Market Trends of APAC Data Center Construction Industry
China witnessing rapid data center construction activities
- The IT market in China has seen increased dependency on data centers in recent years. As the cloud becomes more popular, more hyperscale data centers are also being built. China released a series of policy documents giving the green light to construct several new data center clusters in four regions around the country.
- The new data center clusters are part of a plan called the 'Eastern Data, Western Computing.' This involves the construction of ten data center clusters and eight computing hubs to connect the active eastern regions to the resource-rich western regions and drive a balance for supply and demand of computing capacity aiding China's digital transformation and technological development.
- Further, an increase in the penetration rate of the 5G network in the country is expected to increase data generation, which would raise the need for more space for storing and processing these data. Apart from personal usage, 5G technology is expected to heavily influence industrial automation, primarily in manufacturing, mining, and healthcare. This trend is expected to raise the occupancy rate in data centers in the coming years, driving the demand for data center construction in the country during the forecast period.
- In addition, market movements have increased the cost of data center construction in some Asian countries like Singapore, Japan, and South Korea, as they fall under the top 10 countries affected by construction cost inflation. Thus, attracting more Data Center projects in China than in other Asian countries.
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Growing Adoption of Hyperscale Data Centers in Large Enterprises is Driving the Market's Growth
- Hyperscale data centers are used in different sectors to increase computing ability, memory, networking infrastructure, and storage resources. The features of hyperscale data centers include the physical infrastructure and distribution systems supporting the data centers for maximizing cooling efficiency and the ability to scale computing tasks efficiently broadly.
- In Thailand, ST Telemedia Global Data Center (STT GDC) announced the construction of its hyperscale data center facility consisting of two seven-story buildings within a data center campus where each building will support an IT load of 20 MW. The construction is expected to take place in two phases. This increased rate of construction of hyperscale data centers is expected to drive the market's growth significantly.
- In addition, emerging economies, including India, Indonesia, and Malaysia, provide affordable alternatives to consolidated markets such as Singapore and Japan. Incentives and tax benefits offered by the government of emerging economies are projected to drive the new data center construction activities during the forecast period.
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