| Study Period | 2019 - 2031 |
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2031 |
| Market Size (2025) | USD 1.16 Billion |
| Market Size (2031) | USD 2.12 Billion |
| CAGR (2025 - 2031) | 10.54 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Israel Data Center Construction Market Analysis
The Israel Data Center Construction Market size is estimated at USD 1.16 billion in 2025, and is expected to reach USD 2.12 billion by 2031, at a CAGR of 10.54% during the forecast period (2025-2031).
Robust government support, expanding cloud services, advancements in 5G technology, smart city initiatives, IoT upgrades, and a culture of digital creativity drive rapid growth in Israel's data center market. This surge is particularly evident in the rising demand for colocation and hyperscale services.
Under Construction IT Load Capacity: The upcoming IT load capacity of the Israeli data center market is expected to reach 426 MW by 2030.
Under Construction Raised Floor Space: The country's construction of raised floor area is expected to increase by 1.5 million sq. ft by 2030.
Planned Racks: The country's total number of racks to be installed is expected to reach around 76K units by 2030. Tel Aviv is expected to house the maximum number of racks in the coming years.
Planned Submarine Cables: Close to four submarine cable systems connect Israel. In 2023, a notable submarine cable, Blue, was launched. Spanning 4,696 km, it connects with landing points in Tel Aviv.
Israel Data Center Construction Market Trends
The IT and Telecom Segment is Expected to Have Significant Market Share in the Coming years
- The IT and telecom segment in the Israeli data center market reached an IT load capacity of 20 MW in 2023. It is expected to register an annual growth of 13.8% to reach a capacity of 48.3 MW by 2029. In April 2024, as per official documents, the Israeli Ministry of Defense established a dedicated "landing zone" within Google Cloud. This zone is a secure gateway to Google's computing infrastructure, enabling the ministry to store and process data and utilize AI services.
- According to a draft contract dated March 2024, the Israeli Ministry of Defense engaged Google's consulting services to improve its Google Cloud access. The aim was to enable various units within the ministry to leverage automation technologies. The contract details a billing of over USD 1 million from Google to the Israeli Ministry of Defense for these services.
- In August 2023, Amazon.com unveiled a strategic move, committing approximately USD 7.2 billion in investments in Israel, slated to span until 2037. Simultaneously, it inaugurated its Amazon Web Services (AWS) data centers within the nation. These data centers will empower the Israeli government, granting them the capability to both run applications and securely store data within Israel's borders. Yali Rothenberg, Israel's accountant general, expressed optimism, noting that the establishment of this regional infrastructure will facilitate a significant migration of governmental workloads to the cloud. This, he believes, will play a crucial role in speeding up the country's digital transformation in the public sector.
- Israel intensifies its telecom growth efforts by rolling out a 5G network. A notable milestone was reached in April 2024, as Pelephone, in collaboration with Ericsson, unveiled Israel's inaugural independent 5G network core. This venture, dubbed the MAX G5 network, was backed by an investment of around NIS 50 million.
- Such market instances create more data needs in the coming years. This surge in data storage demand is poised to elevate the need for data centers in the region, thereby bolstering the prospects of data center construction firms in the coming years.
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The Tier 3 Segment is Expected to Hold the Major Share in the Country
- In 2023, there were around 16 data centers in Israel with Tier 3 certification, with a cumulative IT load capacity of 167.4 MW. Reliability and affordability are the major factors driving the demand for tier 3 data centers in the country. The Tier 3 segment is projected to register an annual growth rate of 9.1%, reaching around 327 MW by 2030.
- In 2023, Tel Aviv dominated the Tier 3 certified data center landscape, with Adgar leading the pack, boasting an IT load capacity of 107.9 MW across two facilities. Bezeq International Ltd is closely followed by 32.5 MW distributed over six facilities. Serverfarm LLC operated a single facility with a 10 MW IT load. EdgeConneX Inc. managed 7.7 MW under one facility, while other players in the market held smaller shares.
- During the study period, Tel Aviv is set to see the construction of about five data center facilities, all meticulously designed to adhere to Tier 3 standards. These strategic facilities are poised to add over 60 MW of IT load capacity to the region.
- Throughout the study period, key players plan to invest in data centers, including Digital Realty, Lian Group, and MedOne. These developments in the Israeli market are expected to amplify the demand for Tier 3 certified data centers. This heightened demand, particularly within the Tier 3 category, is expected to fuel the necessity for data center construction services in the coming years.
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Israel Data Center Construction Industry Overview
The Israeli data center construction market is fairly consolidated, with significant companies such as AECOM, James L Williams Middle East., Electra Group, Electra Group, and Minrav Group Ltd.
