Study Period | 2018 - 2030 |
Base Year For Estimation | 2024 |
Forecast Data Period | 2025 - 2030 |
Market Volume (2025) | 2.32 Thousand MW |
Market Volume (2030) | 3.66 Thousand MW |
CAGR | 9.51 % |
Market Concentration | Medium |
Major Players![]() *Disclaimer: Major Players sorted in no particular order |
Japan Data Center Market Analysis
The Japan Data Center Market size is estimated at 2.32 thousand MW in 2025, and is expected to reach 3.66 thousand MW by 2030, growing at a CAGR of 9.51%. Further, the market is expected to generate colocation revenue of USD 2,511.5 Million in 2025 and is projected to reach USD 4,981.5 Million by 2030, growing at a CAGR of 14.68% during the forecast period (2025-2030).
Japan's data center market industry is undergoing significant transformation driven by the government's comprehensive Digital Garden City Nation scheme, which includes an investment of JPY 5.7 trillion for nationwide digitalization efforts. The Japanese Growth Strategy Council has prioritized digital transformation as a key area for stimulating economic growth, implementing new policies and measures through the "Basic Act on Forming a Digital Society." The Ministry of Economy, Trade, and Industry's recent initiative in 2023 to decentralize data centers across regions demonstrates the government's commitment to digital infrastructure development, with over 100 regional governments expressing interest in hosting new facilities. The industry's maturity is evident in its operational efficiency, with data centers achieving a rack space utilization rate of 75.1% in 2022, indicating robust demand and effective data center capacity management.
The market is witnessing a substantial shift toward sustainable infrastructure development, particularly in the deployment of green data centers. NTT Corporation's significant investment of approximately JPY 40 billion in 2022 for new green data centers exemplifies this trend, with facilities utilizing 100% renewable energy. The Japanese government has implemented ambitious environmental targets, offering tax incentives amounting to JPY 5 billion for carbon neutrality investments in data center infrastructure. These initiatives align with the country's broader goal of achieving zero greenhouse emissions by 2050, encouraging data center operators to adopt energy-efficient technologies and sustainable practices in their operations.
The manufacturing sector's digital transformation is driving significant demand for data center growth services, with Japanese manufacturing companies investing approximately USD 890 million in digital infrastructure. This transformation is characterized by the integration of advanced technologies such as private 5G networks, IoT devices, and smart factory solutions. The industry landscape is evolving rapidly, with 27 operators managing 97 data center facilities expected by 2024, indicating a robust and competitive market environment. The adoption of tier 3 and tier 4 facilities continues to dominate the market, with enterprises prioritizing high reliability and operational efficiency.
Regional development initiatives are reshaping the data center landscape across Japan, with the government actively promoting facilities in colder regions to leverage natural cooling advantages and reduce electricity costs. The Ministry of Internal Affairs and Communications has set an ambitious target of achieving 98% 5G population coverage by the end of March 2024, supporting the distributed data center strategy. The government's plan to invest in subsea cable infrastructure and data center decentralization, part of the JPY 5.7 trillion Digital Garden City Nation scheme, aims to ensure bandwidth diversity and revitalize regional areas. This comprehensive approach to infrastructure development includes plans for constructing more than a dozen data centers in rural areas over the next five years, coupled with the deployment of fiber cable off Japan's west coast.
Japan Data Center Market Trends
Rising smartphone penetration rate and emergence of new e-commerce platform in the country would drive the market
- The total number of smartphone users in Japan was 107.1 million in 2022. It is expected to witness a CAGR of 1.3% during the forecast period, reaching 117.77 million by 2029.
- In 2021, the smartphone penetration rate among households in Japan was close to 89%. The average time people spend on mobile internet use has increased in recent years, offering business opportunities to related industries, such as e-commerce.
- With the emergence of online shopping platforms, small businesses are also switching to online modes of payment and digital presence in the e-commerce world. The big and well-established companies also incorporate e-commerce platforms and the traditional form of business. For instance, in April 2022, Westlake Akishima, a Tokyo-based major supplier of specialty stabilizers for the PVC industry, announced a new e-commerce platform, extending the online buying experience to its buyer with security and convenience. Such developments are shaping the e-commerce and online payment ecosystem, impacting mobile payments in Japan.
