Market Trends of china data center Industry
Huawei, Apple, Xiaomi, Oppo, and Vivo offer cheap smartphones with high end features which attracts consumers to spend more these products creating a hige demand in smartphones in the country
- The number of Chinese smartphone users was 950 million in 2022, and the figure is expected to reach 1.8 billion by the end of the forecast period (2023-2029), registering a CAGR of 10.2%. The spread of 4G and 5G connectivity across the country has improved mobile communication, making smartphones a basic necessity for people.
- Chinese smartphone companies are offering affordable smartphones with high-end features, leading to an increase in smartphone users in the country. Around 50% of users replace their phones every 12-18 months, making companies innovate their phones frequently. Currently, the major market players are Huawei, Apple, Xiaomi, Oppo, and Vivo.
- This increase in smartphone users has positively impacted the growth of the data center market in the country. During the study period, when the number of smartphone users increased fivefold, the number of racks in data centers increased from around 70k in 2017 to 280k in 2021. This trend is expected to be witnessed during the forecast period as well.
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Chinese government's "Broadband China Strategy coupled with increased fiber connectivity, boost the data centers in the country
- The Chinese government's "Broadband China Strategy," drafted in 2013 and implemented in 2015, is accredited for spreading broadband connectivity across the country, primarily in remote locations. In 2021, under this strategy, the broadband speed reached 100 Mbps for residential use in cities and 20 Mbps in rural regions. On the other hand, the broadband speed for commercial/industrial use increased from an average speed of 100 Mbps in 2015 to 1 Gbps in 2021. With further expansion of the fiber connectivity network, average speeds are estimated to rise significantly in the coming years.
- In order to provide high data speeds, the Chinese market increased the distance of laying fiber optic cables over the years. The deployment of optic fiber cable networks in the country registered a CAGR of 8.5% during 2017-2022. The deployment of fiber optic cables spurred last-mile internet connectivity in the country. As these cables offer better connectivity and higher bandwidths, most companies replaced them with traditional copper cables to offer better and upgraded services.
- Stable broadband speed, predominantly via fiber cables, is crucial for the expansion of data centers and their communication with other data centers and internet exchanges (IX). It has become common for companies to store their business's critical data in the cloud, colocation, and in-house. Within these storage locations, various services are provided to their customers across different servers. With the increase in the number of points of communication, it becomes critical to keep communication as fast as possible. Therefore, strong broadband connectivity across the country is expected to support the data centers to maintain 100% uptime during the forecast period.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Increasing usage of OTT subscriptions and mobile gaming along with social media penetration increases the data center market
- Implementation of national FTTH standards across the country, increases the data center demand in China
- Increase in the penetration rate of the 5G network in the country, drives the data center market
