APAC Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

APAC Data Center Colocation Market - Industry Outlook & Forecast 2023-2028
The APAC data center colocation market is expected to grow at a CAGR of 8.02% from 2022-2028.

KEY HIGHLIGHTSThe APAC data center colocation market is among the top markets globally in terms of growth, led by governments’ support for data center development, expansion of multiple industrial zones, the rapid development of submarine cable connectivity, investments by cloud service providers, entry of global colocation operators in the region for joint ventures (JVs), and other factors.The deployment of 5G services and the growth in the demand for connectivity in new locations and Tier I and II cities attract investments from edge operators. For instance, edge operators, such as Leading-Edge Data Centres and Edge Centres, actively invest in establishing multiple edge data centers across Indonesia, Australia, Malaysia, the Philippines, Thailand, India, Vietnam, Thailand, and others.There is a growth in interest by governments and data center operators in renewable energy. Governments across all APAC countries take initiatives to promote the adoption of renewable energy sources. For instance, Taiwan aims to generate 20% of its electricity through renewable energy by 2025, utilizing wind and solar PV promotion plans. Taiwan’s renewable power capacity will reach over 26 GW within five years.Operators also participate in governments’ efforts for sustainable energy adoption by using renewable energy, signing power purchase agreements (PPAs), or setting targets for carbon-free operations. For instance, in June 2022, NTT Global Data Centers signed a new solar energy PPA of 70 MW with Clean Energy Connect. The energy company will develop solar power plants across 700 locations in the country by 2023.MARKET TRENDS

Increased Digitalization

Digitalization is a major agenda of governments across all countries, such as Malaysia, Thailand, India, Australia, Japan, South Korea, China, New Zealand, and others. Several governments plan digital strategies to strengthen the digital growth of their countries. For instance, the Government of Australia launched its Digital Economy Strategy 2022 Update to develop the digital economy of Australia by 2030.

Rise in M&As & JVs

The significant growth potential and revenue-generating opportunities in the APAC data center construction market prompt operators to continuously invest in M&As and engage in JVs for data center projects. Several global organizations enter the industry through JVs. For instance, STACK Infrastructure entered the South Korean industry through a JV with ESR Cayman to develop a data center.

SEGMENTATION INSIGHTSThe development of colocation data centers dominates the data center construction market in APAC in terms of the number of investments. Several new entrants entered the APAC data center colocation market for the development of colocation facilities. Hyperscale data center operators also increase their market presence with investments in cloud regions. In 2022, some countries, such as Indonesia, Australia, and Myanmar, also witnessed investments in enterprise data centers.The APAC data center colocation market has strong growth potential in electrical infrastructure due to the high demand for lithium-ion and nickel-zinc batteries used in UPS systems. Operators can also adopt new-age generator sets that run on hydrotreated vegetable oil (HVO), natural gas, etc.There is a market demand for air- and water-based cooling solutions in terms of cooling infrastructure. Operators, especially in Southeast Asia, are more inclined toward adopting water-based cooling solutions due to the tropical climate. The APAC data center colocation market has opportunities for rack infrastructure vendors with the growth in the adoption of racks of 42U to 52U in height. Some countries in the region also adopt racks below 42U height.Segmentation by Colocation ServiceRetail ColocationWholesale ColocationSegmentation by InfrastructureElectrical InfrastructureMechanical InfrastructureGeneral ConstructionSegmentation by Electrical InfrastructureUPS SystemsGeneratorsTransfer Switches & SwitchgearPower Distribution UnitsOther Electrical InfrastructureSegmentation by Mechanical InfrastructureCooling SystemsRacksOther Mechanical InfrastructureSegmentation by Cooling SystemsCRAC & CRAH UnitsChiller UnitsCooling Towers, Condensers & Dry CoolersEconomizers & Evaporative CoolersOther Cooling UnitsSegmentation by Cooling TechniqueAir-based Cooling TechniqueLiquid-based Cooling TechniqueSegmentation by General ConstructionCore & Shell DevelopmentInstallation & Commissioning ServicesEngineering & Building DesignFire Detection & SuppressionPhysical SecurityDCIM/BMS SolutionsSegmentation by Tier StandardTier I & IITier IIITier IVGEOGRAPHICAL ANALYSISChina dominates the regional industry in terms of data center development. India, Australia, Japan, Singapore, and Hong Kong are among the other major markets with high data center development activities in APAC.South Korea, Taiwan, Indonesia, and Malaysia are emerging markets that witness significant growth due to digitalization and growth in connectivity. The Philippines, New Zealand, and Vietnam witness new investments from operators and are expected to be preferable destinations for data center development during the forecast period.Segmentation by GeographyAPACChinaHong KongAustraliaNew ZealandIndiaJapanTaiwanSouth KoreaRest of APACSoutheast AsiaSingaporeMalaysiaThailandIndonesiaPhilippinesVietnamOther Southeast Asian CountriesVENDOR ANALYSISThe APAC data center colocation market grew significantly over the last five years with investments from several local and global operators.Investors in APAC adopt various sustainable designs to ensure that the facility operates at a PUE of less than 1.4, which was not achievable by the operational data center built before 2017. The sustainable data center design practices followed in recent times are complimented by innovative air-based cooling solutions, efficient power technologies, and sustainable construction practices.The development of hyperscale data center campuses in APAC will bring in a significant revenue opportunity for vendors that offer the fastest-growing technologies, such as liquid immersion cooling, direct-to-chip cooling, lithium-ion UPS, HVO generators, microgrid technologies, renewable power solutions, and net-zero water data centers.Data Center InvestorsAirTrunk OperatingDigital RealtyEquinixGDS ServicesKeppel Data CentersNTT Global Data CentersNEXTDCST Telemedia Global Data CentersOther Prominent Data Center InvestorsBridge Data CentresBig Data Exchange (BDx)CDC Data CentresChayoraChindata GroupColt Data Centre ServicesCtrlS DatacentersDigital Edge DCIron MountainLG UplusNxtra by AirtelOneAsia NetworkOpen DCPi DatacentersPrinceton Digital GroupRegal OrionSpaceDCSUNeVison Holdings (iAdvantage)Sify TechnologiesTenglong Holding GroupViettel IDCVNETYotta Infrastructure SolutionsNew EntrantsAdaniConneXData Center FirstEdge CentresEdgeConneX (EQT Infrastructure)Evolution Data CentresHickoryMettaDCNautilus Data TechnologiesPure Data Centres GroupVantage Data CentersYCO CloudYTL Data CenterYondrKEY QUESTIONS ANSWERED:

1. How big is the APAC data center colocation market?

2. What is the growth rate of the APAC data center colocation market?

3. What is the estimated market size in terms of area in the APAC data center colocation market by 2028?

4. What are the key trends in the APAC data center colocation market?

5. How many MW of power capacity is expected to reach the APAC data center colocation market by 2028?