Expansion of 5G roll out by major mobile operators coupled with government support in same segment would drive the data center market
- The Japanese government assigned the three mobile operators in Japan — NTT Docomo, KDDI au, and Softbank, as well as the new arrival Rakuten Mobile, with 5G spectrum in April 2019. In the coming years, the four Japanese carriers are expected to spend more than USD 14 billion in capital expenditures, including investments in base stations, servers, and fiber optics, to build their 5G networks.
- Since the start of 2021, Japan’s mobile operators have been accelerating their 5G rollout. SoftBank aimed to deploy over 50,000 5G base stations and reach 90% population coverage by the end of March 2022. KDDI au aims to boost from just 10,000 base stations in March 2021 to 50,000 a year later. NTT DoCoMo was expanding its 5G network during 2021, aiming to reach 10,000 base stations by June and 20,000 by the end of March 2022, with 55% population coverage using the new high-speed 5G spectrum.
- The Ministry of International Affairs and Communications aims to continue moving the Japanese 5G experience forward. It set a target of 98% 5G population coverage by the end of March 2024. Overall, Japan aims to boost the amount of spectrum available for 5G services.
OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Growing inclusion of online businesses along with streaming and online TV adoption leads to the data center demand
- Government investment of JPY 50 billion on subsea cable and data center decentralization would increase data center demand
- Government initiative towards national broadband strategy and fixed network investment by telecom companies is boosting the market demand
Segment Analysis: Data Center Size
Mega Segment in Japan Data Center Market
The mega data center segment dominates the Japanese data center market, holding approximately 37% data center market share in 2024. With the advent of 5G technology and industrial digitalization, the demand for mega data centers continues to rise significantly in the country. The segment's prominence is particularly evident in Tokyo, where 70% of the mega facilities are located, followed by Okuma and Kitakyushu. Major players like Digital Realty Trust Inc., AirTrunk Operating Pty Ltd, and IDC Frontier Inc. are driving the segment's growth with multiple mega facilities each. These companies are projected to expand their combined capacity to 345 MW, focusing on strategic locations in Tokyo, Osaka, and Kyoto, where local governments offer attractive incentives, including tax benefits on electricity and land.

Small Segment in Japan Data Center Market
The small data center segment is experiencing the highest growth rate in the Japanese data center market, with an expected growth of approximately 13% during 2024-2029. This growth is particularly noteworthy despite the segment's relatively small current market presence. The segment's expansion is driven by companies like Marunouchi Direct Access, Telehouse (KDDI Corporation), Digital Edge, Edge Centre, and AT Tokyo, which primarily operate these facilities across Tokyo. The construction of five new small-size data centers is currently underway, demonstrating continued investment in this segment. However, with the growing popularity of 5G technology and the exponential increase in data generation, there is a notable shift towards massive and mega data centers in the country.
Remaining Segments in Data Center Size Market
The massive, large, and medium segments play crucial roles in Japan's data center market landscape. The massive segment caters to enterprises requiring substantial computing power but not at the scale of mega facilities, with facilities primarily concentrated in Tokyo and Osaka. The large segment serves as a backbone for numerous enterprise-level operations, offering a balance between capacity and manageability. The medium segment focuses on providing specialized services to specific industry verticals, with most facilities maintaining Tier 3 certification standards. These segments collectively contribute to the market's diversity, offering various options to meet different organizational needs and technological requirements.
Segment Analysis: Tier Type
Tier 3 Segment in Japan Data Center Market
Tier 3 data centers dominate the Japanese data center market, accounting for approximately 79% of the total IT load capacity in 2024. This significant data center market share is driven by the segment's superior reliability and affordability compared to other tiers. Tokyo hosts the maximum number of Tier 3 data centers in the country, with a market share of around 57%, followed by Osaka at 22%, while the remaining facilities are spread across Nagoya, Inzai, Yokkaichi, Okuma, and Kitakyushu. Major cloud service providers and enterprises prefer Tier 3 facilities due to their optimal balance of redundancy, performance, and cost-effectiveness. The segment's growth is further supported by the ongoing construction of 17 new Tier 3 data center facilities by major players like Equinix Inc., Digital Realty Trust Inc., NTT Ltd, and Vantage Data Centers, primarily concentrated in Tokyo, Osaka, Kyoto, and Inzai.
