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

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

The APAC data center construction market is expected to grow at a CAGR of 8.07% from 2022 to 2028.

The region's market is among the majorly growing markets across the globe, led by factors such as governments across countries supporting data centers, development of multiple industrial zones, rapid growth in submarine cable connectivity, significant investments from cloud service providers, entry of global colocation operators in the region in joint ventures and other factors.

The growing potential of the market has led data center operators to show interest in some other emerging markets in the region, such as the Philippines, Vietnam, New Zealand, and others. Data center operators in the region are also participating in the government's efforts for sustainable energy adoption by using renewable energy, signing power purchase agreements, or setting targets for carbon-free operations. For instance, in August 2022, Microsoft announced a partnership with Ecotricity to power its data center region in New Zealand with 100% renewable energy.

KEY HIGHLIGHTSThe deployment of 5G service and the growing demand for connectivity in new locations and tier 1 and tier 2 cities across multiple countries has significantly attracted investments from edge data center operators. For instance, edge operators such as EdgeConneX, Digital Edge, Leading Edge Data Centres, and Edge Centres are actively investing in establishing multiple edge data centers across countries such as Indonesia, Australia, Malaysia, Philippines, Thailand, India, Vietnam, Thailand, and others.The region has witnessed a growing interest by governments and operators in renewable energy. Almost all governments across all countries have taken up initiatives to promote the adoption of renewable energy sources. For instance, Taiwan aims to generate 20% of its electricity through renewable energy by 2025 via wind and solar PV promotion plans. Renewable power capacity is expected to reach over 26 GW within the next five years in Taiwan.The APAC data center construction market has been growing significantly in terms of connectivity owing to the deployment of several upcoming submarine cables such as Asia Link Cable, SEA-H2X, Asia Connect Cable-1, Hawaiki Nui, 2Africa, and others.KEY TRENDS

Growing Digitalization in the Region

Digitalization has been growing as a major agenda by governments across all countries, such as Malaysia, Thailand, India, Australia, Japan, South Korea, China, New Zealand, and others. Several Governments are announcing their digital strategies to strengthen the digital growth of respective markets. For instance, the Government of Australia has launched its Digital Economy Strategy 2022 Update with the aim for the development of the digital economy of Australia by 2030.

Growing Mergers & Acquisitions and Joint Ventures

The significant growth potential and revenue-generating opportunities in the APAC data center construction market are prompting operators to continuously invest in merger & acquisition deals and sign joint ventures for data center projects. Several global organizations are entering the market through joint ventures. For instance, STACK Infrastructure entered the South Korean market in a joint venture with ESR Cayman to develop a data center.

