80 million in 2025, is projected to experience robust growth, exhibiting a Compound Annual Growth Rate (CAGR) of 15.4% from 2025 to 2033. This expansion is driven by several key factors. The increasing adoption of cloud computing and big data analytics within Israel's burgeoning technology sector is fueling demand for advanced data center infrastructure, including sophisticated cooling solutions. Furthermore, stringent government regulations aimed at improving energy efficiency and reducing carbon emissions are incentivizing the adoption of more efficient cooling technologies, such as liquid-based cooling systems, over traditional air-based methods. The growth is also fueled by the expansion of the IT and Telecommunication, BFSI (Banking, Financial Services, and Insurance), and Government sectors, all of which are significant consumers of data center resources in Israel. Competitive landscape includes major global players like Johnson Controls, Schneider Electric, and Vertiv, alongside specialized regional providers, fostering innovation and driving down costs.

The market segmentation reveals a dynamic interplay between cooling technology and end-user industries. While air-based cooling currently dominates, the market share of liquid-based cooling is expected to increase significantly over the forecast period due to its superior efficiency and scalability. The IT and Telecommunication sector is the largest consumer of data center cooling solutions, followed by the BFSI and Government sectors. However, growth in the Media and Entertainment, and other end-user sectors is anticipated to contribute significantly to the overall market expansion. Challenges include the high initial investment costs associated with advanced cooling technologies and potential supply chain disruptions. However, the long-term benefits in terms of energy savings and operational efficiency are expected to outweigh these initial hurdles, contributing to sustained market growth throughout the forecast period.

Israel Data Center Cooling Market: 2019-2033 Forecast

This comprehensive report provides an in-depth analysis of the Israel Data Center Cooling market, offering invaluable insights for stakeholders across the value chain. The study period covers 2019-2033, with 2025 as the base year and a forecast period spanning 2025-2033. The report meticulously examines market size, growth drivers, challenges, competitive landscape, and future outlook, providing actionable intelligence for strategic decision-making. The market is segmented by cooling technology (air-based, liquid-based), and end-user (IT & Telecommunication, BFSI, Government, Media & Entertainment, Other). Key players analyzed include Johnson Controls International PLC, Asetek A/S, Schneider Electric SE, Emerson Electric Co, Mitsubishi Electric Hydronics & IT Cooling Systems SpA, Fujitsu General Limited, Stulz GmbH, Airedale International Air Conditioning, Vertiv Group Corp, and Rittal GMBH & Co KG. This is not an exhaustive list.

Israel Data Center Cooling Market Market Structure & Competitive Dynamics

The Israel Data Center Cooling market exhibits a moderately concentrated structure, with a few dominant players holding significant market share. The market share of the top five players is estimated at xx% in 2025. Innovation in cooling technologies is crucial, driven by the increasing demand for high-density computing and energy efficiency. The regulatory framework, while supportive of data center growth, is also focused on environmental sustainability, influencing the adoption of energy-efficient cooling solutions. Product substitutes, such as adiabatic cooling systems, are gaining traction, posing a competitive threat to traditional air-based systems. End-user trends indicate a growing preference for liquid-based cooling solutions in high-performance computing environments. M&A activity in the sector has been moderate, with deal values totaling approximately xx Million in the past five years. Several strategic partnerships and collaborations are observed, fostering innovation and market expansion.

• Market Concentration: Moderately concentrated, with top 5 players holding xx% market share (2025).
• Innovation Ecosystem: Strong focus on energy-efficient and high-density cooling solutions.
• Regulatory Framework: Supportive of data center growth with an emphasis on sustainability.
• Product Substitutes: Adiabatic cooling systems present a competitive challenge.
• End-User Trends: Shift towards liquid cooling for high-performance applications.
• M&A Activity: Moderate activity, with total deal values estimated at xx Million (2019-2024).

Israel Data Center Cooling Market Industry Trends & Insights

The Israel Data Center Cooling market is experiencing robust growth, fueled by the rapid expansion of data center infrastructure and the surging demand for high-performance computing (HPC). This growth is projected to continue at a significant CAGR throughout the forecast period (2025-2033), driven by several key factors. Technological advancements, such as the increasing adoption of liquid immersion cooling and other sophisticated thermal management solutions, are revolutionizing the market. Simultaneously, a growing emphasis on sustainability and energy efficiency is shaping consumer preferences, aligning with global environmental initiatives and prompting the exploration of eco-friendly cooling technologies. The competitive landscape is characterized by intense rivalry among both established industry giants and innovative newcomers, fostering continuous innovation and price optimization. This dynamic interplay is expected to propel the market penetration of liquid-based cooling systems to xx% by 2033, a substantial increase from xx% in 2025, primarily driven by the escalating demand for high-density computing capabilities in modern data centers. The burgeoning adoption of AI and machine learning applications further intensifies the demand for efficient cooling solutions.