Tier 4 Segment in Japan Data Center Market
The Tier 4 segment is experiencing remarkable growth in the Japanese data center market, with projections indicating an expansion rate of approximately 23% during 2024-2029. This accelerated growth is primarily driven by increasing demand for maximum reliability and uptime from mission-critical applications and services. The segment is witnessing substantial investments in new facilities, particularly in Tokyo's hotspot, with plans for the construction of mega data centers boasting capacities exceeding 400 MW. The growth is further supported by the increasing adoption of advanced technologies and the rising need for fault-tolerant infrastructure among financial institutions and large enterprises. Major operators are focusing on incorporating cutting-edge cooling systems, power distribution, and security features to meet the stringent requirements of Tier 4 certification.
Remaining Segments in Tier Type Segmentation
Tier 1 & 2 data centers represent a small portion of the Japanese data center market, primarily serving specific niche requirements. These facilities are mainly concentrated in Tokyo and Okinawa, with plans for new small data centers in Okinawa and Nagoya. While these tiers offer basic infrastructure and are more cost-effective, their lower redundancy levels and higher downtime risks make them less attractive for most businesses in Japan's technology-driven market. The limited adoption of Tier 1 & 2 facilities reflects the market's strong preference for higher tier certifications that provide better reliability and performance guarantees.
Segment Analysis: Absorption
Utilized Segment in Japan Data Center Market
The utilized segment dominates the Japanese data center market, accounting for approximately 78% of the total IT load capacity in 2024, demonstrating its significant market presence. This segment is also projected to grow at around 7% CAGR during 2024-2029, driven by increasing digitization efforts across the country. The Japanese government's massive digitalization initiative with a budget of JPY 5.7 trillion has been a key factor in driving utilization rates. While Japan's public spending on cloud services remains among the lowest globally, corporate adoption is progressing rapidly, with penetration rates rising significantly for SaaS, IaaS, and PaaS services, particularly in back-office applications. The utilized capacity is experiencing constant growth due to the increasing demand from various sectors, and Japan is positioned to become a major data center market in North Asia, especially as the allure of Hong Kong diminishes with growing regional challenges. The segment's strong performance is further supported by the country's robust technological infrastructure and favorable business environment for data center operations.
Non-Utilized Segment in Japan Data Center Market
The non-utilized segment represents the available capacity in Japanese data centers that remains to be leveraged, playing a crucial role in the market's future expansion potential. This segment serves as a strategic reserve for accommodating sudden surges in demand and provides flexibility for data center operators to scale their operations. The availability of non-utilized capacity enables data centers to maintain operational efficiency while ensuring they can respond quickly to new client requirements. Data center operators carefully manage this capacity to optimize their resource allocation and maintain competitive pricing structures. The segment also acts as a buffer for peak usage periods and helps maintain service quality during high-demand situations. The presence of non-utilized capacity is particularly important in major technology hubs like Tokyo and Osaka, where demand can fluctuate significantly based on market conditions and technological advancements. This segment also provides opportunities for new market entrants and existing players to expand their operations without immediate infrastructure investments.
Japan Data Center Industry Overview
Top Companies in Japan Data Center Market
The market is characterized by significant investments in infrastructure modernization and expansion initiatives by leading players. Data center companies in Japan are focusing on developing energy-efficient facilities with advanced cooling systems and implementing sustainable practices to reduce carbon footprints. Strategic partnerships with cloud service providers and network operators are becoming increasingly common to enhance service offerings and market reach. Operators are also emphasizing the importance of obtaining various international certifications and standards to ensure service quality and reliability. The industry is witnessing a trend toward developing carrier-neutral facilities with high-density computing capabilities and enhanced interconnection options. Companies are actively pursuing geographic expansion, particularly in key metropolitan areas like Tokyo and Osaka, while also exploring emerging locations for new facility development.
Market Dominated by Global Technology Leaders
The Japanese data center market exhibits a balanced mix of global technology conglomerates and domestic telecommunications giants. International players like Equinix, Digital Realty Trust, and AirTrunk operate alongside domestic powerhouses such as IDC Frontier (SoftBank Group) and NEC Corporation, creating a competitive yet collaborative ecosystem. The market structure is characterized by strategic partnerships between global and local players to leverage respective strengths in technology expertise and local market knowledge. The industry is witnessing increasing consolidation through joint ventures and strategic alliances, particularly in the development of hyperscale facilities.
The market demonstrates moderate concentration levels, with the top players collectively holding a significant data center market share by company while maintaining healthy competition. Merger and acquisition activities are primarily driven by the need to expand geographic presence and enhance technological capabilities. Companies are increasingly focusing on developing specialized offerings for different market segments, from retail colocation to wholesale services. The competitive landscape is further shaped by the entry of new international players and the expansion of existing operators, leading to increased investment in infrastructure development and service innovation.
