Market Size of Japan Data Center Construction Industry
| 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.
