How Edge Computing will exponentially grow the China market

Over the past decades, there have been paradigm shifts from centralised to decentralised IT environments: from mainframe server to on-premise server and from mobile to cloud environments. In many ways, it seems like an electronic dance music loop.

Nowadays, the industry is continuing to see growth of Cloud computing, which experts believe will continue to lead the ICT infrastructure market. In that space, Edge Computing will become an exponentially growing market in itself, with the increasing penetration of network-related technologies and initiatives, such as 5G and IoT.

According to Reply’s new research ‘From Cloud to Edge’, edge computing will be an exponentially growing market in all “Europe-5” (Italy, Germany, France, Netherlands, Belgium), and “Big-5” (USA, United Kingdom, Brazil, China, India) clusters’ countries due to the growing usage of 5G and IoT solutions. It is expected that Edge computing marketing would reach a value of $8294.5 million by 2025, according to Reportlinker.com.

All the industries that require the computing tasks as close to where data is originated as possible will benefit from Edge Computing. It’s time for global enterprises to design and implement architectures that leverage the best of Edge and Cloud Computing, “while ensuring privacy and cybersecurity” commented Filippo Rizzante, CTO reply.

China: 100+ Edge Projects Deployed in China Leveraging 5G and IoT Infrastructure

According to a new GSMA intelligence report ‘Edge Computing in the 5G Era: Technology and Market Developments in China’, noted that China’s leadership in edge computing is being driven by government support for new technologies and operator investments in new 5G and IoT networks. According to the ECC, there are currently more than 100 edge computing projects up and running in 40 cities in China across various sectors.

However, even as “China’s 5G numbers might look overwhelming, the quantity is well ahead of the quality.” Explained Robert Clark, a news analyst. “The real challenge in China will be in the industrial Internet.”

Though it’s still early, as networks become virtual or software-based, 5G will be the impulse for the next wave of multibillion-dollar infrastructure spending to spur innovation across many industries along with edge computing.

Take Chinese Grids’ Transformation as an example, China’s State Grid Corp (SGCC), government-backed biggest electricity distributor, has adopted a new focus for its smart grid development to build an electricity network plus IoT (E-IoT, essentially, is to deploy blockchain, AI, cloud computing, 5G, edge computing, and other digital/tech solutions upon the physical grid operation) by 2026.

Start from 2019, SGCC has already took steps to run its digital transformation. In 2020, Kou Wei, the current chairman of SGCC set off a landmark “white paper” for the e-IoT development, which set a grand vision to “establish an initial construction of the E-IoT network by 2021 and complete the E-IoT network development by 2026.” At the same year, working with Huawei and China Telecom, a largest-scale 5G-based smart power grid project in Qingdao of Shandong province was completed. Innovations in 5G telecommunication technology applications are applied e.g. DP facility suitable for 5G distribution power lines is equipped which can automatically eliminate faults of the lines within dozens of milliseconds (the one-way latency of the DP device is lowered to 8 milliseconds and the protection can last for 50 milliseconds).

SGCC has already taken further initiatives to build edge infrastructure nationwide in the next few years to advance its E-IoT network, a source who did not wish to be named told W.media.

“Creating a favourable ecosystem environment that supports technology developments and fosters innovation will ultimately determine the pace and magnitude of edge deployments in China and beyond.” explained Sihan Bo Chen, Head of Greater China, GSMA.

In the next few years, we will see more breakthroughs brought about by edge computing in BFSI, medicine, transport, industry, agriculture and the home. Edge computing gains an ‘edge’ in performance with data processing in an intelligent way as near as possible to its source that will bring practical benefits to help with the digitization of various industries.

The year of the Ox has dawned in China, named after a zodiac animal noted for its slow-but-steady approach. The description of China’s emerging 5G private network market could not be more accurate.

Chindata establishes two new subsidiaries in two days

Chindata Group, a leading carrier-neutral hyperscale data center solution provider in Asia-Pacific emerging markets established two new subsidiaries within two days: Chindustry, to create more value for digital leaders; Chinpower, to contribute to a greener hyperscale data center industry.

Chindustry’s predecessor is the Group’s Project Delivery BU, which has the successful development and construction experience in planning, designing and building the next-generation hyperscale computing infrastructure.

The Group expects it to provide customized, cost-effective and full-stack solutions for its customers, adapting to global tech giants’ diverse needs.

Chinpower aims to develop a brand-new energy solution for the hyperscale data center industry, the Group released.

These new subsidiaries come after the Group raised $540 million in a U.S. initial public offering priced at the top of a marketed range and climbed 20% in its trading debut in October last year, Chindata Group after raising, according to statistics by Bloomberg.

Globally, investors are eyeing cloud computing service providers, necessary for employees working from home, Bloomberg reported.

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China Mobile International opens data center in Frankfurt

China Mobile International (CMI) has opened a new data center facility in Frankfurt, Germany.

CMI’s second data center in Europe, the new Tier-III facility will connect with CMI’s data centers in the UK and Singapore, and its Global Network Center in Hong Kong.

CMI is a subsidiary of Chinese state-owned telecommunications provider China Mobile.

Dr. Li Feng, Chairman and CEO of CMI, said that the company’s decision to place its data center in Frankfurt, the financial hub of the European Union (EU), is informed by their goal to provide secure and reliable high-speed connectivity between Europe and Asia.

“Technology is now an intrinsic part of almost all aspects of our lives, so more data needs to be processed and stored. This in turn means greater demand for cloud and content delivery solutions,” he continued.

“CMI provides professional one-stop-shop services to help carrier and enterprise customers respond to and meet the needs of their users in a new era of digital globalisation,” Dr. Li added.

This new data center has more than 80 Cloud Connect points of presence (POPs), a nine-layer security control system, and supported by a dual power supply from two different power substations. Its cooling system runs on a chilled water storage facility, the company said.

Founded in 2008, China Mobile International currently has a presence in over 37 countries, and is involved in developing and offering next generation technologies including cloud, IT, and Internet of Things (IoT) technology.

How Data Centers in China Are Heading Towards Carbon Neutrality

After Chinese President Xi Jinping pledged that by 2030 China would cut emissions per unit of GDP by “at least” 65 percent compared with 2005 levels at the virtual Climate Ambition Summit, China has sped up its decarbonization and development of a low carbon economy.

The announcement was met with a mixed response with some environmental observers questioning whether China can go this far.

“The most challenging part of the shift is not the investment or magnitude of renewable capacity additions but the social transition that comes with it,” said Wood Mackenzie analyst Prakash Sharma.

In China, representing the information backbone of an increasingly digitalized society, data centers are still a net producer of Greenhouse Gas (GHG) emissions and major electrical power users. Research from Greenpeace and North China Electric Power University estimated that China’s data center consumed 161 billion kilowatt hours of electricity in 2018, equivalent to 2 percent of the country’s total usage. The power consumption is projected to grow 66 percent by 2023, to 267 billion kilowatt hours, which means 163 million tonnes of carbon emissions are produced assuming China’s energy mix remains the same.

Tier-I cities in China such as Beijing, Shanghai and Shenzhen have applied strict PUE rules as a method to push the industry towards greener operations. While Beijing has implemented a complete citywide ban on new data center construction, Shanghai only allows new data center with a PUE of 1.3 or below and refitted ones with a PUE of 1.4 or below. Meanwhile in Shenzhen, data centers with a PUE of over 1.4 receive no subsidies and those with less than 1.25 could obtain a subsidy of over 40 percent. Besides, central government policy on more use of renewable energy remains one of guidance and encouragement. China manufactures around 70 percent of solar energy equipment such as PV panels and modules.