Innovation and Sustainability Drive Future Growth
Success in the market increasingly depends on operators' ability to provide sustainable, energy-efficient solutions while maintaining high service reliability. Companies need to focus on developing next-generation cooling technologies and implementing renewable energy solutions to meet growing environmental concerns. The ability to offer flexible, scalable solutions that can accommodate varying customer requirements, from small enterprises to hyperscale clients, is becoming crucial. Operators must also invest in advanced security measures and maintain multiple compliance certifications to address growing cybersecurity concerns and regulatory requirements.
Market players need to develop strong relationships with cloud service providers and establish robust interconnection ecosystems to remain competitive. The focus should be on building strategic locations near business hubs while also exploring emerging markets in secondary cities. Companies must invest in automation and artificial intelligence to optimize operations and reduce costs. The regulatory environment, particularly regarding data sovereignty and environmental standards, will continue to shape market dynamics. Success will also depend on the ability to provide value-added services such as hybrid cloud solutions and edge computing capabilities, while maintaining competitive pricing structures. The largest data center companies are likely to lead these innovations, ensuring they capture significant data center shares in the evolving market.
Japan Data Center Market Leaders
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Digital Realty Trust Inc.
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Equinix Inc.
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IDC Frontier Inc. (SoftBank Group)
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NEC Corporation
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NTT Ltd
- *Disclaimer: Major Players sorted in no particular order
Japan Data Center 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 in the new data center, named TY15. The first phase of TY15 will provide an initial capacity of approximately 1,200 cabinets, which will reach 3,700 cabinets when fully built out.
- October 2022: Zenlayer entered a joint venture with Megaport to strengthen and expand its presence globally. The partnership aims at providing enhanced services such as improved network connectivity, real-time provisioning, and on demand private connectivity for its clients around the globe.
- September 2022: NTT Corporation announced the investment of approximately JPY 40 billion through NTT Global Data Centers Corporation to build a new "Keihanna Data Center" in Kyoto Prefecture. The building is a four-story, seismic-isolated structure that will stably supply a total of 30 MW for IT load (starting at 6 MW and gradually moving to a server room space of 10,900 sq. m (equivalent to 4,800 racks).
Japan Data Center Market Report - Table of Contents
1. EXECUTIVE SUMMARY & KEY FINDINGS
2. REPORT OFFERS
3. INTRODUCTION
- 3.1 Study Assumptions & Market Definition
- 3.2 Scope of the Study
- 3.3 Research Methodology
4. MARKET OUTLOOK
- 4.1 It Load Capacity
- 4.2 Raised Floor Space
- 4.3 Colocation Revenue
- 4.4 Installed Racks
- 4.5 Rack Space Utilization
- 4.6 Submarine Cable
5. Key Industry Trends
- 5.1 Smartphone Users
- 5.2 Data Traffic Per Smartphone
- 5.3 Mobile Data Speed
- 5.4 Broadband Data Speed
- 5.5 Fiber Connectivity Network
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5.6 Regulatory Framework
- 5.6.1 Japan
- 5.7 Value Chain & Distribution Channel Analysis
6. MARKET SEGMENTATION (INCLUDES MARKET SIZE IN VOLUME, FORECASTS UP TO 2030 AND ANALYSIS OF GROWTH PROSPECTS)
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6.1 Hotspot
- 6.1.1 Osaka
- 6.1.2 Tokyo
- 6.1.3 Rest of Japan
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6.2 Data Center Size
- 6.2.1 Large
- 6.2.2 Massive
- 6.2.3 Medium
- 6.2.4 Mega
- 6.2.5 Small
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6.3 Tier Type
- 6.3.1 Tier 1 and 2
- 6.3.2 Tier 3
- 6.3.3 Tier 4
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6.4 Absorption
- 6.4.1 Non-Utilized
- 6.4.2 Utilized
- 6.4.2.1 By Colocation Type
- 6.4.2.1.1 Hyperscale
- 6.4.2.1.2 Retail
- 6.4.2.1.3 Wholesale
- 6.4.2.2 By End User
- 6.4.2.2.1 BFSI
- 6.4.2.2.2 Cloud
- 6.4.2.2.3 E-Commerce
- 6.4.2.2.4 Government
- 6.4.2.2.5 Manufacturing
- 6.4.2.2.6 Media & Entertainment
- 6.4.2.2.7 Telecom
- 6.4.2.2.8 Other End User
7. COMPETITIVE LANDSCAPE
- 7.1 Market Share Analysis
- 7.2 Company Landscape
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7.3 Company Profiles (includes Global Level Overview, Market Level Overview, Core Business Segments, Financials, Headcount, Key Information, Market Rank, Market Share, Products and Services, and Analysis of Recent Developments).
