The worldwide data center physical infrastructure (DCPI) market expanded 27% year-over-year to $14 billion in manufacturer revenue during the second quarter of 2026, according to Dell’Oro Group. Busway availability is among the constraints facing new installations.
Thermal management was the fastest-growing category, increasing more than 40% as operators invested in direct liquid cooling and heat-rejection systems. UPS revenue grew approximately 20% year-over-year, with demand for large three-phase systems supporting megawatt-class power blocks. Suppliers are preparing for medium-voltage power distribution and emerging 800VDC architectures.
I read this as a market growing fast but hitting physical limits.
Dell’Oro identified permitting, grid interconnection delays and community opposition as increasingly important constraints on new data center construction. My read: the revenue growth is real, but the ability to deliver new capacity is uncertain.
Colocation operators represented the largest customer segment, followed by hyperscalers. The Other Cloud category, including neoclouds and AI model developers, recorded the fastest growth. North America remained the largest regional market; Europe, the Middle East and Africa experienced their strongest growth since 2021.