Renewed Renewable Energy push

Different from traditional infrastructure like roads and railways, construction of “new infrastructure” in China is boosted to remain the primary driver of energy consumption in the foreseeable future. With data centers rapidly expanding and depleting environmental resources, the energy and climate impacts are being one of top considerations in China, as well as the world in general.

Intensive energy use can be costly both in terms of the data center’s operating budget (often representing more than 50 percent of the budget) and the impact on the environment.

Interest in renewable energy in China has been growing for several years, and leading Chinese companies have already undertaken the exploration of renewable energy use.

Research from Greenpeace and North China Electric Power University also states that China is outpacing the US in renewable energy, and has made huge progress in developing solar and wind projects.

However, nearly three quarters of (data centers’) power comes from coal, said Ye Ruiqi, a climate expert from Greenpeace. “To prevent this, China’s data centers need to decouple their electricity consumption from their carbon footprint by relying more on wind and solar energy. They can build their own renewable energy capacity, buy clean energy on the market or purchase green certificates to offset their emissions,” she added.

A Turning Point

In the backdrop of all this, China’s proposal to achieve net zero emissions by 2060 aims can be seen as a turning point. To fulfill the goal of carbon reduction and pollution prevention, China’s tech giants, state-owned energy companies and other important players are encouraged to make great efforts, from advancing technologies that produce less greenhouse gases or air pollution, accelerating energy transition and taking more social responsibilities.

In December 2020, China Three Gorges Corporation, a Chinese state-owned power company operating the China Yangtze Three Gorges Project (one of the biggest hydropower-complex projects in the world), announced plans to construct its Dongyue Temple Data Center. It is planned to build about 28,000 cabinets and invest 5.5 billion CNY (around $855.8 million). In Stage I, about 4,400 cabinets will be put into use by October, 2021, with an investment of 830 million CNY (around $ 129 million).

Responding to Chinese government’s pledge of “carbon neutrality” and the scheme of “New Infrastructure”, the group will further utilize the advantages of clean energy, stock land and real estate to promote the big data industry. Although it has been involved in the big data industry since 2017, it is the first time that the group announces its ambition to expand business with such massive spending on the ICT market.

Chinese private enterprises seem to have got off the block. On January 12, Chinese internet giant Tencent released its plan of achieving zero carbon emissions with the help of technology. With this announcement, Tencent became one of the first Internet companies to take action in achieving carbon neutrality.

“As China announces its carbon peak and carbon neutrality targets, Tencent will also accelerate its carbon neutrality plan. At the same time, we will also increase the exploration of the potential of cutting-edge technologies represented by artificial intelligence in coping with the major challenges of the earth, and make great strides to promote the application of technology in industrial energy conservation and emission reduction,” said Tencent’s founder Ma Huateng (also known as Pony Ma).

Chindata Group, a leading carrier-neutral hyperscale data center solution provider in China, also releases its roadmap to be carbon neutral for all its next-generation hyperscale data centers in China with its 100% renewable energy solution by 2030.

As China becomes a more developed economy, accelerated efforts of decarbonization to accelerate technology innovation and industrial upgrading are made. China’s transition to a low carbon economy is not only possible but can be a driver of high-quality growth while bolstering the development of digital transformation.

How Far Behind

Since 2018, institutions globally are moving towards achieving carbon neutrality, even as concerns have been raised at the way in which this is computed.

Although more Governments and businesses are committing to achieve carbon neutrality by 2050, the world is still falling far short of that goal, UN Secretary-General António Guterres said in November in his latest push for a cleaner, greener future. Guterres reported that so far, the European Union, Japan and the Republic of Korea, along with more than 110 other countries, have made the pledge, while China is set to join them by 2060. “The window of opportunity is closing,” he warned.

In January, following the inauguration, President Biden signed an executive order at the White House, to reverse the previous administration’s withdrawal from the 2015 accord, which returned the United States to the worldwide fight to slow global warming and reduce greenhouse gas emissions. Alongside China, the United States is the world’s most carbon emitter.

Financial institutions have been accused of funding “dirty capital” into traditional power projects. All this is changing.

Goldman Sachs has ruled out direct finance for new or expanding thermal coal mines and coal-fired power plant projects worldwide, as well as direct finance for new Arctic oil exploration and production.

The policy makes a clear mention of protecting the Arctic National Wildlife Refuge,

Goldman Sachs said in a statement. Further, the bank has also committed to a phase out of financing for significant thermal coal mining companies that do not have a diversification strategy. Goldman Sachs’s new policy tightens the screw on thermal coal by including underwriting, and explicitly committing to phase-out, not just reduction.

This is a crucial step forward, as other US bank coal finance restrictions have geographic loopholes, industry watchers said.

While other major banks have committed to reducing credit exposure to coal mining, their approach restricts only lending, ignoring the large amounts of capital the banks facilitate for the coal industry from the underwriting of issuances of stocks and bonds. Activists have been vehement in their criticism of global financial institutions, which they say are turning a blind eye and undermining the Paris Agreement when it comes to phasing out coal-based energy production. Other financial institutions have followed suit too.

Jason Opeña Disterhoft, Climate and Energy Senior Campaigner at Rainforest Action Network (RAN), said that Goldman Sachs’s updated policy shows that U.S. banks can draw red lines on oil and gas, and now other major U.S. banks, especially JPMorgan Chase – the world’s worst banker of fossil fuels by a wide margin – must improve on what Goldman has done.

“The writing was already on the wall for coal financing. Goldman Sachs’s new policy puts that writing in flashing neon,” he added.

According to research by non-profit organisations like Urgewald, BankTrack and 30 others, banks and other financial institutions from January 2017 to September 2019, they have provided lending finance and underwriting services to 258 coal plant developers in the world. According to Heffa Schuecking, director of Urgewald, this has amounted to channeling $745 billion.

Countries like India have also committed to reduce energy emissions intensity by 30 – 35 percent from 2005 levels by 2030 and increase the share of non-fossil fuel energy to 40 percent of India’s energy mix by 2030.

Internationally, there is broad recognition of the need to reduce power use and emissions. This motivates greater efforts in developing future policies, and changes in regulation, taxation and electricity market. In the changing global landscape, data center, an increasingly critical part of the infrastructure for the digitalised society, have outsized importance in climate change mitigation efforts. This is the time when this industry needs to take responsibility and look at sustainability beyond lip service.

For more insights on China, do check out our digital event China Datacenter Market Insights happening on March 5!

Exclusive Insight into Hong Kong’s Datacenter Market: 2021 and Beyond

Hong Kong’s well-established financial and logistics industries are critical components that support the surrounding economy on both a city-wide and regional scale. Its excellent ICT networks position Hong Kong at a crucial juncture between Asia Pacific and the rest of the world, and it is a proven early adopter of technologies like 5G and GBPS Broadband. 

But underpinning these fast-moving businesses and systems are Hong Kong’s datacenters, a robust backbone to Hong Kong’s expansive digital infrastructure.  The digital transformation opportunities enabled by these datacenters is forecasted to add US$9 billion to Hong Kong’s GDP in the next three years–a year on year increase of 0.5 percent.

