Amazon Web Services is reportedly preparing to build a super-sized data center in Korea’s western port city of Incheon to respond to rising domestic cloud and artificial intelligence demand.
Reports cited cloud industry officials that AWS has currently signed a contract with an architect firm and entered the final stage of designing the 96-megawatt data center. It’s expected the cloud giant to start selection for a contractor to begin construction next year and completion by 2026.
Since entering the Korean market in 2012, AWS has secured a number of Korean conglomerates and large startups as clients, and it thinks the Korean market has some room for growth in the areas of finance and public sectors. In particular, it’s betting big on the higher demand for generative AI-related services and AI-based infrastructure and goes in line with its US$ 100 million investment to establish a program to connect customers in utilizing AI and machine learning.
According to Research and Markets, the Korean data center market is expected to grow at a CAGR of 9.89% from 2022 to 2028 at US$ 6.74 billion by 2028. But the increase in rent for floor space and lack of skilled personnel to effectively deploy and manage operations are cited as the main challenges that could potentially impede the implementation of innovative solutions in the Korean market.
The Korean government’s moves toward the decentralization of data centers could also make it harder for operators to build new facilities in the capital areas of Seoul, Incheon, and Gyeonggi-do province, unlike non-capital areas where incentives are provided.
Earlier this year, the Korean government made it mandatory for large platforms and data center operators to come up with strengthened prevention and backup measures in case of fires and disasters. This comes as the government considers penalization against senior Kakao Pay officials for failing to provide adequate measures following the Pangyo data center fire last October that resulted in a massive disruption of services for several hours.
