Middle East Data Center Rack Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Middle East Data Center Rack Market Trends and Insights

Hyperscale build-outs by cloud majors in Saudi Arabia and UAE

Saudi Arabia and the UAE anchor a hyperscale construction wave that requires thousands of GPU-ready racks capable of liquid cooling and 600 kW power feeds. Microsoft’s USD 545 million partnership with du exemplifies the scale of incoming demand, while the planned 5 GW AI campus in the UAE will absorb order volumes that could triple regional rack consumption within two years.^{[1]Microsoft Corporation, “du and Microsoft Partner to Accelerate UAE Hyperscale Cloud Expansion,” microsoft.com} Vendors that pre-qualify for multi-year framework agreements will lock in volume visibility and gain leverage on component sourcing. This driver strengthens the Middle East Data Center Rack market by rewarding suppliers able to integrate cooling distribution, power management, and security features within modular enclosures.

Accelerated local-content requirements driving on-shore colocation demand

Regulations now oblige operators to source predefined percentages of infrastructure from domestic facilities, prompting rack makers to establish GCC assembly lines that cut delivery times from 16 weeks to 6 weeks. Saudi Arabia’s Data Center Services Regulations and the UAE’s AI Strategy signal expanding localization thresholds, which elevate compliant suppliers and marginalize import-dependent rivals stc. Near-shoring also improves service responsiveness, a critical factor given compressed construction timelines for AI factories.

Sovereign-AI and HPC investments

National AI factories in Saudi Arabia and Qatar specify racks with biometric locks, electromagnetic shielding, and redundant power trunks that accommodate direct-to-chip liquid cooling. ^{[2] International Trade Administration, “Saudi Arabia – Customs Regulations,” trade.gov} hardware commitments alone translate into tens of thousands of racks optimized for 50 kW densities and closed-loop thermal systems nvidia. As similar sovereign projects proliferate, demand concentrates in premium, security-enhanced enclosures that drive higher average selling prices and sustain the Middle East Data Center Rack market growth.

5G-led edge sites requiring micro-module racks

Widespread 5G rollout is spawning compact, ruggedized edge data centers installed on rooftops, towers, and retail sites. Projects such as TAWAL’s micro-edge deployment use vibration-resistant enclosures with wide temperature ranges and integrated battery systems, pushing rack design beyond the conventional data-hall form factor. Although unit revenue is lower, volume growth and new applications—AI inference, private networks, smart-city analytics—create an expanding sub-segment that supports long-run market diversification.

High import tariffs on steel enclosures in non-FTA countries

Steel tariffs rising to 50% worldwide and 5% regional customs duties squeeze vendor margins and inflate customer budgets. Some manufacturers respond by shifting to aluminum alloys or composite frames, yet recertification costs and supply-chain reconfiguration erode short-term profitability. Stronger players are deploying local fabrication to bypass tariffs and preserve price competitiveness, but smaller firms risk exit or consolidation.^{[3] Huawei Technologies Co., Ltd., “Huawei Unveils AI Data Center Solution in Dubai,” huawei.com}

Water-scarcity regulations limiting liquid-cooling retrofits

Stringent water-use policies in the UAE and Saudi Arabia cap industrial withdrawals, making open-loop liquid cooling impractical in most facilities. Operators therefore specify advanced air-cooling or immersion systems that require oversized rack dimensions and sophisticated airflow management. Retrofit projects are especially exposed because existing buildings cannot accommodate closed-loop plumbing without major reconstruction, pushing operators toward greenfield builds that meet water-efficiency criteria from inception 

Segment Analysis

By Rack Size: Full Rack dominance driven by AI workloads

Full Rack systems held 74.3% Middle East Data Center Rack market share in 2024 and are projected to grow at 16.2% CAGR through 2030. Hyperscalers standardize 42U and 48U formats to streamline cable routing, power distribution, and in-rack liquid manifolds that support GPU clusters. The Middle East Data Center Rack market benefits because uniform sizing simplifies procurement, reduces installation errors, and accelerates factory-level integration. Half Rack and Quarter Rack solutions remain relevant for edge deployments where space is constrained, yet their contribution to aggregate revenue narrows as AI factories dominate expansion projects. 

Full Rack popularity is amplified by sovereign AI factories that require dense compute footprints in secure environments. As rack power envelopes climb toward 50 kW, the incremental cost of a full-height enclosure is minimal relative to the performance gains. Vendors respond by reinforcing frame integrity, integrating hot-aisle containment, and bundling busbar power rails that accommodate future density upgrades. These engineering refinements raise average selling prices, expanding the Middle East Data Center Rack market even when unit volumes plateau.