It’s important to look at the future of the Hong Kong market with a special focus on the heart of its data ecosystem: the data centers themselves. Our upcoming webinar “Hong Kong Datacenters: Market Insights 2021” will provide an unrivalled look into this dynamic market. 

Alex Perkins, Chief Development Officer for Status Data Centers and one of the featured panelists for the show, states:

“Hong Kong is one of the key established data centre markets in Asia Pacific, thriving on the excellent telecommunications networks linking Asia Pacific with the globe.  Being at the forefront of mobile networks connectivity with 5G mobile networks and Gbps broadband as a standard, HK has always been an early adopter of new technologies.”

Upon further reflection of this market,  Perkins went on to highlight the COVID-19 pandemic as a key accelerating factor. Hong Kong companies increased their rate of adoption of cloud computing platforms by 40 percent. In this same time frame, the Media and Entertainment data share has skyrocketed, with social media usage and gaming each up by around 35 percent and video streaming up by 50 percent.

This data boom is most acutely felt in the retail sphere, with e-commerce replacing brick-and-mortar spaces, and Hong Kongers quickly catching up to their mainland counterparts in China when it comes to digital wallet adoption.

 

How does this impact the Datacenter market?

These compounding factors have dramatically driven up demand for datacenters all over the world. In Hong Kong in particular, internet usage has increased 60 percent in the past twelve months. As Perkins explains:

“This has led to limited available capacity in the existing market, especially for larger demand of 2-5MW where options are limited, although major new projects coming to the market from 2021 should alleviate some of those issues.”

Regarding the scope and scale of these “major new projects”, Perkins admits that “Whether this satiates the need for the hyperscale players remains to be seen”, although he notes that “larger sites in TKO and Shatin may do that, however the price point will be key to attracting the big players for the longer term.”

Ultimately, Perkins notes, “The market is looking up.”

 

Learn More

W.Media’s “Hong Kong Datacenters: Market Insights 2021” series will focus on HK’s datacenter market: its business prospects, technological breakthroughs, and future trends. Registration is free. Our speakers will be discussing the commercial real estate outlook, cloud adoption in SME’s, and strengthening the market’s resilience.

Join us on Wednesday, 3rd February from 10.00am – 11.30 am for 90 minutes of invigorating conversation with Alex Perkins as well as other esteemed experts.

Huawei expands cloud presence in Latin America with new data center

Huawei has activated a second data center in Brazil, the AZ2, mainly as a backup center for cloud services offered from its other facility in the country.

Besides providing greater capacity, the redundancy facility is expected to attract customers concerned with the migration of critical workloads to the cloud, the company said in a statement.

“There is still a concern in the market that the service might occasionally falter, and this prevents companies from migrating their critical applications to the cloud. AZ2 brings more stability and increases the network’s delivery capacity in Brazil,” José Nilo (pictured), VP of cloud at Huawei Brasil, said in the release.

This is not Huawei’s first cloud presence in Latin America. Its cloud business arrived in Latin America in August 2019 with the activation of a datacenter in Chile, followed by data centers in Brazil, Mexico, Argentina and Peru.

In addition to the new facility Brazil, a second data center in Chile is expected to come online in coming weeks.

In a roadmap presentation last year, Duan Bin, director of Huawei Cloud LATAM, said the company has plans to reach all of Latin America, including Bolivia, Paraguay, Uruguay, Central America, and the Caribbean in 2021 and beyond.

The expansion in the region and concentration on cloud services can be seen as the company’s strategic move following international sanctions and resistance to its other businesses, TechWire Asia reported.

The manufacturer has faced hostility and suspicion from governments in the West following the Sino-US trade war, allegations of espionage, and alleged violation of trade sanctions. As a result, Australia and Czech Republic are just some of the countries that have banned the use of Huawei’s networks.

However, Latin America has been relatively friendly to Huawei’s technology. Besides the opening of several new data centers, it was reported this month that Brazil’s government will not seek to bar Huawei from upcoming 5G network auctions later this year. In addition, the company has secured major telecommunications contracts for the development of a 5G network, Latin America Tech reported.

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The past year has seen incredible leaps forward in our embrace of digital solutions, and we think it’s time to come together and talk about it. We’re bringing together thousands of IT leaders from across Southeast Asia, covering everything from datacenter deployment to digital banking. Digital Week lets you expand your network and engage with new markets from wherever you are.

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Why the Transformation of State-owned Chinese Companies Will Take Time

China’s ‘new infrastructure’ plan has become a buzzword for attracting more players and investments. Even as plans are afoot to attract new companies, traditional state-owned companies, more popularly known as Public Sector Enterprises (PSEs), are also keen to expand their role, so that they can catch up with the wave.

Since China’s reform and opening-up of the economy, CCP (Chinese Communist Party) has been striving to gradually allow the markets to play a decisive role in resource allocation, the situation in China’s state-owned companies is much more complex. Some big state-owned enterprises are entering the ICT market or considering to enter the market but things are not going well. Case in point – the acquisition of Global Switch by a Chinese consortium led by Chinese steel maker, Jiangsu Sha Steel Group.

Traditional Industry Faces Challenges

In the 2019 annual competitiveness ranking by World Steel Dynamics, five Chinese steel companies were among the top 50 companies.

The top Chinese steel maker is China Baowu’s Baoshan Iron and Steel Co Ltd (Bao Steel) which was ranked at No 15. It was followed by China Steel in Taiwan at 22, Anshan Iron and Steel Group Co Ltd (An Steel) at 24, Maanshan Iron and Steel Co Ltd (Ma’gang/ Ma Steel) at 31, and Jiangsu Shagang Co Ltd (Sha’gang/ Sha Steel) at 34.

As a key fundamental industry of the national economy, the steel industry, like other traditional industries, is facing challenges such as overcapacity, cost reduction, efficiency increase, energy conservation and emission reduction. Digitalization is the only way for the transformation and upgrade of the steel industry.

Bao Steel, the leader, is the first to have led the consolidation in the Chinese steel sector in the last decade, and has consistently expanded output through several mergers and acquisitions. In August 2000, Baosteel established a subsidiary called Bsteel which is fully owned by Baosteel to delegate its own e-business implementation and maintenance to a separate business unit. At the end of 2006, Bsteel transferred its ICT coding and development business to a similar company fully owned by Baosteel: Baosight (/Bao’Xin Soft). Baosight focuses on Baosteel’s internal ICT platform, ERP, production specific applications, ICT infrastructure operations and user support activities.

Now, Baosight has a bunch of data center facilities. Backed by the Baosteel group, Baosight enjoys significantly resources and cost discount, benefitting by the parent company’s extensive networks and partnerships. From October 2013, Baosight has completed the construction of Baozhiyun Phase I/II/III IDC project through a series of equity financing and self-financing in Baoshan District, Shanghai. The largest data center industrial base in Shanghai focuses mainly in wholesale business and then service outsourcing business (including maintenance and repair of information system, rail transit vehicle system control components, cloud computing operation service, IDC operation service) with an industrial scale of nearly 20,000 cabinets in 2018. The operating income has reached 1.29 billion Yuan at that time. In 2019, the fourth phase of Baozhiyun plans to add 9,000 cabinets so that the four phases of Baozhiyun reached total 27,500 cabinets. Besides, in 2019, the Wuhan Iron and Steel Big Data Industrial Park is set to be built with 18,000 cabinets in the following two years (Phase I: 2216 cabinets in 2019).