SEGMENTATION INSIGHTSThe development of colocation data centers dominates the APAC data center construction market in terms of the number of investments. Several new entrants are entering the market for the development of colocation data centers, and hyperscale operators are also increasing their market presence with investment in cloud regions. Some countries, such as Indonesia, Australia, and Myanmar, also witnessed investments in enterprise data centers in 2022.Regarding electrical infrastructure, the APAC data center construction market has strong growth potential for lithium-ion and nickel-zinc batteries for UPS systems. Operators can also adopt new-age generator sets that run on fuel types such as hydrotreated vegetable oil (HVO), natural gas, and others.The APAC data center construction market has adopted air- and water-based cooling solutions in terms of cooling infrastructure. Especially in Southeast Asia, operators are more tilted towards adopting water-based cooling solutions due to the tropical climate. Also, the market has an opportunity for rack infrastructure vendors with the growing adoption of racks between the height range 42U to 52U. Some locations also witness the adoption of racks below 42U height.The report includes the investment in the following areas: Facility TypeColocationHyperscaleEnterprise Data CentersInfrastructureElectrical InfrastructureMechanical InfrastructureGeneral ConstructionElectrical InfrastructureUninterruptible Power Supply (UPS) SystemsGeneratorsPower Distribution UnitsTransfer Switches & SwitchgearOther Electrical InfrastructureMechanical InfrastructureCooling SystemsRacksOther Mechanical InfrastructureCooling SystemsCRAC & CRAH UnitsChiller UnitsCooling Towers, Condensers & Dry CoolersOther Cooling UnitsCooling TechniqueAir-based Cooling TechniquesLiquid-based Cooling TechniquesGeneral ConstructionCore & Shell DevelopmentInstallation & Commissioning ServicesEngineering & Building DesignFire Detection & SuppressionPhysical SecurityData Center Infrastructure Management (DCIM)/Building Management Systems (BMS)Tier StandardsTier I & IITier IIITier IVGEOGRAPHICAL ANALYSISChina has been dominating the APAC data center construction market in the region. Followed by markets such as India, Australia, Japan, India, Singapore, and Hong Kong, among the other major markets for facilities development in APAC.The market for data center development in Hong Kong is also aided by growing demand for data storage in Hong Kong due to The Personal Data Ordinance that mandates organizations to store data within Hong Kong borders.High levels of digitalization in New Zealand, especially with 5G coming into play, will contribute to a surge in data generation and generate data traffic and storage and computation requirements, which will lead to a rise in demand for data centers in the country. Several cloud service providers will likely develop cloud regions to increase their reach in the country.Other markets such as South Korea, Taiwan, Indonesia, and Malaysia are also emerging markets, witnessing significant growth, especially as a result of digitalization and growth in connectivity. Countries such as the Philippines, New Zealand, and Vietnam have started witnessing new investments and are expected to grow as unique preferences from data center operators.In Southeast Asia, Singapore has been a major shareholder in the overall investments in the APAC data center construction market. Although, due to the moratorium, the investments slowed down but are expected to slowly gain pace in the coming 2-3 years with the expected increase in project announcements after lifting the moratorium in 2022.GeographyChinaHong KongAustraliaNew ZealandJapanIndiaSouth KoreaTaiwanRest of APACSoutheast AsiaSingaporeIndonesiaMalaysiaThailandPhilippinesVietnamOther Southeast Asian CountriesVENDOR LANDSCAPEThe APAC data center construction market has the presence of several global and local construction contractors. AECOM, Arup, Aurecon, CSF Group, DSCO Group, Gammon Construction, Larsen & Toubro, NTT Facilities Group, PM Group, Powerware Systems, Red Engineering, DPR Construction, ISG, Kienta Engineering, Rider Levett Bucknall, Turner & Townsend and others are offering their services for data center development in the region.The APAC data center construction market, in terms of support infrastructure vendors, has several global vendors. ABB, Airedale, Caterpillar, Cummins, Delta Electronics, Eaton, HITEC Power Protection, Airedale, Trane, Siemens, KOHLER Power, Legrand, Piller Power Systems, Rolls-Royce, Rittal, STULZ, Green Revolution Cooling, Mitsubishi Electric, Schneider Electric, Vertiv, and others are offering traditional as well as innovating data center solutions in the industry.The market has been growing with a strong presence of several local and global colocation and cloud operators such as AirTrunk, Digital Realty, Equinix, GDS Services, Keppel Data Centres, NTT Global Data Centers, NEXTDC, BDx, Chayora, Chindata Group, Princeton Digital Group, SpaceDC, and others.The growing opportunities and demand in the industry have also attracted several new entrants, including AdaniConneX, Evolution Data Centres, Data Center First, MettaDC, Hickory, Vantage Data Centers, YCO Cloud, and Yondr.Initiatives such as Open Compute Project are expected to bring several new cooling techniques and technologies to the market, thereby creating more competition among vendors. Operators also look for vendors providing systems with real-time monitoring and management solutions.Major Vendors

Key Construction ContractorsAECOMArupAurecon GroupCSF GroupDSCO GroupGammon ConstructionLarsen & Toubro (L&T)NTT FacilitiesPM GroupStudio One DesignOther Prominent Construction ContractorsAWP ArchitectsBYME EngineeringChung Hing Engineers GroupCorganCTCIDPR ConstructionFaithful+GouldFortis ConstructionHutchinson BuildersISGKienta Engineering ConstructionLinesightLSK EngineeringM+W GroupNakano CorporationObayashi CorporationPowerware Systems (PWS)Sato KogyoSterling and WilsonRed EngineeringRider Levett BucknallTurner & TownsendProminent Support Infrastructure VendorsABBCaterpillarCumminsEatonRittalSchneider ElectricSTULZVertivOther Prominent Support Infrastructure VendorsAiredaleAlfa LavalCanovateCyber Power SystemsDelta ElectronicsEAEFuji ElectricGreen Revolution Cooling (GRC)HITEC Power ProtectionKOHLER PowerLegrandMitsubishi ElectricNaradaPiller Power SystemsRolls-RoyceShenzhen Envicool TechnologySiemensSocomecTraneProminent Data Center InvestorsAirTrunkAmazon Web Services (AWS)Digital RealtyEquinixGDS ServicesKeppel Data CentresNTT Global Data CentersNEXTDCST Telemedia Global Data CentresOther Prominent Data Center InvestorsBridge Data CentresBig Data Exchange (BDx)CDC Data CentresChayoraChindata GroupColt Data Centre ServicesCtrlS DatacentersDigital Edge DCFacebook (Meta)GoogleHuawei TechnologiesIron MountainLG UplusMicrosoftNxtra by AirtelOneAsia NetworkOpen DCPi DatacentersPrinceton Digital Group (PDG)Regal OrionSpaceDCSUNeVison Holdings (iAdvantage)Sify TechnologiesTenglong Holding GroupViettel IDCVNETYotta Infrastructure SolutionsNew EntrantsAdaniConneXData Center FirstEdge CentresEdgeConneXEvolution Data CentresHickoryMettaDCNautilus Data TechnologiesPure Data Centres GroupVantage Data CentersYCO CloudYTL Data CenterYondrKEY QUESTIONS ANSWEREDHow big is the APAC data center construction market?What factors drive the growth in the APAC data center construction market?What is the growth rate of the APAC data center construction market?What is the estimated market size in terms of area in the APAC data center construction market by 2028?Who are the key construction contractors in the APAC data center construction market?How many MW of power capacity is expected to reach the APAC data center construction market by 2028?