A significant deal worth more than US$1 billion to build hyperscale data centers in Japan has been signed between Equinix and Singapore’s sovereign wealth fund GIC.
The joint venture will develop three xScale data centers, one in Osaka and two in Tokyo.
Equinix’s new developments will be designed to meet the unique workloads of the world’s leading cloud service providers like Alibaba Cloud, AWS, Google Cloud and Microsoft Azure.
The President and CEO of Equinix, Charles Meyers, said: “The new facilities will allow our hyperscale customers to streamline their continued growth, while strengthening Equinix’s leadership position in the cloud ecosystem.”
Japan thriving digital economy creates lucrative opportunities
Japan has a rapidly growing digital economy with businesses in every industry pushing for digital transformation using cloud technology.
The country’s public cloud market was valued at US$8 billion last year and is predicted to reach US$20 billion in 2024 with an annual growth rate of 19%. Japan’s domestic data center market is also expected to reach US$17.1 billion and grow at an annual rate of 8.6% up to 2022.
Jabez Tan, Head of Research at Structure Research, said: “Japan is a strategic country for regional hyperscale expansion, and the demand for data center capacity in the Tokyo and Osaka markets has outstripped supply.”
Cloud and IT services in Asia Pacific are expected to grow at a faster pace than all other global regions at an annual rate of 50%. Interconnection bandwidth is also forecast to reach 3,825 Terabytes per second by 2022, 28% larger than Europe.
These advancements are increasing the demand for global connectivity, hybrid multicloud solutions and localised digital services at the edge.
The new xScale data centers will provide access to Equinix’s interconnection and edge services, which will increase the speed of connectivity. The data centers enable hyperscale companies to add deployments to their existing footprints across 55 global metros.
Once fully built-out, the three facilities will provide around 138 megawatts of power.
Equinix, Japan’s top data center provider, along with the Singaporean long-term investor agreed to the limited liability partnership on 21 April 2020. Equinix and GIC previously secured another US$1+ billion joint venture to develop four xScale data centers in Europe.
GIC will own 80% equity in the agreement, while Equinix will own the remaining 20% of the venture that is expected to close in the second half of 2020.
W.Media will be watching the developments closely to provide updates as we receive them.