- 7.3.1 AirTrunk Operating Pty Ltd
- 7.3.2 Arteria Networks Corporation
- 7.3.3 Colt Technology Services
- 7.3.4 Digital Edge (Singapore) Holdings Pte Ltd
- 7.3.5 Digital Realty Trust Inc.
- 7.3.6 Equinix Inc.
- 7.3.7 IDC Frontier Inc. (SoftBank Group)
- 7.3.8 NEC Corporation
- 7.3.9 netXDC (SCSK Corporation)
- 7.3.10 NTT Ltd
- 7.3.11 Telehouse (KDDI Corporation)
- 7.3.12 Zenlayer Inc.
- 7.4 LIST OF COMPANIES STUDIED
8. KEY STRATEGIC QUESTIONS FOR DATA CENTER CEOS
9. APPENDIX
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9.1 Global Overview
- 9.1.1 Overview
- 9.1.2 Porter’s Five Forces Framework
- 9.1.3 Global Value Chain Analysis
- 9.1.4 Global Market Size and DROs
- 9.2 Sources & References
- 9.3 List of Tables & Figures
- 9.4 Primary Insights
- 9.5 Data Pack
- 9.6 Glossary of Terms
Japan Data Center Industry Segmentation
Osaka, Tokyo are covered as segments by Hotspot. Large, Massive, Medium, Mega, Small are covered as segments by Data Center Size. Tier 1 and 2, Tier 3, Tier 4 are covered as segments by Tier Type. Non-Utilized, Utilized are covered as segments by Absorption.Hotspot | Osaka | |||
Tokyo | ||||
Rest of Japan | ||||
Data Center Size | Large | |||
Massive | ||||
Medium | ||||
Mega | ||||
Small | ||||
Tier Type | Tier 1 and 2 | |||
Tier 3 | ||||
Tier 4 | ||||
Absorption | Non-Utilized | |||
Utilized | By Colocation Type | Hyperscale | ||
Retail | ||||
Wholesale | ||||
By End User | BFSI | |||
Cloud | ||||
E-Commerce | ||||
Government | ||||
Manufacturing | ||||
Media & Entertainment | ||||
Telecom | ||||
Other End User |
Japan Data Center Market Research FAQs
What is the current Japan Data Center Market size?
The Japan Data Center Market is projected to register a CAGR of 9.51% during the forecast period (2025-2030).
Who are the key players in Japan Data Center Market?
Digital Realty Trust Inc., Equinix Inc., IDC Frontier Inc. (SoftBank Group), NEC Corporation and NTT Ltd are the major companies operating in the Japan Data Center Market.
Which segment has the biggest share in the Japan Data Center Market?
In the Japan Data Center Market, the Tier 3 segment accounts for the largest share by tier type.
Which is the fastest growing segment in the Japan Data Center Market?
In 2025, the Tier 1 and 2 segment accounts for the fastest growing by tier type in the Japan Data Center Market.
What years does this Japan Data Center Market cover, and what was the market size in 2025?
In 2025, the Japan Data Center Market size was estimated at 2.32 thousand. The report covers the Japan Data Center Market historical market size for years: 2018, 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Japan Data Center Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
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Japan Data Center Market Research
Mordor Intelligence provides comprehensive insights into the japan data center market by leveraging our extensive expertise in the data center industry. Our research thoroughly examines the rapidly expanding landscape of data centers in japan. We pay particular attention to tokyo data centers and emerging facilities across the country. The analysis covers developments through data japan 2024. It includes detailed assessments of data center capacity and infrastructure developments, while considering japan size and the geographical distribution of facilities.
Stakeholders gain valuable insights through our detailed report, available as an easy-to-download PDF. This report examines cloud manufacturing trends, data center growth patterns, and technological advancements. The analysis provides crucial information about datacenter market size projections, facility distributions, and operational metrics across major regions. Our research encompasses current mega trends affecting the industry, japan data speed infrastructure, and emerging opportunities in tokyo colocation services. This offers stakeholders a robust foundation for strategic decision-making in this dynamic market landscape.