OSAKA — Japan’s Daikin Industries has acquired two U.S. key air conditioner system suppliers for 30 billion yen ($260 million) in a move to capture the fast-growing data center business, Nikkei has learned.
The two U.S. companies are Alliance Air Products headquartered near San Diego, California, and CM3 Building Solutions based in Fort Washington, Pennsylvania.
Osaka-based Daikin, the world’s largest maker of air conditioners, is already a leader in the consumer market. The acquisitions are aimed at making Daikin a major player in the business of supplying air conditioners to data centers, a market growing at over 10% a year. In the U.S., Daikin is aiming to be number one in this segment, which is seeing rising competition.
Alliance Air Products has expertise in the development of components that dispense cold air, while CM3 Building Solutions designs energy management systems for buildings. Daikin hopes that the acquisitions will allow it to supply large-scale air-conditioning systems in complete packages.
Alliance Air produces in Mexico, which could provide Daikin with a key cost advantage. Data centers require special components, and other such makers tend to make them in the U.S.
The construction of data centers is expected to continue to grow, as fifth-generation communications technology gains traction, allowing cars, factories and infrastructure to be connected via the internet and to be monitored in real time.
Data centers are expected to bring about a more connected society, but there are worries that they consume huge amounts of electricity. The cost of operating air conditioners accounts for 30% or more of power consumption at data centers.