Asia-Pacific (APAC) has emerged as a highly dynamic market for data centers, fueled by increased investments from colocation providers and hyperscale operators. The region’s data center industry has been primarily driven by the rapid growth in the number of internet users, widespread adoption of cloud services, elevated smartphone penetration, and the need for enterprises to move away from server room setups.
APAC is among the main markets included in the Global Data Center Construction Market Size which is projected to hit US$73.43 billion by 2028. The global data center construction market, according to Arizton, was valued at US$50.34 billion in 2022 and is currently growing at a CAGR of 6.50%. The market segment covered include facility, infrastructure, electrical infrastructure, mechanical infrastructure, cooling systems, cooling technique, general construction, tier standards, and geography.
The global data center construction market in 2022 was driven mainly by investments from colocation operators that include Equinix, Digital Realty, Vantage Data Centers, STACK Infrastructure, Iron Mountain, QTS Realty Trust, NTT Global Data Centers, DataBank, and ST Telemedia Global Data Centres. The hyperscalers that helped boost investments were Meta (Facebook), Microsoft, Amazon Web Services (AWS), and Google.
China is considered the most mature market in APAC, with its digital transformation and business connectivity driving industry growth. Experts anticipate that China will continue to lead the region in investments and power capacity expansion in the foreseeable future.
Indonesia has been identified as the prominently growing locations in the Southeast Asia region. Indonesia’s government is spearheading digital transformation in the country, focusing on sectors such as government digitization, digital health, digital education, and industrial digitization. Tax incentives are being offered to boost the digital economy and encourage data localisation in the country.
In a separate report last month, Malaysia came out on top as the most desired destination for data center investment. The South East Asian nation topped the list with 113MW of take up in 2022 as compared to Indonesia (22MW) ranked second followed by Vietnam (2MW), Philippines (2MW) and Thailand (25MW).
As the demand for global internet connectivity in Southeast Asia grows, investments in subsea cables are also increasing. FPT Telecom, one of the telecommunication and internet providers in Vietnam, recently invested $87 million to develop a new undersea fiber optic cable connecting Vietnam to international destinations called Asia Link Cable (ALC).
PLDT Inc. has also recently announced its plan to collaborate with potential consortium partners to launch another subsea cable project in Philippines.