NEW YORK, Sept. 30, 2025 /PRNewswire/ -- A new in-depth report by The Insight Partners highlights the growth of the water-cooled chillers market, driven by industries focusing on retrofitting and replacing older systems. The comprehensive analysis delves deeply into market size, emerging trends, profiles key industry players, and uncovers strategic opportunities that are shaping the industry landscape. With a focus on key market segments and applications, the water-cooled chillers market report highlights the factors expected to drive market momentum in the years ahead.
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Valued at US$1.80 billion in 2024. The market is projected to reach US$2.69 billion by 2031, registering a strong CAGR of 6.0% (2025-2031). This growth is driven by the increasing demand for industrial and process cooling, as well as industries focusing on retrofitting and replacing older systems, and the expansion of the data center sector.
Expanding Data Center Sectors Set to Shape Industry Outlook
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Surging adoption of water cooled chillers, especially continuous flow chillers, among industrial manufacturing, food and beverage processing, medical equipment, and others.
Future market opportunities lie in the demand for smart/connected water cooled chillers, technological improvements, and growth in high-capacity applications, which accelerate the adoption of advanced water-cooled chillers.
Growth in High-Capacity Applications
The rapid expansion of high-capacity applications, such as data centers, mega-industrial plants, and specialized medical facilities, creates significant growth opportunities for advanced cooling solutions, particularly large water-cooled chillers. As computing loads grow-due to widespread adoption of AI technologies, cloud computing, and big data analytics-data centers will increasingly have to deal with vast amounts of heat removal. Thermal management is important not only for keeping the computers in optimal conditions but is also required to maintain consistent performance in sensitive hardware and extend operational lifetime. Water cooled chillers provide the best cooling efficiency, and are suited to handling vast heat loads. Additionally, some chillers offer precise temperature control with minimal energy consumption. This ability to precisely cool, further makes water cooled chillers vital to data center infrastructure.
Growing Need for Industrial and Process Cooling Drives Water Cooled Chillers Market Growth
The growing need for industrial and process cooling is a significant driver behind the increasing adoption of water-cooled chillers across various sectors. As industries such as manufacturing, pharmaceuticals, food and beverage processing, petrochemicals, and data centers continue to expand, the demand for consistent, efficient, and large-scale cooling solutions intensifies. Water cooled chillers are particularly well-suited to meet these demands due to their higher energy efficiency and ability to handle large cooling loads compared to air-cooled alternatives.
In industrial settings, precise temperature control is critical for maintaining product quality, ensuring process stability, and preventing equipment overheating. Water-cooled chillers, which utilize water as a heat exchange medium, provide stable and reliable cooling, essential in environments where heat loads fluctuate or operate continuously.
Geographical Insights
According to the water-cooled chillers market analysis, the Asia Pacific led the market in 2024, capturing the highest revenue share. This dominance was driven by the adoption of sophisticated, water-cooled chillers for maintaining continuous processing, especially in industrial manufacturing, food and beverage processing, medical equipment, and other applications. North America and Europe followed closely, reflecting steady growth in the industrial manufacturing and medical equipment sectors.
The water cooled chillers market forecast indicates that the Asia Pacific is set to register the highest CAGR in the coming years, driven by booming construction sector-particularly in commercial buildings, airports, malls, and hotels. This projected growth marks a geographic shift in market momentum, offering substantial opportunities for water-cooled chillers companies to scale their regional operations and establish strategic partnerships.
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Market Segmentation
• Based on process, the market is analyzed considering the following sub-segments: continuous flow chillers and immersion chillers. Among these, the continuous flow chillers segment held the largest water-cooled chillers market share in 2024, asserting its dominance due to its highly beneficial nature for industries relying on consistent and uninterrupted cooling processes.
• In terms of application, the market share is evaluated across the following sub-segments: industrial manufacturing, food and beverage processing, medical equipment, and other sectors. The industrial manufacturing segment captured the largest share of the water-cooled chillers market in 2024, owing to the demand for precise temperature control, which ensures consistent product quality and equipment longevity.
• On the basis of type, the market share is evaluated considering the following sub-segments: machine tool, laser system, and others. The machine tools segment captured the largest share of the water-cooled chillers market in 2024, owing to the growing requirement for efficient cooling systems to maintain performance and prevent thermal damage.
Competitive Landscape and Major Developments
- Key Players: A few major companies operating in the market include Stulz SpA, Mitsubishi Heavy Industries Ltd., Daikin Industries Ltd., Johnson Controls International Plc, Panasonic Holdings Corp., HYDAC International GmbH, Blue Star Ltd., Carrier Global Corp., Trane Technologies Plc, and Thermo Fisher Scientific Inc.
- Trending Topics: Air cooled chillers, modular chiller systems, district cooling systems, industrial process cooling, and data center cooling
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i) Daikin Applied has introduced the Magnitude WME-D, a next-generation water-cooled centrifugal chiller featuring a two-stage, oil-free compressor and a low global warming potential (GWP) refrigerant, R-515 B.
ii) Johnson Controls, the global leader in smart, healthy, and sustainable buildings, announced the launch of the YORK YVWH Water-to-Water Dual Variable Speed Screw Heat Pump, the first screw heat pump in North America to utilize R-1234ze refrigerant.
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Conclusion
The growing need for industrial and process cooling, the expanding data center sector, and industries focusing on retrofitting and replacing older systems drive the growth of the water-cooled chillers market. Moreover, developing modular/scalable chiller systems, shifting toward low-gwp refrigerants, and growing commercial & industrial construction is a key market trend.
With a growing number of water-cooled chillers providers entering the market, buyers now benefit from enhanced choice, competitive pricing, and shorter lead times. This shift has significantly increased the bargaining power of buyers, a trend projected to continue through 2031.
At the same time, the market is witnessing unprecedented competitive intensity. Across geographies, a large pool of water-cooled chillers providers are battling for market share based on system performance, component capabilities, price competitiveness, and delivery timelines.
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