South America Data Center Construction Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 11.90 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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South America Data Center Construction Market Analysis
The South American data center construction market is projected to register a CAGR of 11.9%.
- The upcoming IT load capacity in the region is expected to reach 1,806.4 MW by 2029 for under construction IT load capacity.
- The construction of raised floor area for data centers in the region is expected to reach 7.8 million sq. ft by 2029 for under construction raised floor space.
- The region's total number of racks to be installed is expected to reach 392,072 units by 2029, with Brazil expected to house the maximum number of racks by that time for planned racks.
- Currently, four submarine cable projects are under construction in the region. One such submarine cable, estimated to start service in 2025, is Caribbean Express (CX), stretching over 3472 kilometers with landing points from Cartagena, Colombia, for planned submarine cables.
South America Data Center Construction Market Trends
End User Outlook
- The cloud, telecom, and banking, financial services, and insurance (BFSI) end-user segments are expected to drive significant demand in the regional data center market. The demand for cloud services is promising in Brazil, Chile, Argentina, and other countries.
- In Argentina, the evolution of the legal and regulatory environment for cloud computing has been faster and more in line with recent technological developments compared to other regional countries. Recently, Amazon Web Services (AWS) announced plans to invest approximately USD 800 million over a decade in a new data center in Argentina.
- In the telecom end-user segment of the South American data center market, the regions of Latin America and the Caribbean are projected to amass around 398 million 5G connections by the year 2027. All municipalities in Brazil boasting a minimum of 200,000 residents are anticipated to be equipped with a 5G network, complete with at least one antenna, by July 31, 2026. The 5G spectrum auction held in Brazil in October 2021 garnered an impressive sum of approximately USD 8.5 billion.
- By the year 2035, the introduction of 5G technology in Brazil could potentially yield a substantial economic impact of USD 1.2 trillion, accompanied by a productivity surge amounting to USD 3 trillion. Furthermore, it is envisaged that approximately 10% of network connections across South America will transition to 5G by 2025.
- South America has witnessed a digital revolution in banking and financial services and is quickly adapting. The importance of fintech, neo-banks, and digital wallets across Latin America is rising. The abovementioned end-user segments are anticipated to record positive growth. At least 1,166 fintech initiatives are currently operating across 18 countries, with two out of three reporting to being in the advantage stages of development. Recent research by the Bank of America demonstrates that, in Brazil alone, in 2021, fintech providers such as Nubank, PagBank, Mercado Pago, Ame Digital, and Banco Pan had more than 95 million monthly active users, surpassing traditional Brazilian banks.
Brazil is projected to witness majority of data center construction activities during the forecast period
- Brazil and Chile hold the largest South American data center market shares. The Brazilian government provides incentives through the Regime Especial de Tributação do Programa Nacional de Banda Larga (REPNBL) program, which includes incentives for purchasing infrastructure that help improve colocation services in the country.
- Brazil has witnessed an absolute growth of 40% in investments from the 2021 values due to investments from colocation providers such as Ascenty, Scala Data Centers, and ODATA and telecom operators such as GlobeNet Telecom, Ava Telecom, and Embratel. Sao Paulo, Brazil's significant financial capital, serves as the primary data center hub. Other cities, such as Rio de Janeiro and Fortaleza, are major investment locations in Brazil.
- Chile has competitive energy prices, primarily fueled by plans to take advantage of its natural renewable energy generation potential over the coming years. Energy costs have dropped to one-third of what they were five years ago, mainly based on renewable energy that now makes up 46% of the total produced.
- Chile traditionally has some of the region's best telecommunications infrastructure, and two major fiber projects are underway to ensure it will have a fully redundant fiber backbone. These include the state-funded Fibra Optica Austral (FOA) submarine cable connecting the deep south and Gtd's 3,500 km north-south submarine cable. In 2022, colocation operators, such as Scala Data Centers, ODATA, Ascenty (Digital Realty), and EdgeConneX, were the major investors in the Chilean data center market.
- In Argentina, Buenos Aires is the major investment destination, with the identified third-party facilities in the city contributing to over 90% of the existing power capacity. Most existing data centers are smaller facilities built over a limited area.
- The International Renewable Energy Agency (IRENA) stated that renewable energy contributed to around 33% of the overall electricity capacity in 2020 in Argentina, and the country aims to generate 20% of the electricity via renewable sources by 2025. The country aims to be one of the largest data center hubs in the coming time period.