State-owned companies in steel industry has boosted a lot of initiatives to heighten its corporate competitiveness in the age of ‘big data’, steer its business direction to meet the market demands for information, and optimize the synergy between the traditional industry of steel manufacturing and the new industry of information technology. Despite the success of the transformation of Bao Steel, the other four Chinese steel giants are not going well when exploring new business.

Being a well-established enterprise in the steel manufacturing industry, Shagang (Sha Steel) has also committed to a business diversification to data and information technology since 2017. It became the controlling shareholder of Global Switch in 2019. Recently, the owners of Global Switch are exploring a sale that could value the London-based data center operator at 8 billion pounds ($10.9 billion) or more.

Challenges and Dilemma

From the time Deng Xiaoping unleashed market reforms in an effort to increase investments in China, the onus was always on the government to whole heartedly lead the investment symphony. The scenario continues till this date. Recently, China has begun rolling out its ‘new infrastructure’ campaign all around the nation, which provides an opportunity for all market players. Compared with the traditional infrastructure, the main force for the investment of the ‘new infrastructure’ are market players instead of the government. Favorable policies have been issued not only for domestic investors but also for foreign ones.

Now, China is working on expanding and opening up policies to foreign investment, even more.

Under the ‘New Infrastructure’ push, it seems that the strengths of state-owned companies are weakened (although still have great advantages especially in resources) and they are brought to the same starting point in the race with other players. The difference is that they have their own responsibilities and path to step forward.

‘New infrastructure’ is not a strong stimulus, but a new economic growth engine for China in the future, which also serves as the most active and productive driver that is full of opportunities for productivity factor optimization and potential improvement. As the new infrastructure is closely connected with the development of new technology, all state-owned enterprises need to achieve their industrial upgrading before they explore new fields.

Besides, in terms of investment, it involves new form to attract public investments. In the process of promoting the ‘new infrastructure construction’, more attention will be paid to explore the innovation of investment and financing mechanism, so as to further stimulate the enthusiasm of private investment, foreseeably through Real Estate Investment Trusts or REITs.

Over years of development, the marginal utility and earnings of the traditional infrastructure decreases progressively. The ‘new infrastructure’, backed by technological innovation, will create jobs and increase earnings in a short period, and facilitate structural transformation and upgrading, thereby bringing along a sound economic development in the mid-and-long term.

Although the role of State-owned companies has been proved to be important in this economy as they have traditionally assisted the government in reforms, they face the challenges they never met before. Not to mention the state is encouraged to divest from other industries by decreasing its ownership.

With the geopolitical situation entering another new normal with the election of Joe Biden and the US President and a pandemic that still continues to hover, investment flows in the future will strongly depend on how age-old enterprises adapt in the post-COVID world. The sooner State enterprises realise this fact, the better.

For more insights on China, do check out our digital event China Datacenter Market Insights happening on March 5!

ByteDance’s launch of new mobile payments on Chinese version of TikTok

ByteDance has launched its own payments service for Douyin, the Chinese version of its video app TikTok.

Currently, Douyin’s 600 million daily active users can buy virtual gifts for streamers or from stores on the site through Alipay and WeChat Pay.

However, now ByteDance is also offering a Douyin Pay option, taking advantage of the third-party payment license it acquired when it bought Wuhan Hezhong Yibao Technology last year.

Unlike TikTok, Douyin users can already sell merchandise since 2017 and it is now used by millions of people to shop everyday, according to Reuters.

The new launch will be a further step of ByteDance’s venture into the FinTech and e-commerce industry. 

This move is set to challenge the duopoly of WeChat Pay and AliPay, each has a 55.4% share and 38.5% share, respectively, in China’s mobile third-party payment market at the end of June last year, according to research firm Analysys.

Other Chinese hi-tech giants, including Meituan and Pinduoduo, are also expected to compete in mobile payments, as per reported by South China Morning Post. 

 

How China’s Data Center Industry is Likely to Shape Up in 2021

The year 2021 could be termed as a “Year of Renewal”. The world is still in chaos with continuing uncertainties, while at the same time rapidly accelerating and transforming.

As a distinct growth pole of global economy, China’s rapid recovery from the Covid-19 has been commendable. Since the last two decades, it has benefited from fast economic growth, and the country has stood out in the developing world for its unique strengths in its market size, diversity and vitality.

Moreover, with the renewed emphasis on infrastructure in its Five-Year Plan and long-term strategy as well as the new policies boosted to empower the digital economy, new infrastructure development and significant increase in demand for data center is being seen on the ground. Case in point- the undersea data center in Zhuhai.

New Infrastructure Push

Fueled by a surge in demand for local demand for digitalization of business and consumer environment, the construction of new infrastructure including 5G and data centers has developed into a strategy, which enables it to meet the twin urgent goals of increasing employment and preparing for new changes in the global economy.

At the 2020 National People’s Congress, the CCP first emphasizes a digital infrastructure public spending programme. Now, building ‘new infrastructure’ has already become a top development priority for China. Since the Covid-19 outbreak, China has witnessed the potential of cutting-edge technologies like artificial intelligence, big data, and cloud computing.

Several tech giants in China have announced plans to scale up their data centers. Following China’s ‘new infrastructure’ initiative, Chinese internet giant Tencent revealed its $70 billion investment on key sectors over the next five years towards making advances in cloud computing and artificial intelligence (AI) while Chinese e-commerce behemoth Alibaba announced to invest $28.7 billion into its cloud and data center infrastructure over the next three years. Also, Baidu, the leading search engine in China, has planned to set up 5 million servers in the next 10 years.

Real Estate Investment Trusts (REITS) it is!

The National Development and Reform Commission of the People’s Republic of China (NDRC) and the China Securities Regulatory Commission (CSRC) jointly issued the ‘Notice Concerning Work in Relation to Advancing Infrastructure Real Estate Investment Trust Trials’ in April, with an aim to channelise personal savings and private capital into infrastructure projects.

Then in August, NDRC announced that it had recently issued the ‘Notice Concerning Effectively Performing Infrastructure REIT Trial Project Application Work’, which indicates that the Chinese government will give priority to “national key strategic” infrastructure projects when receiving applications for REIT trials, as well as “encourage the undertaking of trials for new forms of infrastructure.”

The Notice further indicates that “national key strategic” infrastructure projects will include those associated with regional development plans for the Beijing–Tianjin–Hebei (Jing-Jin-Ji) area, Xiong’an New Area in Hebei province, the Yangtze River Delta, the Greater Bay Area, and the Hainan Free Trade Port.

As per this new initiative, China expedites infrastructure REITs so that fresh capital could be converted into investment capital in the long term while reducing leverage. Dozens of companies have begun preparing for launching publicly tradable REITs since the trial released. However, the applications are still under consideration as the requirements are very strict.

In the next three to five years, such products are likely to provide about 6 trillion Yuan (around $900 billion) in financial support for China’s infrastructure construction, thus further improving the speed and efficiency of China’s infrastructure build out.

New Area

This is closely linked to new development and is being framed in new ways. ‘New Area’ has rocketed to ubiquity, especially when we consider the site selection. Government influence may steer investors’ location preferences here in China.

To promote urbanization and industrialization, and now digitalization, many new areas and zones have been established to concentrate investments and the labor force as well as resources within designated region with more flexible management systems.

