The demand for valves in data centers across the U.S. and around the world is expected to remain strong with robust growth and sufficient supply to 2040.
By Robert McIlvaine – CEO – McIlvaine Company
Over the next 15 years — under the most optimistic forecast — the market for valves required at data centers around the world could grow from less than $1 billion per year to nearly $4 billion per year by 2040.
The need for large hyperscale data centers is increasing rapidly due to the use of AI. The load requirements are generally measured in electrical capacity in megawatts (MW). At the high end, there are forecasts for 300,000 MW of data center capacity by 2040.
The valve purchases are impacted by the amount of necessary cooling. There are a number of cooling options and varying use of valves. In the original data centers, raised floors were used to direct cool air across the electronic components contained in the room. Extracted air was then cooled by chillers. As the heat loads grew, the use of chilled water became common. More recently, with rear door systems, the chilled water cools the air in a single rack. The electricity consumption with this approach is substantial. As a result, a more efficient but expensive approach using dielectric fluids has been created. The electrical components are immersed in a dielectric fluid, which absorbs the heat. In this immersed cooling approach, the dielectric fluid is cooled through a chilled water or other fluid heat exchanger.
A small percentage of large hyperscale plants have been equipped with immersion cooling in the past, but the percentage will increase rapidly. Chilled water systems will dominate spending through 2030 after which the penetration of immersion cooling will be significant. Valve requirements are considerable since a 50 MW chilled water data center will use as much as 40,000 gallons per minute (GPM) of chilled water.
Close to 40% of the investment in valves for a chilled water data center is in actuated control valves. The majority of these valves are of the globe design. Air release valves are used to remove trapped air in the
piping. Butterfly valves are used for both regulation and isolation. For isolation, most of the investment is in gate and ball valves. There are more than 4,000 valves used in a 50 MW chilled water data center. Pricing ranges from hundreds to thousands of dollars per valve, depending on the size and application.
The demand for valves in data centers across the U.S. and around the world is expected to remain strong with robust growth and sufficient supply to 2040.
The electricity consumption used by data centers is substantial. However, more efficient but expensive approaches have been created. For control valves, the life is generally in excess of five years and in excess of 10 years for isolation valves. A large percentage of the purchases are made by owners of multiple data centers.
The replacement rate is driven as much by changes in design as the end of life. For control valves, the life is generally in excess of five years and in excess of 10 years for isolation valves. A large percentage of the purchases are made by owners of multiple data centers. The U.S. is the largest purchaser, but there are data centers being built around the world. The market for the next five years is relatively predictable, but uncertainty grows in 2030 to 2040. Traditionally, process valve manufacturers have not competed with the suppliers of valves for discreet applications.
The discrete valves are used for lubrication and hydraulic fluids. The same types of valves are used in heat transfers and air conditioning systems. The process valve manufacturer is looking for that segment of the data
center market that utilizes their valves. The market can be best understood by comparing primary fluids for cooling versus secondary. The primary fluids are air, chilled water, and dielectric fluids. Secondary methods are chillers, cooling towers, and district heating.
Chilled water will be dominant in the short term. Over the long term, dielectric fluids and district heating are going to be the primary and secondary methods. Europe is leading the way on the application of district heating and reduction of greenhouse gases. The beneficial use of data center heat will help accelerate the expansion of the data center industry.
About the Expert:
Robert McIlvaine founded the McIlvaine Company in 1974 and oversees the work of 30 analysts and researchers. He has a BA degree from Princeton University.