Daikin Invests in New Lab for Next-Gen Data Centre Cooling

Daikin Applied has announced a US$163m investment in a new research and development test lab at its headquarters in Plymouth, Minnesota. 

The facility is designed to accelerate the development of next-generation HVAC technologies, with a significant focus on meeting the cooling demands of hyperscale and AI data centres.

The 71,000sq ft lab has begun phased commissioning with nine test cells, while full completion is planned for 2027. 

The site expands Daikin Applied’s capacity to replicate the operating extremes of dense compute environments and test high-performance cooling systems at scale. It forms a central part of the company’s strategy to strengthen its position in the fast-growing data centre HVAC market.

“Our commitment to HVAC innovation compels us to continually push the boundaries of what's possible. This world-class test lab is a powerful testament to that vision,” says Yu Nishiwaki, Chief Operating Officer at Daikin Applied Americas. 

“Innovation is at the heart of everything we do, and with this new facility, we are well-positioned to equip our customers with the advanced technologies required to meet the dynamic demands of today's environment.”

Supporting hyperscale and AI cooling demands

Daikin Applied is positioning the new lab to address the steep rise in data centre cooling requirements. 

With AI adoption and cloud expansion driving higher rack densities, cooling systems must be more efficient, adaptable and capable of handling extreme heat loads.

Daikin Applied references analyst estimates that the global data centre HVAC hardware market will grow from US$6.7bn in 2023 to US$16.6bn by 2030.

The facility will help Daikin Applied design and validate solutions for these environments at a much faster pace.

Four of the test cells are dedicated to airside technologies, which remain essential for operators balancing energy use, sustainability expectations and thermal performance.

“We are proud to take this significant step forward with the groundbreaking of our new innovation test lab, underscoring our commitment to shaping the future of data centres,” says Greg Jeffers, Vice President, Data Center Solutions at Daikin Applied Americas. 

“Data centres demand comprehensive cooling solutions, and this investment will accelerate the development of technologies that future-proof the critical infrastructure that powers our digital world."

Building a stronger data centre solutions portfolio

The new R&D lab follows a series of acquisitions that have expanded Daikin Applied’s data centre footprint. 

These acquisitions give the company broader coverage across both air and liquid cooling, allowing it to support hyperscale campuses and new AI-focused facilities requiring rapid deployment and high efficiency. 

The Plymouth lab strengthens that capability by providing a controlled environment for testing integrated cooling systems before commercial rollout.

Investment in US engineering and manufacturing

Daikin Applied’s expansion reinforces its long-term commitment to US manufacturing and engineering talent. 

The new lab leverages the skills base in the Minneapolis-St Paul region and will support the development and training of engineers and technicians working on advanced cooling technologies.

The site will operate alongside the Daikin Sustainability and Innovation Center in Washington, DC, forming part of a wider ecosystem for research, testing and product development. Daikin has grown its US workforce 2.3x since 2015 and now employs more than 25,000 people nationwide.

According to the company’s 2025 Business and Innovation Report, Daikin’s US operations represent more than US$9bn in cumulative investment across 25 manufacturing sites, with service and sales teams active in every state.

By expanding its research capabilities at Plymouth, Daikin Applied aims to support continued innovation in commercial and industrial HVAC systems, including specialised cooling solutions designed for the next generation of data centres.