For example, Xiong’an New Area, in Hebei province, was announced to be a National New Area as the “Millennium Plan, National Event” by the State Council and the Central Committee of the Communist Party of China. It has become the third new special zone with “national significance” after Shenzhen SEZ and Shanghai Pudong New Area while the other two have already driven the rapid development of the Pearl River Delta and Yangtze River Delta respectively. Xiong’an New Area connects the Silk Road Economic Belt and the 21st-century Maritime Silk Road with the Guangdong–Hong Kong–Macao Greater Bay Area, so as to drive the development of the Beijing–Tianjin–Hebei economic triangle in Northern China.

Currently, China is speeding up its digital transformation of economy with a plan to build industrial ‘big data’ centers nationwide, enabling massive amounts of information to be used for developing more efficient industries. Supported by government, construction of data center is boosted in these regions such as the Beijing–Tianjin–Hebei (Jing-Jin-Ji) area, Xiong’an New Area, the Yangtze River Delta, the Greater Bay Area, and the Hainan Free Trade Port.

Power Usage Efficiency (PUE)

The word ‘PUE’ never loses its power. The availability and cost of electricity are important factors influencing data center site selection in China. The energy consumption quota of data centers must be approved by governmental agencies including National Economy and Informatization Commission and National Development and Reform Commission.

Electricity resources in coastal areas and tier I cities are restricted as local electricity generation is insufficient to meet consumption, meaning that obtaining approval for large energy consuming businesses can be problematic.

In order to ensure effective control of energy consumption, improving energy efficiency in major energy fields and accelerating the application of energy-saving and low-carbonizing technologies have become the main goals and tasks of local government during the 13th Five-Year Plan period.

China’s Tier-1 cities, with their high concentrations of data centers and infrastructure, have been first to act, guided by the central government’s 13th Five Year Plan targets for energy use and intensity. Beijing, Shanghai and Shenzhen have already applied strict PUE rules when approving new data centers, pushing the sector towards greener operations with higher energy efficiency.

Although Beijing, Shanghai, Shenzhen, Guangzhou and other coastal areas are the major data center markets in the country, areas like Inner Mongolia, Gansu, and Guizhou pop up to be players under central policy support. National-level big data and data center pilot projects sprout up in these renewables-rich provinces for they offer ample electricity supply and cheap tariffs. Local governments in these areas also offer discounts for electricity consumption by data centers, which can further reduce operating costs.

Built-to-suit Data Center

Data center investment continues to rise in China with growing interest. Larger population bases, more social media activities, data protection and cyber security legislation forcing users to switch to onshore data centers. Does it mean that to invest in this market never fail? Of course not. The consensus of ‘Customer-centric’ is being embraced by players in China market.

As a part of this, ‘built-to-suit’ data center was developed. Customizing a data center, ‘built-to-suit’, is a much different, more challenging undertaking for a certain type of business buyer, or even specific client.

Different from before, one-size-fits-all data center solutions are no longer a priority at a larger scale. More data center service providers are looking to be in tune with clients from pre-development and align with their expectations.

At the same time, built-to-suit also provides a cost transparency and speed to market. As it is specifically designed to fit the clients’ every need, built-to-suit data center can meet the goals with best practices. In 2020, Dictionary.com selected “Unprecedented” as the word of the year. In 2021, it could be “Transformation”.

For more insights on China, do check out our digital event China Datacenter Market Insights happening on March 5!

Huawei launches Smart PV solution

Huawei FusionSolar, the Smart PV solution from Huawei has launched an integrated system for residential solar energy solution.
This announcement was made at its launch event in Ho Chi Minh City.
In 2020, Huawei delivered a total capacity of 4.3 GW inverters in Vietnam. To further develop the market, Huawei FusionSolar launches a new range of products for a complete integrated system for Vietnamese homeowners including Smart Energy Controller SUN2000-2-5KTL-L1 and SUN2000-5-10KTL-M1, ESS (Energy Storage System) LUNA2000-5/10/15-S0 and Smart PV Optimizer SUN2000-450W-P.

Alen Zhang, Sales Director of Huawei FusionSolar Vietnam said: “With 30 years of expertise in digital information technology, we’ve incorporated many latest ICT technologies for optimal power generation, in building the foundation for solar to become the main energy source. Vietnam is a country with high solar power potential and we look forward to contributing towards greater adoption of solar energy among Vietnamese families with Huawei FusionSolar solutions”.

When it comes to residential PV rooftop systems, residential installers are usually expected to provide homeowners with a robust, cost-effective, self-consumption system that remains highly efficient, flexible and easy to install, and comes with smart applications and reliable customer service. Huawei’s new range of products has been developed to focus on delivering three main benefits: optimal electricity cost, active safety and better experience.

Optimal Electricity Cost
PV energy generated by solar panels meets the electricity demand of homes in the daytime, and the surplus energy generated is used to charge batteries, which then discharges to meet peak electricity consumption in the night time. In this way, residential PV systems could achieve high self-consumption levels and this is where Huawei’s residential intelligent battery Smart String ESS LUNA2000-5/10/15-S0 could truly shine. Each battery pack has a built-in energy optimizer and supports independent charge and discharge management.

The AI-Powered Arc Fault Circuit Interrupter (AFCI) proactively mitigate fire risk with rapid shutdown technologies achieving zero voltage on the rooftop and zero arc risks for dual-layer protection. Huawei is the first in the industry to integrate the AI algorithm into AFCI, enabling three unique features: accurate arc fault detection via local neural network algorithm, speedy arc fault protection by inverter shutdown in 0.5s which is far below 2.5s which is stipulated in UL1699B, and pinpointing arc fault positioning, saving 80 per cent onsite troubleshooting time and cost.

The FusionSolar inverter portfolio consists of single-phase (Smart Energy Controller SUN2000-2-5KTL-L1) and three-phase (Smart Energy Controller SUN2000-5-10KTL-M1) products, both are compatible with Huawei’s SUN2000-450W-P power optimizer.

The Smart PV Management System, available in both web portal and mobile application, provides real-time energy flow and energy balance readings, and PV panel-level performance management.

Chindata Group releases 2030 carbon-neutral roadmap

Asia’s leading hyperscale data center solution provider Chindata Group published its roadmap to be carbon neutral for all its next-generation hyper-scale data centers in China with its 100% renewable energy solution by 2030, 30 years sooner than China’s 2060 carbon-neutral pledge.

This is part of Chindata Group’s strategy to invest in clean energy with an installed capacity of no less than 2GW by 2030. Recently, the company has already signed renewable energy contracts with local governments, such as Datong and Zhangjiakou of China, totaling 1300 MW of installed capacity.

With accelerated digital transformation, there is a growing demand for carrier-neutral hyperscale data infrastructure, which allows interconnection between multiple telecommunication carriers and/or colocation providers. 

As a result, data centers will require a huge local energy supply. Data center provider thus becomes crucial in helping help tech companies and their users across the world to achieve carbon neutrality. 

As the first-of-its-kind company in China to launch the 2030 carbon neutrality roadmap, Chindata Group says it is committed to work together with partners to progress toward a sustainable future.

While catering to clients’ computing power needs, Chindata Group locate most of its hyperscale data centers in regions with rich wind and solar resources, making it possible to tap local surplus sustainable energy. In 2019 alone, Chindata Group has achieved a portfolio renewable energy mix of 37%.

