Singapore and Vietnam Eye New Undersea Cables

Singaporean asset manager Keppel and Vietnamese conglomerate Sovico Group are exploring plans to construct new undersea fiber-optic cables, a move aimed at bolstering the region’s data center industry.

Southeast Asia, a crucial link for cables connecting Asia and Europe, is witnessing a surge in demand for AI services and data centers. Vietnam, in particular, has ambitious plans to establish 10 new submarine cables by 2030.

The development of undersea cables has become a focal point in the ongoing Sino-American technological rivalry, with both nations vying for contracts to build and maintain this critical infrastructure.

According to the  people familiar with the discussions, one of the proposed projects involves a direct cable link between Vietnam and Singapore, estimated to cost around US$150 million. While Sovico favors this direct connection, Keppel is reportedly leaning towards a more ambitious plan involving a consortium of investors. This alternative plan would see a longer cable running from Singapore to Japan, with Vietnam as a potential offshoot.

US officials have been actively engaging with Vietnamese and Singaporean authorities to discourage the use of Chinese contractors, such as HMN Technologies, for these cable projects. This reflects broader geopolitical tensions and concerns about potential security risks associated with Chinese involvement in critical infrastructure.

Vietnam, with its rapidly growing digital economy and a population of nearly 100 million, is poised to become a significant player in the regional data center landscape.

However, the country currently relies on a limited number of undersea cable connections. Thus, Vietnam aims to enhance its connectivity and position itself as a more attractive destination for data centers  by expanding its cable infrastructure.

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Hazel Moises
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