Hong Kong Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Hong Kong Data Center Market Analysis

The Hong Kong Data Center Market size is estimated at 1.42 thousand MW in 2025, and is expected to reach 2.1 thousand MW by 2030, growing at a CAGR of 8.18%. Further, the market is expected to generate colocation revenue of USD 1,408.4 Million in 2025 and is projected to reach USD 2,541.4 Million by 2030, growing at a CAGR of 12.53% during the forecast period (2025-2030).

Hong Kong's data center market landscape is experiencing significant transformation with robust infrastructure development and facility expansion. The region currently hosts 53 colocation data center facilities, demonstrating its position as a key digital infrastructure hub in Asia. Major operators are focusing on developing high-tier facilities, with Tier 4 data centers maintaining an impressive 83% occupancy rate, highlighting the strong demand for premium data center services. The scarcity of land has led to innovative approaches, with operators increasingly focusing on converting old industrial buildings into modern data center facilities, supported by government incentives and special waivers for building upgrades.

The government's commitment to digital transformation is evident through substantial investments in the technology sector. A notable development is the allocation of HKD 11 billion by the Hong Kong Science and Technology Parks Corporation (HKSTPC) in 2023 to support high-potential technology startups. This initiative is complemented by an additional HKD 400 million investment in the Corporate Venture Fund for acceleration programs. These investments are creating a robust ecosystem that directly drives demand for data center services while fostering innovation in the sector.

The market is characterized by strong enterprise adoption, particularly among small and medium enterprises (SMEs), which comprise over 98% of business operations and employ approximately 44% of the private sector workforce. This extensive SME presence has led to increased demand for flexible colocation solutions and managed services. Data center operators are responding by offering customizable solutions, including varying rack densities and power configurations, to accommodate diverse business requirements while ensuring scalability for growing enterprises.

Sustainability and technological advancement are becoming central to data center operations in Hong Kong. Leading operators are implementing innovative cooling solutions and energy-efficient technologies to reduce their environmental impact. For instance, major providers are targeting Power Usage Effectiveness (PUE) ratings of 1.3 or lower, demonstrating a commitment to energy efficiency. The industry is also witnessing increased adoption of automation and artificial intelligence for facility management, with operators implementing sophisticated monitoring systems and predictive maintenance solutions to optimize performance and reliability.

Hong Kong Data Center Market Trends

Surge in sales of high-end specification smartphones at an affordable cost drives the market demand

• There were 7 million smartphone users in Hong Kong in 2022, which may grow from 7.2 million to 8.4 million during the forecast period, with a CAGR of 2.5%.
• Due to technological evolution, close proximity to China, and easy accessibility to high-end specification smartphones at an affordable cost led to an increase in smartphone users in the country. This increase has led to stiff competition with foreign smartphone competitor companies. For instance, SmarTone is offering 110 GB 5G mobile data, unlimited video call data for Zoom/Teams, a free HKD 2,000 (USD 257) handset, and an accessories voucher for HKD 398 (USD 51.1) per month.
• The usage of mobile devices and social media has increased among the elderly aged 65 years or above. However, about 3 in 5 of them had smartphones in 2018, compared to only 2 in 5 in 2016.
• People in Hong Kong are shifting to digital wallets because of their convenience, especially amid the COVID-19 pandemic, which has led to a rise in smartphone users. For instance, Hong Kong’s use of digital wallets for online payments is expected to overtake credit cards by 2025. Alipay, WeChat Pay, Tap & Go, and Octopus collectively attracted more than 4.7 million new users and 96,000 new merchants in Hong Kong by the end of 2021. The above instances suggest the growth of smartphone users across Hong Kong.

Increasing demand for smart devices coupled with expansion of 5G in the country drives the market demand

• Mobile data speeds in Hong Kong are expected to grow proportionally with the implementation of 5G and existing 4G services. However, the 2G segment has a lower share of consumers due to outdated technology, which would impart low speeds in Hong Kong, hence discouraging the consumers for the 2G segment.
• The availability of varying smart devices has led consumers to transition to 4G services, which has led to the decline of 3G services over the years in Hong Kong.
• Increasing demand for smart devices, such as smartphones and tablets, to use varying services such as streaming, browsing, and playing games has led to consumers opting for 4G services, thus diminishing the 3G service market over the years. The implementation of 5G is expected to further increase the data speed with the evolving technology over the years, which is expected to cater to the demand as more industries adopt automation in their companies in the manufacturing sector.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

• Lucrative internet services offers such as unlimited video call, 100 GB data permonth boosted the data centers demand in Hong Kong
• Rising fiber optic internet services and affordable broadband services by local players boost the data centers demand in the country
• Minister of Posts and Telecommunications rising projects to increase fiber connectivity network would drive the market

Segment Analysis: By Hotspot

Tseung Kwan O Segment in Hong Kong Data Center Market

Tseung Kwan O has emerged as the dominant hotspot in Hong Kong's data center market, commanding approximately 34% of the total IT load capacity in 2024. The region's strategic advantage lies in its proximity to cable landing stations, which provides superior connectivity and reduced latency for clients. The area has attracted significant investment due to government incentives for redeveloping abandoned buildings into data centers, offering companies both cost savings on construction and concessions on property and electricity expenses. The urban setting and growing digital application usage continue to drive demand in this region, while the established infrastructure and business-friendly environment make it an attractive location for both new and expanding data center operations in Tseung Kwan O.