The second solution is to minimize energy use. Thanks to advances in green technology in green building, IT equipment, and cooling system, in 2019, Chindata Group’s data centers use approximately 27.5% less energy than the global industry average, an equivalent of 173,087 tons of carbon dioxide emissions reduction,  according to Uptime Institute. 

Sustainability has been the buzzword for data centers construction and management in recent years. With Southeast Asia being the key drivers of data center growth, it remains to be seen how players from this region embrace sustainability.

China unveils underwater data center in Zhuhai

China has unveiled the country’s first underwater data center project in the Guangdong Province of Zhuhai.

According to Chinese state media China News Service (CNS), the underwater data center project is led by maritime technology company Beijing Highlander. The data center, containing racks of servers, will be sealed in an airtight vessel and will be submerged near a port in Zhuhai.

Xu Tan, Vice President of Beijing Highlander, told CNS that a large data center with an annual economic volume that exceeds $46 billion (300 billion yuan) is vital to building new infrastructure in the country. As such, it is scientifically the most effective to power data centers via underwater resources in offshore waters, Xu said.

Beijing Highlander also revealed that it plans to carry out and build more underwater data center projects over the next five years across the Greater China region, including the Yangtze River Delta, the Hainan Free Trade Port, and Guangong-Hong Kong-Macau Greater Bay Area.

Underwater DC wave

This development comes on the heels of a September announcement by Microsoft, which were along these lines. Microsoft’s Project Natick team deployed the Northern Isles datacenter 117 feet deep to the seafloor in spring 2018. Since then, team members tested and monitored the performance and reliability of the datacenter’s servers.

The team hypothesized that a sealed container on the ocean floor could provide ways to improve the overall reliability of data centers. On land, corrosion from oxygen and humidity, temperature fluctuations and bumps and jostles from people who replace broken components are all variables that can contribute to equipment failure.

The Northern Isles deployment confirmed their hypothesis, which could have implications for data centers on land, in the future.

Lessons learned from Project Natick also are informing Microsoft’s data center sustainability strategy around energy, waste and water, said Ben Cutler, a project manager in Microsoft’s Special Projects research group who leads Project Natick.

What’s more, he added, the proven reliability of underwater data centers has prompted discussions with a Microsoft team in Azure that’s looking to serve customers who need to deploy and operate tactical and critical data centers anywhere in the world.

“We are populating the globe with edge devices, large and small,” said William Chappell, vice president of mission systems for Azure in a blog piece. “To learn how to make data centers reliable enough not to need human touch is a dream of ours.”

Tencent invests $279 million in AI chip startup

Tech giant Tencent has invested a staggering $279 million (1.8 billion yuan) into an artificial intelligence (AI) semiconductor chips manufacturing company in China.

Enflame Technology, headquartered in Shanghai, has received funding from Tencent and several other investors including China’s state-owned conglomerate group CITIC, and investment firms China International Capital Corporation (CICC) and Primavera.

Tencent’s investment will allow it to segue into the booming semiconductor chip industry, which is currently dominated by NVIDIA, AMD, and most recently, Intel after its acquisition of US chipmaker Xilinx.

This move by the Chinese tech company is also expected to contribute to China’s plan to become more self-reliant in the technology sector after numerous tech-related bans by the US, such as TikTok and Huawei’s 5G development.

Founded in 1998, Tencent is best known for messaging app WeChat and multiplayer video game League of Legends. The company reported $5.88 billion in profit in the third quarter of 2020, a 29% year-on-year increase.

This is Tencent’s fourth time injecting funds into Enflame Technology, which was founded in 2018.

Semiconductor chips produced by companies such as Enflame Technology are becoming more important to the global tech market, because these chips are capable of processing large amounts of data which are used to train AI models and power data centers.

AI technology is taking over

Technological developments, increase in demand for Big Data and analytics, and increased digitisation across all sectors are factors fuelling the growth of the global AI hardware market.

The onset of COVID-19 has fuelled utility & adoption of artificial intelligence (AI) hardware, due to its ability to screen, track and predict the present and future patients affected by coronavirus infection.  According to the NewVantage Partners, the number of companies that invest over $500 million annually in big data increased to 21.1% in 2019 from 12.7% in 2018, indicating the importance of AI and Big Data across organizations, hence propelling industry growth.

Meanwhile, Asia Pacific market is anticipated to experience robust growth over 2020-2027, owing to increasing investment in AI technology by different end-use industries, and rising demand for big data and analytics in the region.

Chinese-owned Global Switch to sell data center business for $11 billion

In what could be the largest deal in the data center segment, Chinese-owned Global Switch to sell business for $11 billion.

According to a Bloomberg exclusive, Global Switch is in preliminary talks to take the sale forward. The company is working with advisors and professionals to procure a sale from interested suitors, according to sources who requested anonymity, as the talks are private and in early stages.

Founded in 1998 and owned by Chinese steel maker Jiangsu Shagang Group Co., Global Switch is based in London and is also backed by Avic Trust Co., a trust firm with an investment portfolio that covers property, capital, and securities.

The sale needs to be seen in the backdrop of an attempt to list Global Switch in the Hong Kong markets in 2019, which was shelved. In August 2019, Shagang bought an additional 24 per cent stake for 1.8 billion pounds from British billionaires David and Simon Reuben. With the deal, Shagang became the largest shareholder. Global Switch and Shagang Group declined to comment on the matter.

Data Center sales on the rise

With this, Global Switch becomes one of many industry operators that are banking on the sharp rise in demand for data centers due to the pandemic.

In April 2020, global investment banking firm Macquarie acquired an 88% stake in Sydney-based AirTrunk for $3 billion, and the company simultaneously opened data centers in Hong Kong and Singapore, with a new hyperscale data center in Tokyo coming in late 2021. Additionally, Digital Realty Trust Inc bought InterXion Holding NV for $8.8 billion and this deal, if it goes through, could be one of the largest in the data center segment.

Global Switch was founded in 1998 and led by CEO John Corcoran, who owns and operates data centres in Europe and Asia Pacific. The company currently has around 390,000 square meters of space and hosts tech infrastructure of government organisations, financial institutions and mobile carriers, with annual revenues of $597 million (£439 million) in 2019.

Chinese hyperscale data center operator Chindata confirms public offering in USA

Following reports last week, Chindata Group has confirmed on 9 September 2020 it will publicly file an initial public offering in the United States of America.

The number of American Depositary Shares and price range of the offering has not been determined, but it is speculated that the carrier-neutral hyperscale data center solution provider in Asia Pacific will look to raise US$400 million.

Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. will act as joint bookrunners when Chindata Group goes live on The Nasdaq Global Select Market under the ticker symbol ‘CD’.

The fifth largest Chinese IPO in the US this year

According to unnamed sources close to the Bain Capital-backed hyperscale data center operator, the firm plans to be publicly listed as early as the third quarter of 2020.

As a result, the market value of Chindata is forecast to reach US$3 to US$4 billion as long as the IPO proceeds.

The decision to list in the US as opposed to Hong Kong was made because fellow Chinese data center owners 21Vianet and GDS Holdings saw success in the NASDAQ stock exchange, with a 209% and 106% respective jump in performance in the last year. 21Vianet also raised US$353 million last week in a follow-on offering.

With a target of US$400 million, the listing in New York is expected to be the fifth largest Chinese IPO this year, suggests Refinitive data. The data also identifies Chindata as the 20th Chinese company to list in the US in 2020, despite threats of delisting and geopolitical tensions between the US and China.

