Japan Data Center Construction Market Size
| Study Period | 2024 - 2030 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2030 |
| CAGR | 3.25 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Japan Data Center Construction Market Analysis
Japan's Data Center Construction Market is projected to register a CAGR of 3.25% over the next 5 years. The country houses 207 data centers holding the third majority in the Asia Pacific region. The demand for newer data centers in the country can be attributed to the rise in raw data generation owing to the large-scale adoption of cloud computing, the Internet of Things (IoT), and artificial intelligence (AI).
- Japan plans to hit carbon neutrality by 2050. During the pandemic, The Japanese government was to subsidize 50% of the building costs towards new zero carbon-emissions data centers and upgrade existing facilities as part of a new USD 7.3 billion initiative to innovate the industry and cut carbon emissions.
- To reduce carbon emissions and the amount of energy the data center uses, which is mainly required to maintain server-happy temperatures. Japan plans to build more new facilities in its colder regions. Such efforts by the government are pushing the construction of green data centers in colder regions.
- The deployment of 5G technology in the country is one of the significant factors which is driving the demand for data center construction in the country. Companies such as Rakuten, NTT Docomo, KDDI, and others, have already launched 5G mobile services covering various prefectures in the country.
- Moreover, the impact of edge computing on data center construction is expected to be significant. Such disruption is reducing dependence on the small and medium hyperscale data centers during the forecast.
- The COVID-19 pandemic increased cloud adoption and the need for digital services such as video conferencing, resulting in the need for new data centers. In addition, the Lendlease Data Centre Partners (LLDCP) expects to complete the data center located in Greater Tokyo by 2024. The facility is on approximately 33,000 sq m of land with more than 60,000 sq m of gross floor area. The data center was constructed to meet the rising demand for digital services amid COVID-19.
Japan Data Center Construction Market Trends
Tier 3 is the largest Tier Type
- Tier-3 data centers are mostly preferred by SMBs (small and medium businesses) for their far superior redundancy protection offerings. There is a significant jump in uptime from tier-2, with tier-3 offering annual uptime of 99.982%. The segment is expected to grow from 1,300 MW in 2022 to over 1,900 MW by 2029, registering a CAGR of 5.51%. These data centers are mainly opted for by large companies.
- Tier-4 facilities are large businesses' next most preferred data centers due to their performance, lower downtime, and 99.99% uptime. However, most facilities still prefer tier-3 data centers due to their long-term financial and operational sustainability. Tier 3 is the most widely adopted standard across the industry. However, the growth rate for tier-4 facilities is expected to be the largest.
- Tier-1 & tier-2 data centers are the least preferred due to their higher downtime durations and low redundancies, but start-up companies usually prefer these data centers. However, in Japan, start-up companies also prefer tier-3 data center facilities. Currently, in Japan, there are no facilities certified with Tier 1 and Tier 2, and this trend is expected to continue during the forecast period.
Hyperscale data centers growing popularity among large enterprises
- Hyperscale data center facilities in the Japanese market reached an IT load capacity of 432.9 MW in 2022. The growing cloud penetration in the country is driving constructions to the hyperscale data center market. According to the Ministry of Internal Affairs and Communications, the telecommunication industry utilized the highest cloud services in 2021, resulting in greater dependency on hyperscale data centers.
- Hyperscale data centers are expected to overtake retail colocation to accommodate higher-density needs from hyperscale platforms. Hyperscale data centers (HSDCs) are concentrated mainly in Inzai City in Chiba and the western region of Tokyo in the Kanto area. The Kansai region is located in Osaka city center and the northeastern parts of Osaka prefecture, including the Saito area.
- A global data center vendor invested an initial amount into tens of billions of Japanese yen in the Tokyo metropolitan region for one block of a hyperscale data center it constructed. The entire project is rumored to be in excess of JPY 100 billion (USD 687.6 million). The source funding for this project came from Asian sovereign wealth funds, and a joint venture between the global DC vendor and a Japanese company is expected to be in charge of its operations.
- Such development points to the globalization of the DC business, and such projects are becoming investment targets as REITs. The demand for connectivity in data centers is expected to continue, including from cloud vendors. Leveraging favorable locations to construct hyperscale data centers will continue with major real estate companies entering the business.
Japan Data Center Construction Industry Overview
Japan's Data Center Construction Market is moderately fragmented, with the top five companies occupying most of the market share. The major players in this market are AECOM, DSCO Group, NTT Facilities, Studio One Design, Turner, and Townsend (sorted alphabetically).
In June 2023, Digital Edge announced the construction of TYO7 in partnership with real estate developer Hulic. The company has planned an eight-story data center to meet the demand of end users and expects to provide services from 2025.
In July 2023, Equinix announced the launch of its hyperscale data center TY13x in Japan, supported by up to 36MW of IT load capacity. Such projects are driving opportunities for the vendors studied in the market.
Japan Data Center Construction Market Leaders
AECOM
DSCO Group
NTT Facilities
Studio one Design
Turner and Townsend
*Disclaimer: Major Players sorted in no particular order
Japan Data Center Construction Market News
- November 2022: Equinix announced its 15th international business exchange (IBX) data center in Tokyo, Japan. The company said that it had made an initial investment of USD 115 million on the new data center, touted TY15. The first phase of TY15 is expected to provide an initial capacity of approximately 1,200 cabinets and 3,700 cabinets when fully built out. Such investments provide opportunities for the vendors in the market.