Chai Wan Segment in Hong Kong Data Center Market

Chai Wan is demonstrating remarkable growth potential in the Hong Kong data center market, with projections indicating an expansion rate of approximately 18% from 2024 to 2029. This industrial region's growth is primarily driven by the increasing adoption of automation and Industry 4.0 initiatives in the manufacturing sector. The area's appeal is further enhanced by the demand for high-end specification facilities, particularly Tier 4 data centers in Hong Kong, from both manufacturing and IT industries. The strategic location of Chai Wan, serving as a crossroads between the Central District, Western District, and Eastern District, coupled with its efficient transport infrastructure, positions it ideally for continued expansion in the data center sector.

Remaining Segments in Hong Kong Data Center Market Hotspots

The other significant hotspots in Hong Kong's data center market include Tsuen Wan, Shatin, and various locations across the rest of Hong Kong such as Tsing Yi, Tang Po, Wong Chuk Hang, and Kwun Tong. Tsuen Wan has established itself as a crucial hub for data center operations, particularly benefiting from smart city initiatives and manufacturing sector digitalization. Shatin's proximity to IT industries has made it an attractive location for data center operators, while the rest of Hong Kong's locations offer diverse opportunities for data center development, each with unique advantages in terms of connectivity, infrastructure, and business environment. These areas continue to evolve with smart city development and digitalization services, contributing to the overall growth of Hong Kong's data center ecosystem.

Segment Analysis: By Data Center Size

Mega Segment in Hong Kong Data Center Market

The Mega data center segment dominates the Hong Kong data center market, accounting for approximately 52% market share in 2024. These huge infrastructure facilities are highly preferred due to their advanced capabilities, including minimal downtime, disaster recovery mechanisms, low latency, and high bandwidth capacities, making them particularly attractive to large businesses looking to increase their scalability. The government's data localization requirements have prompted these large companies to expand their rack capacities within these facilities. Due to land scarcity in Hong Kong, the government actively encourages data center operators to repurpose old buildings for data center facilities, leading to innovative approaches in facility development. For instance, several companies are currently working on converting former industrial buildings into state-of-the-art data centers in Tseung Kwan O, particularly in regions like Tsuen Wan West.

Small Segment in Hong Kong Data Center Market

The small data center segment is emerging as the fastest-growing category in the Hong Kong data center market, projected to experience rapid expansion between 2024 and 2029. This growth is primarily driven by the increasing demand from emerging businesses and specialized applications requiring dedicated smaller facilities. The segment is witnessing significant development with five new data center facilities currently under construction, being built with Tier 1 & 2 standards. These facilities are strategically positioned to cater to specific business requirements and niche market demands. The growth is further supported by government initiatives promoting digital transformation and supporting smaller enterprises in their technological advancement. The segment's rapid expansion is also attributed to its ability to provide more personalized services and flexible solutions for businesses with specific data management needs.

Remaining Segments in Data Center Size Market

The medium, large, and massive segments play crucial roles in Hong Kong's data center ecosystem, each serving distinct market needs. The massive segment caters to enterprises requiring substantial computing power but not quite at the mega scale, while large data centers typically serve multiple enterprise clients with significant data processing requirements. The medium segment bridges the gap between small and large facilities, offering balanced solutions for growing businesses. These segments are particularly active in key locations such as data centers in Tseung Kwan O, Tsuen Wan, and Shatin, contributing to Hong Kong's position as a major data center hub. The diversification across these segments ensures that the market can accommodate various business requirements, from regional operations to multinational corporations, while maintaining operational efficiency and service quality.

Segment Analysis: By Tier Type

Tier 4 Segment in Hong Kong Data Center Market

Tier 4 data centers in Hong Kong dominate the Hong Kong data center market, commanding approximately 47% market share in 2024, driven by the increasing demand for high-performance computing and mission-critical applications. These facilities offer superior reliability with 99.995% uptime, redundant power and cooling systems, and advanced security features that make them particularly attractive to large enterprises and cloud service providers. The segment is experiencing rapid growth with an expected growth rate of nearly 20% from 2024 to 2029, supported by the rising adoption of cloud services, digital transformation initiatives, and the increasing importance of data security and business continuity. Major technology companies and financial institutions are increasingly choosing Tier 4 facilities for their operations due to the minimal downtime, enhanced security protocols, and sophisticated infrastructure management systems these facilities provide.

Remaining Segments in Tier Type Segmentation

The other tiers in the Hong Kong data center market include Tier 3 data centers in Hong Kong and Tier 1&2 facilities, each serving distinct market needs. Tier 3 data centers offer a balance between reliability and cost-effectiveness, making them suitable for medium to large enterprises that require high availability but can tolerate slightly longer maintenance windows. These facilities feature N+1 redundancy and 72-hour power outage protection, attracting a diverse range of businesses across various sectors. Meanwhile, Tier 1&2 data centers serve as basic colocation facilities for small to medium-sized businesses with less stringent uptime requirements. While these lower-tier facilities may lack some advanced features of their higher-tier counterparts, they continue to play an important role in supporting businesses with basic hosting needs and limited budgets. Understanding the difference between Tier 3 and Tier 4 data centers is crucial for businesses when selecting the appropriate facility for their needs.

Segment Analysis: By Absorption