So far this year, even with the economically devastating COVID-19 pandemic, the 19 current Chinese IPOs have raised US$6.96 billion, which is more than double the US$3.42 billion raised in 2019.

This Chindata public offering will be filed by submitting a registration with the US Securities and Exchange Commission.

Earlier this year, South Korea’s SK Holdings reportedly paid US$300 million for an 8.9% share in Chindata Group. And in 2019, Bain Capital acquired the Group with US$570 million in strategic financing, valuing Chindata at US$3.1 billion.

Chindata Group also merged with Bridge Data Centres to continue hyperscale expansion plans into China, Malaysia and India.

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Chinese hyperscale data center operator Chindata targets $400m in US IPO, despite political tensions

Chindata Group is reportedly preparing an initial public offering (IPO) in the United States of America with a target of raising US$400 million, reports Reuters.

According to unnamed sources close to the Bain Capital-backed hyperscale data center operator, the firm plans to be publicly listed as early as the third quarter of 2020.

As a result, the market value of Chindata is forecast to reach US$3 to US$4 billion as long as the IPO proceeds.

The decision to list in the US as opposed to Hong Kong was made because fellow Chinese data center owners 21Vianet and GDS Holdings saw success in the NASDAQ stock exchange, with a 209% and 106% respective jump in performance in the last year. 21Vianet also raised US$353 million last week in a follow-on offering.

The fifth largest Chinese IPO in the US this year

With a target of US$400 million, the listing in New York is expected to be the fifth largest Chinese IPO this year, suggests Refinitive data. The data also identifies Chindata as the 20th Chinese company to list in the US in 2020, despite threats of delisting and geopolitical tensions between the US and China.

So far this year, even with the economically devastating COVID-19 pandemic, the 19 current Chinese IPOs have raised US$6.96 billion, which is more than double the US$3.42 billion raised in 2019.

This Chindata IPO will be filed confidentially by submitting a registration with the US Securities and Exchange Commission.

Earlier this year, South Korea’s SK Holdings reportedly paid US$300 million for an 8.9% share in Chindata Group. And in 2019, Bain Capital acquired the Group with US$570 million in strategic financing, valuing Chindata at US$3.1 billion.

Chindata Group also merged with Bridge Data Centres to continue hyperscale expansion plans into China, Malaysia and India.

Bain Capital and Chindata declined to comment on the IPO.

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Is cloud hosting right for your business?

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BDx makes history with first data center in Nanjing to receive Uptime Tier III Certification

Big Data Exchange (BDx) has made history with their new data center in Nanjing, which is the first facility in the city to achieve the Uptime Institute Tier III Certification of Design Documents.

The data center being constructed in Nanjing, China received the highly sought after certification by proving the facility required no shutdowns for equipment replacement and maintenance.

“Ensuring that BDx meets, and even exceeds, the industry standards for our infrastructure is our top priority for all of our facilities, including our Nanjing data center,” said David Kim, the Chief Operating Officer for BDx.

The Nanjing data center known as NKG1 is powered by two separate 10 kilovolt feeders from two substations. The completion of this power source brings the BDx facility one step closer to launching.

“With 1,000 racks, the NKG1 facility is ideal for local organizations, Chinese OTTs and overseas companies looking to house their IT infrastructures in China,” said Sujit Panda, the Chief Technology Officer for BDx.

Upon the launch of the Nanjing data center, scheduled for October 2020, the facility will connect to the fully redundant command and control systems provided by the BDx Global Operating Platform. NKG1 is also strategically positioned to allow customers to interconnect across BDx clusters as well as public clouds and third-party data centers.

“The data center is strategically positioned along the newly defined Yangtze River Delta, one of the nation’s biggest inland ports, making it an ideal location for national and international businesses who want to grow their presence in China,” added Mr. Panda.

BDx announced the construction of their Nanjing data center back in February and would include 3,800 once fully completed.

“Its location and connectivity help BDx form a network hub designed to meet rising internet and cloud exchange demands from international and domestic customers,” said Bill Gao, the Executive Vice President and CEO for BDx China in February.

The Nanjing data center will add to the current eight data centers acquired by BDx in Guangzhou, Hong Kong and Singapore.

Explore data center power and cooling innovations with W.Media

Did you know the data center power market is set to exceed ~US$27 billion by 2024?

This is because the increasing demand for data centers has led to energy consumption of around 3% of the total energy generated globally, costing billions of dollars per year.

Operators in Southeast Asia are now exploring power and cooling innovations, including floating data centerssolar power and hybrid cooling.

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Princeton Digital Group sets aggressive data center expansion plans to complement “New Infrastructure” strategy in China

China has a large and fast-growing data center market, driven by data center operators like Princeton Digital Group complementing the needs of the Government’s “New Infrastructure” strategy to develop more facilities.

The “New Infrastructure” initiative was introduced in early 2020, promoting data center developments, like Princeton Digital Group’s three current and three upcoming facilities, to enable China’s digital future where 710 million citizens are online.

“Online businesses have changed the lives of over one billion people, introducing new ways of life such as digital payment, online education, streaming media, e-sports,” said Zhang Yonghai, Princeton Digital Group’s Managing Director for China.

With China’s “Internet Plus” strategy encouraging businesses to digitally transform, 70% of the population now use e-commerce services, increasing demand for more data centers to keep the world’s second largest economy online.

Mr. Yonghai Zhang, Princeton Digital Group’s Managing Director for China
Mr. Yonghai Zhang, Princeton Digital Group’s Managing Director for China

“With the continued development of new generation AI, 5G, industrial internet, the Internet of Things and autonomous vehicles, there will only be greater demand for higher standard data center resources,” added Mr. Zhang, who has more than 28 years of experience in the IDC industry.

Cloud computing giants and large internet companies like Alibaba, Tencent, ByteDance, Pinduoduo and more are also bringing large demand for data center developments and hyperscale facilities, stimulating another wave of fast growth for the Chinese data center market.

As a result, China has more than 360 data centers, almost 200 providers, and is expected to grow by 3% annually until 2024.

The scale of these data centers is also growing exponentially to meet the growing data capacity demands, from 8MW being the mainstream a few years ago, to 40MW in 2020. The smallest approved Shanghai project in 2020 being a capacity of 24MW, while the largest facilities can be bigger than 100MW, as local customers often choose large-scale customised procurement projects.

This relatively mature infrastructure, scale and rapid growth in the Chinese data center market is key to the stable development of Princeton Digital Group’s business. PDG already has mature data center assets in large hotspots, including Beijing, Xi’an and Guangzhou as well as a 42MW flagship data center in Shanghai.

“Guided by the Yangtze River Delta integration policies and trends, we are strategically building data centers in Shanghai and its surrounding areas with the goal of creating a new highland of cloud computing and big data analytics,” said Mr. Zhang.

Princeton Digital Group is also developing two new campus projects in Nanjing and Nantong located in Jiangsu province. Their Nanjing facility will be a 41KW data center spanning more than 35,000 square metres, with construction expected to begin in the fourth quarter of this year. The Nantong project is also expected to begin construction later this year, and will have a first phase capacity of 26MW upon completion in late 2022.