Dominant Markets & Segments in Israel Data Center Cooling Market

The IT and Telecommunications sector reigns supreme as the largest segment within the Israel Data Center Cooling market, largely propelled by the explosive growth of cloud services and the widespread adoption of digital transformation initiatives across various industries. The Tel Aviv metropolitan area emerges as the dominant geographical region, leveraging its robust IT infrastructure, a thriving startup ecosystem, and a supportive government policy environment that fosters digital innovation.

• Leading Segment: IT and Telecommunication
  • Key Drivers: Exponential growth of cloud services, widespread digital transformation, and the increasing demand for high-density computing to support data-intensive applications like AI and Big Data analytics.
• Dominant Region: Tel Aviv metropolitan area
  • Key Drivers: A well-established IT infrastructure, a thriving startup ecosystem attracting significant investment, and government initiatives promoting digital innovation.
• Cooling Technology: While air-based cooling currently holds the largest market share, liquid-based cooling is experiencing remarkable growth.
  • Key Drivers: The cost-effectiveness of air-based systems for lower-density deployments, coupled with the increasing demand for liquid cooling solutions to handle the heat generated by high-density computing environments and HPC applications.

Israel Data Center Cooling Market Product Innovations

Recent innovations include the introduction of more efficient air-cooled systems, advanced liquid cooling technologies (such as immersion cooling), and intelligent thermal management solutions. These advancements address the growing need for high-density cooling, reduced energy consumption, and improved operational efficiency in data centers. The market is witnessing increased integration of AI and machine learning for predictive maintenance and optimized cooling performance.

Report Segmentation & Scope

This comprehensive report segments the Israel Data Center Cooling market based on two key parameters: cooling technology (air-based cooling, liquid-based cooling) and end-user (IT and Telecommunication, BFSI, Government, Media and Entertainment, and Other End Users). The report provides a detailed analysis of each segment, encompassing growth projections, market size estimations, and a comprehensive assessment of competitive dynamics. While air-based cooling currently commands the largest market share, the report projects substantial growth for liquid-based cooling, driven by the escalating demand from high-performance computing deployments and hyperscale data centers. The IT and Telecommunication segment maintains its dominance in end-user demand, reflecting the rapid expansion of the digital economy and its corresponding data center needs.

Key Drivers of Israel Data Center Cooling Market Growth

The growth of the Israel Data Center Cooling market is fueled by several factors, including the rapid expansion of data centers, the increasing adoption of cloud computing and big data analytics, government initiatives supporting digital infrastructure, and the growing demand for high-performance computing. Stringent environmental regulations are also pushing for the adoption of energy-efficient cooling solutions.

Challenges in the Israel Data Center Cooling Market Sector

The Israel Data Center Cooling market faces several key challenges. High energy costs present a significant hurdle, coupled with the limited availability of water resources, which can pose constraints for certain cooling technologies. Furthermore, the industry requires a skilled workforce to install and maintain complex cooling systems, and the competition from global players creates a significant challenge for local market participants. Finally, supply chain disruptions and their impact on component availability and cost pose a significant risk to market growth.

Leading Players in the Israel Data Center Cooling Market Market

• Johnson Controls International PLC
• Asetek A/S
• Schneider Electric SE
• Emerson Electric Co
• Mitsubishi Electric Hydronics & IT Cooling Systems SpA
• Fujitsu General Limited
• Stulz GmbH
• Airedale International Air Conditioning
• Vertiv Group Corp
• Rittal GMBH & Co KG

Key Developments in Israel Data Center Cooling Market Sector

• January 2024: Aligned launched DeltaFlow, a liquid cooling system capable of cooling densities up to 300 kW per rack.
• March 2024: Kelvion and Rosseau partnered to deliver enhanced immersion cooling solutions for the HPC market.

Strategic Israel Data Center Cooling Market Market Outlook

The Israel Data Center Cooling market presents significant growth potential driven by the continued expansion of the digital economy and the increasing demand for high-performance computing. Strategic opportunities exist for companies focusing on energy-efficient and sustainable cooling solutions, as well as those providing advanced thermal management technologies. The market is expected to consolidate further, with larger players acquiring smaller companies to enhance their product portfolio and expand their market reach.

Israel Data Center Cooling Market Segmentation

• 1. Cooling Technology
  • 1.1. Air-based Cooling
    • 1.1.1. Chiller and Economizer
    • 1.1.2. CRAH
    • 1.1.3. Cooling
    • 1.1.4. Others
  • 1.2. Liquid-based Cooling
    • 1.2.1. Immersion Cooling
    • 1.2.2. Direct-to-Chip Cooling
    • 1.2.3. Rear-Door Heat Exchanger
• 2. Type
  • 2.1. Hyperscalers (owned & Leased)
  • 2.2. Enterprise (On-premise)
  • 2.3. Colocation
• 3. End user Vertical
  • 3.1. IT & Telecom
  • 3.2. Retail & Consumer Goods
  • 3.3. Healthcare
  • 3.4. Media & Entertainment
  • 3.5. Federal & Institutional agencies
  • 3.6. Other end-users

Israel Data Center Cooling Market Segmentation By Geography

• 1. Israel