Note: Segment shares of all individual segments available upon report purchase

By Rack Height: 48U emerges as AI-optimized standard

The 42U segment retains 61.3% revenue share, largely because legacy data halls were designed around this height. However, 48U cabinets record the fastest 17.3% CAGR, reflecting AI and HPC designs that need additional vertical room for bigger power distribution units and manifold networking. The Middle East Data Center Rack market size for 48U models is forecast to double by 2028 as hyperscalers retrofit facilities to host NVIDIA GB300 systems. 

Height flexibility also aids operators migrating to direct-to-chip liquid cooling, which demands overhead piping and in-rack heat exchangers. 45U configurations serve step-up scenarios where incremental space eases cable congestion without breaching building codes, while ≥52U custom builds appear in mega-scale campuses that can accommodate taller containment corridors. Continuous growth of AI workload intensity anchors 48U cabinets as the de-facto best practice within the Middle East Data Center Rack industry.

By Rack Type: Cabinet security drives market leadership

Cabinet (Closed) racks accounted for 85.4% of the Middle East Data Center Rack market size in 2024 and will advance at 15.8% CAGR. Extreme heat, dust storms, and strict access-control policies make sealed enclosures mandatory for hyperscale and sovereign facilities. Cabinet models integrate particulate filtration, temperature-controlled airflow, and biometric locks that satisfy both environmental and regulatory demands. 

Open-frame racks find limited use in highly conditioned halls or test labs, whereas wall-mount units meet edge-and-telecom needs that prioritize space saving. Even where climate is moderated, national security guidelines often compel operators to use closed cabinets with electromagnetic shielding, reinforcing cabinet dominance. Suppliers augment value through sensor-laden door handles, remote locking, and rack-level telemetry, features that differentiate in an otherwise mature product class and enlarge the Middle East Data Center Rack market.

By Data Center Type: Hyperscaler growth reshapes infrastructure

Colocation providers led with 51.6% revenue share in 2024 because enterprises historically preferred shared facilities. The balance is shifting, and hyperscaler campuses are projected to post a 17.4% CAGR that surpasses all other facility models. Hyperscalers sign multi-year offtake agreements that convert pipeline projects into contracted demand, giving rack vendors clearer volume outlooks. 

Enterprises continue investing in on-premise and edge sites to comply with data-sovereignty rules and latency targets. Nonetheless, the hyperscaler appetite for standardized, liquid-ready cabinets sets industry specifications that ripple across the supply chain. Modular rack products that can be factory-integrated and container-shipped at scale will capture most of the incremental revenue flowing into the Middle East Data Center Rack market.

Note: Segment shares of all individual segments available upon report purchase

By Material: Aluminum gains ground despite steel dominance

Steel frames held 78.4% market share in 2024, favored for rigidity and EMI shielding. Yet aluminum cabinets grow at 17.2% CAGR as operators seek weight reduction, rust resistance, and tariff avoidance. Coastal data centers in the UAE report accelerated corrosion of untreated steel, making anodized aluminum attractive despite higher base metal cost. 

Composite and hybrid alloys surface in niche high-temperature zones where conductivity and thermal expansion properties outweigh price considerations. Suppliers are incorporating recycled aluminum, aligning with ESG targets and reducing life-cycle emissions. Steel remains dominant where cost prevails, but material diversification ensures the Middle East Data Center Rack market evolves toward lighter, more sustainable construction.

Geography Analysis

Saudi Arabia leads the Middle East Data Center Rack market with 38.4% Middle East Data Center Rack market share in 2024 after earmarking USD 100 billion for digital-infrastructure projects under Vision 2030. Partnerships with to install 500 MW of AI factories make the kingdom the largest single buyer of premium, liquid-cooling-ready enclosures nvidia. Regulatory frameworks mandate local content and enhanced physical security, compelling global vendors to partner with Saudi assemblers to retain eligibility and shorten fulfillment cycles.

The UAE is the fastest-growing geography at 16.3% CAGR, driven by Dubai’s status as an intercontinental connectivity hub and Abu Dhabi’s 5 GW AI campus. Aluminum rack adoption is highest here because coastal humidity accelerates steel corrosion. Government policy that targets full AI-native governance by 2031 translates into continuous hyperscaler expansion, guaranteeing robust rack demand during the forecast window.

Secondary markets—including Qatar, Kuwait, Bahrain, Oman, and Jordan—show rising investment intensity as governments launch localized AI frameworks and 5G deployments. Qatar alone has pledged USD 500 billion for data centers, a figure that can transform supply-chain logistics for vendors that establish regional distribution hubs. Limited Tier-IV floor space and smaller project sizes keep overall share modest, yet edge computing and micro-module racks open profitable sub-segments in these countries.