Data Centre China (private data centre operators) have been showing greater interest in growth opportunities abroad, in Southeast Asia.
According to market forecasts by Chinese government research body CAICT, China’s data centre market was valued at 150 billion yuan (22.4 billion USD) in 2021, and CAICT predicts that the market will grow to 190 billion yuan (28.3 billion USD) in 2022.
Notably, China’s market is dominated by the three state-run companies, which accounted for over half of the data centre market in 2020. Although private data centre operators account for the remaining market share, individual firms only possess a very small market share: even the largest private data centre operator, GDS Holdings, only has 5% of the Chinese market share.
Growth Opportunities Across Southeast Asia
Facing considerable competition from the three largest Chinese state-run telecommunications companies (China Telecom, China Unicom, and China Mobile), private operators such as GDS Holdings have sought to expand their offshore operations, instead of trying to carve out a larger slice of the data centre market in China.
Private data centre operators, including GDS Holdings, have singled out Southeast Asia as a crucial region for their growth and global expansion plans.
While GDS Holdings’ main data centre facilities are in China, the company has been steadily ramping up its investments overseas. In November 2021, GDS Holdings acquired 10 000 square metres of land in Batam to construct two data centre buildings with a combined capacity of 28 MW.
In April 2022, GDS Holdings entered into a partnership with Malaysian power producer YTL Power International Berhad to co-develop 168 MW of data centre capacity for eight facilities in Johor Bahru.
In GDS Holdings’ Q1 earnings call, CEO William Huang affirmed that the company saw “huge potential in the region” because of Southeast Asia’s 600 million population, and the large number of unicorn companies. GDS Holdings has also set aside one quarter of its capital expenditure budget for data centre projects in the Southeast Asian region, and anticipates high returns from these investments.
Capitalising on Singapore as Regional Data Centre Hub
In an interview with South China Morning Post, Huang said that “Singapore has been a (major) hub due to its unique location, and that naturally determines the city’s important role in the future data centre industry. It will be the base to expand our services and cover the South-East Asian region.”
He affirmed that “now is the right time to map out a plan in Southeast Asia,” to meet booming demand for data storage and digital services.
Analysts from Google, Temasek Holdings, and Bain & Company have projected that Southeast Asia’s Internet economy will be valued at 1 trillion USD by 2030. With the government’s lifting of the data centre moratorium, the data centre industry in Singapore will likely have strong prospects for growth.
“Outstanding Data Centre Projects” is an awards category for this year’s W.Media Asia Pacific Cloud & Datacenter Awards programme, where enterprise users and industry experts will come together to share their insights and opinions on innovative data centre projects. If you are interested in nominating or sponsoring, visit our Awards page for more information. Nominations are open until 31st July 2022.
