Daikin Invests $163 Million in New R&D Lab to Develop Next-Generation Data Center Cooling
December 29, 2025
The explosive growth of artificial intelligence and cloud computing is driving unprecedented demand for data center capacity, placing immense pressure on the critical infrastructure required to keep these facilities operational. At the forefront of this challenge is the need for advanced cooling solutions, a market projected to surge from $6.7 billion in 2023 to $16.6 billion by 2030. Recognizing this strategic imperative, Daikin Applied, a leading global designer and manufacturer of commercial HVAC systems, has announced a major $163 million investment to construct a state-of-the-art testing laboratory at its headquarters in Plymouth, Minnesota.
The new 71,000-square-foot facility, slated to open in 2027, is designed to accelerate the development of next-generation cooling technologies for large-scale data centers. It will feature nine specialized test cells: four dedicated to air-based cooling systems and five focused on water-cooled and air-cooled chillers, heat pumps, and integrated systems. The lab's core function will be to simulate extreme operating conditions and test system limits under intense computational loads, enabling Daikin to push the boundaries of thermal management for the digital economy.
“Data centers have become the beating heart of the global economy,” said Yu Nishiwaki, chief operating officer for Daikin Applied Americas. He emphasized that each facility presents unique technical challenges, which “make cooling a critical and strategic priority.” The Plymouth lab is expected to leverage and strengthen the local talent pool in the Minneapolis-St. Paul area, providing ongoing training for engineers and technicians while complementing Daikin's existing research ecosystem.
This capital expenditure is part of a broader, multi-pronged strategy by Daikin to establish leadership in the data center cooling sector. The company has actively pursued growth through product innovation, the launch of a dedicated global business unit for data centers, and a series of strategic acquisitions. In recent months, Daikin acquired Chilldyne, a producer of negative-pressure liquid cooling systems, and DDC Solutions, a developer of hybrid air-liquid cooling technology. These moves, following the 2023 purchase of Alliance Air Products, aim to build what Nishiwaki describes as “a comprehensive suite of data center cooling solutions.”
Further investments in the Plymouth R&D lab are anticipated before its 2027 launch. The initiative aligns with other capacity expansions, including a new manufacturing facility in Phoenix, Arizona, set to open soon to meet soaring demand for large-tonnage cooling plants. Daikin Applied, which employs nearly 3,000 people in Minnesota, is a subsidiary of Daikin Industries, a global conglomerate operating 59 R&D labs worldwide.
Source: tcbmag