- September 2022: NTT Corporation announced to invest approximately YEN 40 billion through NTT Global Data Centers Corporation to build a new "Keihanna Data Center" in Kyoto Prefecture. The building is a 4-story structure that houses supply a total of 30 MW from IT load to a server room space of 10,900 sqm (equivalent to 4,800 racks). Such investments provide opportunities for the vendors in the market.
Table of Contents
1. INTRODUCTION
1.1 Study Assumption & Market Definition
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Dynamics
4.1 Market Overview
4.2 Market Drivers
4.2.1 Growing E-commerce and Hi-tech industries driving the DC construction in the country
4.2.2 Major initiatives undertaken by government to promote digital economy and connectivity infrastructure
4.3 Market Restraints
4.3.1 High Power Consumption and emission contribution of Data Centers
4.4 Value Chain / Supply Chain Analysis
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Assessment of COVID-19 Impact
5. Key Industry Statistics
5.1 Planned/Under Construction IT Load Capacity
5.2 Planned/Under Construction Raised Floor Space
5.3 Planned/Under Construction Submarine Cable
6. MARKET SEGMENTATION
6.1 Tier Type
6.1.1 Tier 1 and 2
6.1.2 Tier 3
6.1.3 Tier 4
6.2 Data Center Size
6.2.1 Small
6.2.2 Medium
6.2.3 Large
6.2.4 Mega
6.2.5 Massive
6.3 Infrastructure
6.3.1 Cooling Infrastructure
6.3.1.1 Air-based Cooling
6.3.1.2 Liquid-based Cooling
6.3.1.3 Evaporative Cooling
6.3.2 Power Infrastructure
6.3.2.1 UPS Systems
6.3.2.2 Generators
6.3.2.3 Power Distribution Unit (PDU)
6.3.3 Racks and Cabinets
6.3.4 Servers
6.3.5 Networking Equipment
6.3.6 Physical Security Infrastructure
6.3.7 Design and Consulting Services
6.3.8 Other Infrastructure
6.4 End-User
6.4.1 IT & Telecommunication
6.4.2 BFSI
6.4.3 Government
6.4.4 Healthcare
6.4.5 Other End User
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 AECOM
7.1.2 HIBIYA ENGINEERING,Ltd.
7.1.3 CSF Group
7.1.4 DSCO Group
7.1.5 Daiwa House Industry Co., Ltd.
7.1.6 NTT Ltd.
7.1.7 Sato Kogyo (S) Pte Ltd.
7.1.8 Obayashi Corporation
7.1.9 Nakano Corporation
7.1.10 Cummins Inc.
7.1.11 Kienta Engineering Construction
7.1.12 Hutchinson Builders
7.1.13 Fortis Construction
7.1.14 IBM Corporation
7.1.15 SAS Institute Inc.
7.1.16 GIGA-BYTE Technology Co., Ltd.
7.1.17 Hensel Phelps Construction Co. Inc.
7.1.18 Schneider Electric SE
7.1.19 Turner Construction Co.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Japan 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 Japan Data Center Construction Market is segmented by Tier Type (Tier 1 and 2, Tier 3, and Tier 4), by Data Center Size (Small, Medium, Large, Massive, and Mega), by Infrastructure (Cooling Infrastructure (Air-based Cooling, Liquid-based Cooling, Evaporative Cooling), Power Infrastructure (UPS Systems, Generators, Power Distribution Unit (PDU), Racks and Cabinets, Servers, Networking Equipment, Physical Security Infrastructure, Design and Consulting Services, and Other Infrastructure), and End User ( IT & Telecommunication, BFSI, Government, Healthcare, and Other End User). The market sizes and forecasts are provided in values of USD for all the above segments.
| Tier Type | |
| Tier 1 and 2 | |
| Tier 3 | |
| Tier 4 |
| Data Center Size | |
| Small | |
| Medium | |
| Large | |
| Mega | |
| Massive |
| Infrastructure | |||||
| |||||
| |||||
| Racks and Cabinets | |||||
| Servers | |||||
| Networking Equipment | |||||
| Physical Security Infrastructure | |||||
| Design and Consulting Services | |||||
| Other Infrastructure |
| End-User | |
| IT & Telecommunication | |
| BFSI | |
| Government | |
| Healthcare | |
| Other End User |
Frequently Asked Questions
What is the current Japan Data Center Construction Market size?
The Japan Data Center Construction Market is projected to register a CAGR of 3.25% during the forecast period (2024-2030)
Who are the key players in Japan Data Center Construction Market?
AECOM, DSCO Group, NTT Facilities, Studio one Design and Turner and Townsend are the major companies operating in the Japan Data Center Construction Market.
What years does this Japan Data Center Construction Market cover?
The report covers the Japan Data Center Construction Market historical market size for years: . The report also forecasts the Japan Data Center Construction Market size for years: 2024, 2025, 2026, 2027, 2028, 2029 and 2030.
Japan Data Center Construction Industry Report
Statistics for the 2024 Japan Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Japan Data Center Construction analysis includes a market forecast outlook to for 2024 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