South America Data Center Construction Industry Overview
The South American data center construction market is fairly fragmented, with significant players such as ABB, Legrand, AECOM, DRP Construction, and Fortis Construction.
In November 2022, Ascenty invested USD 290 million in constructing five new data centers in South America. The locations of the data centers are in Brazil, Chile, and Colombia.
South America Data Center Construction Market Leaders
AECOM
Legrand
ABB
DPR Construction Inc.
Fortis Construction
*Disclaimer: Major Players sorted in no particular order
South America Data Center Construction Market News
- November 2022: Ascenty, the prevailing market leader in Latin America's data center domain, unveiled its groundbreaking initiative to construct five novel facilities, further cementing its position of preeminence with an aggregate of 33 infrastructures spanning Brazil, Chile, Mexico, and now Colombia. The novel data centers are strategically situated, including Santiago 3, encompassing 21,000 m² with a power capacity of 16 MW; Bogota 1 and 2, each spanning 9,000 m² and equipped with a 12 MW capacity; and finally, So Paulo 5 and 6, boasting an expansive area of 7,000 m² and a commanding capacity of 19 MW each.
- August 2022: The largest vertical data center in Latin America, SGRUTB04, with a total capacity of 18MW, was launched by Scala Data Centers, the region's top platform for environmentally friendly data centers in the hyperscale market. The Tamboré Campus, a complex owned by the firm in Greater So Paulo, Brazil, is where SGRUTB04 is situated. It is devoted to a single hyperscale client and will operate at full capacity for more than ten years. This new Scala data center is 5 meters tall, has seven floors, four dedicated to data halls, and has a total built-out space of over 140,000 square feet, or more than 1,500 racks.
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 Growth in Network Connectivity and Increased Adoption of Digital Transformation Related Technologies in the Region
4.2.2 Favorable tax Incentive Structure Introduced by Local Governments has Led to the Higher Participation from International Players
4.2.3 Ongoing Consolidation Efforts by Major Data Center Construction Companies to Aid their Expansion Activities
4.2.4 Growing Awareness on Modular Deployments and Increasing Rack Density
4.3 Market Restraints
4.3.1 Cost and Infrastructural Concerns Continue to be a Concern
4.3.2 Workforce-Related Challenges
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
6.5 Geography
6.5.1 Brazil
6.5.2 Chile
6.5.3 Rest of South America
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Turner Construction Co.
7.1.2 DPR Construction Inc.
7.1.3 Fortis Construction
7.1.4 ZFB Group
7.1.5 Aceco TI
7.1.6 AECOM Limited
7.1.7 Constructora Sudamericana S.A
7.1.8 HostDime Brasil
7.1.9 CyrusOne Inc.
7.1.10 RITTAL Sistemas Eletromecânicos Ltda. (Rittal GmbH & Co. KG)
7.1.11 Nakano Corporation
7.1.12 Legrand
7.1.13 Delta Group
7.1.14 Ascenty Data Centers E Telecomunicacoes
7.1.15 Equinix Inc.
7.1.16 NetApp Inc.
7.1.17 Oracle Corporation
7.1.18 Pure Storage Inc.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
South America Data Center Construction Industry Segmentation
A data center is a physical room, building, or facility that holds IT infrastructure used to construct, run, and provide applications and services and store and manage the data connected with those applications and services. Under data center construction, we are tracking the capital expenditure that was incurred while building the existing data center facilities and also estimating the future capex based on upcoming data center facilities.
The South America 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, Generatobrs, Power Distribution Unit (PDU), Racks and Cabinets, Servers, Networking Equipment, Physical Security Infrastructure, Design and Consulting Services, and Other Infrastructure), y End User ( IT & Telecommunication, BFSI, Government, Healthcare, and Other End User), and by Geography (Brazil, Chile, Rest of South America). 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 |
| Geography | |
| Brazil | |
| Chile | |
| Rest of South America |
Frequently Asked Questions
What is the current South America Data Center Construction Market size?
The South America Data Center Construction Market is projected to register a CAGR of 11.90% during the forecast period (2024-2029)
Who are the key players in South America Data Center Construction Market?
AECOM, Legrand, ABB, DPR Construction Inc. and Fortis Construction are the major companies operating in the South America Data Center Construction Market.
What years does this South America Data Center Construction Market cover?
The report covers the South America Data Center Construction Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the South America Data Center Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
South America Data Center Construction Industry Report
Statistics for the 2024 South America Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. South America Data Center Construction analysis includes a market forecast outlook to for 2024 to (2024to2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