February 2024: MedOne, an Israeli data center firm, constructed two novel underground data centers on the outskirts of Tel Aviv. These centers, spanning three underground levels, will collectively cover about 30,000 square meters (322,920 square feet). The inaugural data center, situated north of Tel Aviv, is slated for a 2026 debut, with its counterpart set to follow suit in 2027.
Israel Data Center Construction Market Leaders
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AECOM
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James L Williams Middle East.
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Electra Group
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Minrav Group Ltd
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eXp Israel
- *Disclaimer: Major Players sorted in no particular order
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Israel Data Center Construction Market News
- January 2024: The Swiss fund, Lian Group, teamed up with Europe-Israel Group and PAI to develop a NIS 400 million (USD 122.5 million) facility on a 6.25-acre plot in Afula, a city in northern Israel. The consortium acquired the land south of Nazareth for NIS 80 million (USD 24.5 million) approximately six months ago. Construction commenced toward the end of 2021, with a projected completion timeline of 2025 or 2026. The group has enlisted the services of Spector Amisar Architects.
- April 2023: EdgeConneX, in a strategic move, enlarged its data center network in south Tel Aviv, Israel. The firm is constructing its third data center in Israel, bolstering its IT capacity by 7.5 MW. Situated in Rishon, this new facility will synergize with EdgeConneX's current establishments, which span two locations in Herzliya to the city's north and Petah Tikva to the east. Collectively, these sites will amass a substantial 14.5 MW capacity.
Israel Data Center Construction Industry Segmentation
Data center construction combines physical processes used to construct a data center facility. It chains construction standards with data center operational environment requirements.
The Israeli data center construction market is segmented by infrastructure (electrical infrastructure (power distribution solutions (PDU, transfer switches, switchgear, power panels, and components)), power backup solutions (UPS and generators), service - design and consulting, integration, and support and maintenance)), (mechanical infrastructure (cooling systems (immersion cooling, direct-to-chip cooling, rear door heat exchanger, and in-row and in-rack cooling)), racks, and other mechanical infrastructure)), and general construction)), and tier type (Tier 1 and 2, Tier 3, and Tier 4), and end user (banking, financial services and insurance, IT and telecommunications, government, defense, healthcare, and other end users). The market sizes and forecasts are provided in value (USD) for all the above segments.
| Market Segmentation - By Infrastructure | Market Segmentation - By Electrical Infrastructure | Power Distribution Solution | PDU - Basic and Smart - Metered and Switched solutions | |
| Transfer Switches | Static | |||
| Automatic (ATS) | ||||
| Switchgear | Low-voltage | |||
| Medium-voltage | ||||
| Power Panels and Components | ||||
| Other Power Panels and Components | ||||
| Power Backup Solutions | UPS | |||
| Generators | ||||
| Service - Design and Consulting, Integration, Support, and Maintenance | ||||
| Market Segmentation - By Mechanical Infrastructure | Cooling Systems | Immersion Cooling | ||
| Direct-to-chip Cooling | ||||
| Rear Door Heat Exchanger | ||||
| In-row and In-rack Cooling | ||||
| Racks | ||||
| Other Mechanical Infrastructure | ||||
| General Construction | ||||
| Market Segmentation - By Tier Type | Tier 1 and 2 | |||
| Tier 3 | ||||
| Tier 4 | ||||
| Market Segmentation - By End User | Banking, Financial Services, and Insurance | |||
| IT and Telecommunications | ||||
| Government and Defense | ||||
| Healthcare | ||||
| Other End Users | ||||
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Israel Data Center Construction Market Research Faqs
How big is the Israel Data Center Construction Market?
The Israel Data Center Construction Market size is expected to reach USD 1.16 billion in 2025 and grow at a CAGR of 10.54% to reach USD 2.12 billion by 2031.
What is the current Israel Data Center Construction Market size?
In 2025, the Israel Data Center Construction Market size is expected to reach USD 1.16 billion.
Who are the key players in Israel Data Center Construction Market?
AECOM, James L Williams Middle East., Electra Group, Minrav Group Ltd and eXp Israel are the major companies operating in the Israel Data Center Construction Market.
What years does this Israel Data Center Construction Market cover, and what was the market size in 2024?
In 2024, the Israel Data Center Construction Market size was estimated at USD 1.04 billion. The report covers the Israel Data Center Construction Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Israel Data Center Construction Market size for years: 2025, 2026, 2027, 2028, 2029, 2030 and 2031.
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Israel Data Center Construction Industry Report
Statistics for the 2025 Israel Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligenceā¢ Industry Reports. Israel Data Center Construction analysis includes a market forecast outlook for 2025 to 2031 and historical overview. Get a sample of this industry analysis as a free report PDF download.