Princeton Digital Group’s Nanjing data center
Princeton Digital Group’s Nanjing data center

Princeton Digital Group strategically selected these two cities, as they are emerging new metros that have been influenced by the “New Infrastructure” policies. Nanjing is the capital of Jiangsu Province and an important transportation and communications hub, while Nantong is closely connected to Shanghai where tech giants like Tencent are located and a new generation of IT is expected to exceed a GDP of US$143 billion in 2020.

Facing the challenges of China’s rapid data center expansion

While China’s rapidly developing data center market brings lucrative opportunities, changes and challenges also arise, including higher customer requirements and standards in design and construction, changes in supply chain, strict PUE regulations and facing fierce competition.

With its manufacturing advantages and highly reliable water and electricity supply, China has a complete industrial chain of manufacturing, installation, and after-sale services to supply data center construction and hardware equipment. 

But the country’s data center market has its own unique supply chain ecosystem and high entry barrier where water and electricity are provided by state-controlled enterprises, for which data center operators must apply for the capacity with these designated companies.

Princeton Digital Group's Nantong Data Center
Princeton Digital Group’s Nantong Data Center

“Each of our projects is managed by a full team of business development professionals specialized in policies and regulations of the local governments, including energy experts with excellent resources and understanding on how to obtain the relevant permits and approvals,” said Mr. Zhang, who previously worked for HP China as their General Manager for their data center business in China.

Recently, these supply chains have also started to change to offer custom-manufacture for cloud computing customers, offering more manageable lead time and pricing. To constantly adapt to these changes, Princeton Digital Group partners with both global and local suppliers.

“Backed by deep-pocketed Warburg-Pincus, all current projects by Princeton Digital Group in China are developed on their own land and have acquired all the necessary permits for energy, environmental assessment and power resources to ensure a smooth development process,” added Mr. Zhang.

Unlike other countries in Asia where electricity supplies are less reliable, the challenge in China is meeting strict PUE requirements where data centers must meet a 1.3-1.4 PUE.

Yanfei Zhao
Mr. Zhao Yanfei, Princeton Digital Group’s VP of Engineering

“This is particularly challenging to achieve in some economically developed cities in the south of China where the climate is warmer. And as data center scales become larger in China, bigger challenges are imposed on design processes, project and operation management,” said Zhao Yanfei, Princeton Digital Group’s VP of Engineering, who has 15 years of experience in the real estate and IDC sectors in China.

To overcome this challenge, Princeton Digital Group’s facilities are controlled at a PUE of 1.3-1.4 using leading energy and cooling technologies like high voltage direct currents, indirect evaporative cooling and natural cooling technologies.

Princeton Digital Group also leverages the vast experience and cultural knowledge of their in-country team. Princeton Digital Group is able to build fast and aggressively throughout Asia with strong data center industry names like Mr. Zhang, who was responsible for Pioneer Universe Group’s entire data center business in China, and Mr. Zhao, who oversaw the build of all Baidu’s hyperscale data centers across China.

As a pan-Asian operator, Princeton Digital Group is also able to consolidate their industry knowledge, strategic alliances and resources from multiple countries within the Group to support foreign customers interested in entering the Chinese market as well as customers in China looking to explore other markets in Asia Pacific.

“China-based hyperscalers and emerging internet companies are expanding beyond the border and especially into the APAC region at an unprecedented speed. But their growth plans are nonetheless bottlenecked in various markets due to differences in culture, regulation and practises,” added Mr. Zhang.

Princeton Digital Group actively looks for opportunities to serve hyperscalers and collaborate with customers and partners to create multiple channels of communications and resource sharing throughout Asia, including China, Singapore and Indonesia.

Discover how Princeton Digital Group’s in-depth experience, insight and success in multiple markets make them an optimal choice of partner in and out of China.

By Stuart Crowley, Editor, W.Media

SK Holdings pays $300m for 8.9% in data center operator Chindata Group

South Korea’s SK Holdings has reportedly paid US$300 million for an 8.9% share in the world’s first hyperscale data center operator Chindata Group.

The deal valued the data center provider, which was acquired by Bain Capital in 2019, at US$3.1 billion.

SK Holdings, the parent company of SK Group, owns six data centers in South Korea, while Chindata Group has multiple interconnected large-scale campuses serving global clients in China.

After merging with Bridge Data Centres last year, Chindata Group is also expanding into Malaysia with two hyperscale data centers in Cyberjaya and a new facility in the financial and telecom hub of Mumbai, India.

Chindata Group’s vision is to power its next-generation hyperscale data centers using 100% renewable energy.

“We diligently develop our hyperscale data centers at strategic locations where energy, connectivity and clients’ business demands intersect. In this way, we could help customers realize their business strategy together with the long-term goal of ‘go green’,” said Alex Ju, the Founder and CEO of Chindata Group.

Chindata Group was ranked in first place by Greenpeace in their Clean Cloud 2020 report and achieved the Hyperscale Innovation award at the DataCloud Awards 2019.

“We are dedicated to providing more cost-effective and resilient data center services for human development, and empowering emerging countries,” added Mr. Ju.

The acquisition between SK Holdings and Chindata Group is expected to close the third quarter of 2020.

What is the state of green data centers in Asia?

Data center operators are trending towards the implementation of green data center solutions. But not all countries in Asia may be adopting sustainable technologies at the same pace.

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Keppel Data Centres launches $214m project to expand into China

Keppel Data Centres has announced their expansion plans to enter the data center market in China.

The Singapore-based data center provider’s private equity fund, Alpha DC Fund, will acquire and develop a high specification data center in Huizhou’s Tonghu Smart City.

“Demand for quality data centers has been increasing rapidly with the expansion of the digital economy globally,” said Mr. Alvin Mah, the CEO of Alpha DC Fund.

The Fund entered into an agreement through its subsidiary Alpha Investment Partners to acquire Huizhou Bike for US$214 million. Huizhou Bike, a subsidiary of Country Garden Holdings, originally had plans on developing the greenfield data center in Tonghu Smart City.

Country Garden, one of China’s leading property developers, will work with Keppel Data Centres to construct the core and shell of the data center in the park owned by Country Garden.

“This collaboration will allow us to deliver a safe, reliable and high specification data centre facility for customers in the Greater Bay Area,” said Mr. Wong Wai Meng, the CEO of Keppel Data Centres. 

For Alpha DC Fund’s first asset in China, the data center will fit more than 6,000 high-density racks, cover 487,000sq ft, and meet China Data Centre Class A GB-standard equivalent specifications.

The facility will be developed over two stages to be completed in 2021 and 2022. And Keppel suggests the data center can expand to another 538,200sq ft to reach more than one million square feet in total.

Upon completion, Keppel Data Centres will work with Shenzhen Huateng Smart Technology to operate the data center.

“The project will contribute to the upgrading of information infrastructure and economic development in Huizhou,” added Mr. Wai Meng.

The development is said to be strategically aligned with the Chinese Government’s New Infrastructure campaign, focusing on information-based and innovative infrastructure.

The country is expected to invest more than $3.5 trillion in construction over the next five years, according to Haitong Securities.

Keppel’s expansion into China follows their plans to develop data centers in Singapore with Singapore Press Holdings and exploration into sustainable green data center solutions.

What is the state of green data centers in Asia?

Data centers can produce staggering numbers of carbon emissions and electricity wastage. That’s why data center operators are trending towards the implementation of green data center solutions.

But not all countries in Asia may be adopting sustainable technologies at the same pace.

Register for free today to explore how the state of green data centers in South Korea compare to the rest of Asia.

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