From the GenAI boom to PFAS concerns and the rise of automation, the water and fluid handling industries face a raft of opportunities and challenges in 2025. Companies that expand their reach and access new markets will be best placed to thrive in this rapidly evolving environment. Sagentia Innovation has identified three key areas set to define the sector in the year ahead.

1. The thirst of GenAI-adjacent industries

Surging demand for GenAI is driving huge growth in the number of datacentres, which are highly dependent on cooling infrastructure. While traditional systems use air cooling, we’re seeing a marked shift to liquid cooling.

There are two approaches to liquid cooling for semiconductor chips. On-chip cooling pumps fluid directly to cold plates in contact with chips, whilst immersion cooling submerges chips in a dielectric liquid. Both approaches require intelligent flow design and pumping to maximise efficiency, along with careful control of particulates to avoid clogging and catastrophic downtime.

In parallel, geographic concerns, commercial competition, and legislative pressures are driving rapid growth of the microelectronics industry. Google’s Trillium AI Tensor Processing Units (TPU) have emerged to counter Nvidia’s dominance with Graphics Processing Units (GPUs) for AI and machine learning applications. Meanwhile, TSMC Arizona is scheduled to start producing 4nm chips in 2025, demonstrating the rate and scale of investment taking place. The microelectronics industry requires the production, handling, and quality monitoring of huge quantities of ultrapure water. Semiconductor fabs also produce various wastewater that must be treated in different ways before discharge.

These advanced industries are demanding but offer high growth opportunities. They are used to building in redundancy to ensure continuous operation, but they are also willing to embrace cutting-edge technology. Companies that can combine high-performance fluid handling with smart monitoring and water treatment to track performance, enable process optimisation, and circularise water use to hit sustainability goals are set to win in this space.

2. PFAS still isn’t going away

PFAS (forever chemicals) continue as a significant concern due to their persistence in the environment and potential health impacts. Regulatory developments present two fundamental challenges: cost-effective measurement and removal of PFAS, and replacing PFAS sources in materials and equipment.

Currently, measuring PFAS levels requires expensive lab-based liquid chromatography-mass spectrometry (LC-MS) analysis of samples. While emerging electrochemical and enzymatic solutions don’t yet meet required detection limits, companies are racing to invest in promising new approaches with the potential to operate in-line. Auditing PFAS sources in supply chains and migrating to PFAS-free or lower-PFAS alternatives is a priority for many industries too. As scrutiny increases, slow movers could find themselves in a difficult situation if their products are identified as a source of PFAS in wastewater.

We are seeing a two-tier response to PFAS concerns. Some companies consider the problem industry-wide, assuming ‘someone else’ will fix it or that proposed regulations will be watered down. Others see the challenge as an opportunity to gain market advantage. Making progress in this space will require deep pockets, but those who get it right will be poised to dominate a new multi-billion-dollar industry.

3. Agri automation is gaining traction

A lack of skilled and frontline workers is accelerating the push for automation in many markets. Agri-tech is a key frontier, where efficient transportation and delivery of water, insecticides, and other fluids is essential. From precision agriculture to bioengineering of drought-resistant crops, the next generation of agricultural infrastructure will require a high level of support from the fluid handling industry.

Autonomous fluid delivery systems for applications, like smart irrigation and precision delivery of pesticides, take measurements at the edge and use them to inform decision-making. Edge sensors need to be weather-resistant and power-efficient, with stable communication, while integrated fluid delivery systems must be precise and leak-resistant.

Agricultural run-off regulations are also tightening, with manual lab-based testing proving costly but necessary to prove adherence to environmental standards. Continuous field monitoring of run-off enables targeted deployment of water treatment approaches to meet legislative requirements, whilst minimising waste.

Water and fluid handling companies offering comprehensive integrated solutions for smart fluid delivery, edge sensing, and run-off treatment have much to gain in this evolving sector. There are green shoots in the Agri-tech market after a difficult 2024, and investment in automation is likely to be prioritised.  

Embrace change to win in 2025

In a difficult geopolitical and regulatory setting, with uncertainty in traditional markets, 2025’s winners will be those who achieve growth in new markets for water and fluid handling. These new markets are technologically advanced, demanding, and fast-moving, and success will be reliant on innovative, integrated solutions.

Here at Sagentia Innovation, we combine deep technical understanding of new and emerging technologies with the breadth of market knowledge to help companies succeed against difficult backdrops. Our advisory and product development experience encompasses the lab, the factory, and the end customer.

Find out more about our science-led approach to strategy, innovation, and product development for the water and fluid handling industries. /markets/industrial/chemicals-energy/