APAC Data Center Market Growth Insights – Market Area to Reach 32.57 Million Sq. Ft. and Power Capacity to Surpass 8,343 MW by 2031, Rising Demand for Advanced Digital Infrastructure Across Asia-Pacific (2026–2031)

APAC Data Center Market Landscape 2026-2031

APAC DATA CENTER MARKET SIZE & INSIGHTS

The APAC data center market size witnessed investments of USD 126.64 billion in 2025 and will witness investments of USD 255.49 billion by 2031, growing at a CAGR of 12.41% during the forecast period. In the APAC region, the well-established countries like China, Japan, Australia, and India are some of the primary data center markets that are significantly witnessing digital transformation and technological advancements. On the other hand, the developing and emerging countries, like Indonesia, Malaysia, Hong Kong, South Korea, Taiwan, Singapore, and Thailand, are providing data center firms with a wide range of tax incentives to attract data center investments, and the governments across these nations are making substantial efforts to strengthen digital infrastructure across these countries. In the APAC data center market, China continues to dominate the market in terms of data center investments, and the nation contributed approximately 47.92% of the APAC data center market's investment share in 2025.

Additionally, the mature markets like Australia, Japan, India, Malaysia, and others are increasingly strengthening their positions for the development of advanced data centers to address the increasing demands for data center infrastructure across the APAC region, attracting investments from both local and global data center operators. Moreover, the niche markets, such as Bangladesh, Bhutan, Brunei, Cambodia, Laos, Myanmar, Nepal, Pakistan, Sri Lanka, and other countries, are at the very early stages in terms of data center development, and these countries have been witnessing data center investments from the enterprise organizations as well as domestic telecom operators, which are investing to develop data centers with a power capacity of less than 10 MW across these countries.

The APAC data center market is growing significantly, driven by various growth factors, including, the rise in adoption of artificial intelligence, increasing government support for data centers, the surge in demand for emerging technologies like robotics, machine learning, big data & the Internet of Things, increasing adoption of sustainability initiatives among data center and cloud companies, rising adoption of liquid cooling technologies in data center facilities, rapid surge in digitalization, increasing adoption of cloud-computing technologies, development of smart city projects, and others.

APAC DATA CENTER MARKET SEGMENTATION INSIGHTS

1. The demand for liquid cooling techniques is anticipated to rise rapidly among the data centers in the APAC region during the forecast period. In 2025, liquid cooling technologies accounted for approximately 55.2% of the cooling technique investments in the APAC data center market, and this share is anticipated to increase to around 59% of the cooling technique investments in 2031, owing to the rising demand for processing advanced Artificial Intelligence and high-performance computing workloads. Several data center firms are increasingly prioritizing the adoption of advanced liquid cooling techniques, such as immersion and direct-to-chip cooling, to improve thermal management.
2. Data center companies across the APAC region are making significant investments in AI-ready facilities equipped with GPU clusters, advanced liquid cooling systems, high-density racks, and greater IT power capacity. For example, in January 2026, APAC-based data center operator Digital Edge DC announced plans to develop an AI-focused data center in Jakarta, Indonesia, with an investment of around $4.5 billion. Investment in AI-ready data centers is expected to continue growing across APAC during the forecast period as demand for AI infrastructure is rising continuously.
3. In the APAC region, the colocation companies account for the majority of the data center investments. For instance, in 2025, approximately 78.48% of the data center investments were generated by colocation service providers in the APAC region. In October 2025, the colocation company Equinix revealed that the company had completed the structural build-out of its JH2 data center facility in Johor, Malaysia, with an investment of over $201 million.
4. As the need for sustainable data center infrastructure continues to grow, operators are preferring to invest in low-carbon power and cooling technologies. Many companies are adopting solutions such as lithium-ion batteries, Hydrotreated Vegetable Oil (HVO)-powered generators, and advanced power distribution systems to improve energy efficiency and reduce emissions. For instance, Microsoft has installed renewable biofuel-powered backup generators at its data center in South Korea to help lower its carbon footprint.
5. Many data center companies are focusing on deploying high-density racks in their facilities to support complex Artificial Intelligence workloads. For example, DC Connect planned to install high-density racks in its Seoul1 data center in South Korea, with rack densities ranging from 60 kW to 200 kW to address the increasing requirements for processing artificial intelligence workloads.
6. Data center operators are increasingly investing in DCIM and BMS software to improve energy efficiency, reduce carbon emissions, and lower operating costs. These systems help companies to simplify data center management through better monitoring and automation, reducing the need for manual operations. For example, Open DC has implemented a 24/7 BMS monitoring system at its JB1 data center in Johor, Malaysia.
7. The local and global hyperscalers have been investing in the development of large-scale hyperscale data center campuses across the APAC region. In 2025, the hyperscale data center investments increased by over 15.70% in the APAC data center market, compared to 2024. In December 2025, the hyperscale giant, Amazon Web Services, partnered with Telangana's government to boost cloud and data center infrastructure in India, with an investment of approximately $7 billion.
8. In the APAC data center market, the requirement for advanced security systems is expected to grow significantly during the forecast period to protect facilities from physical security threats. Data center operators are increasingly deploying technologies such as biometric access controls, card readers, CCTV surveillance systems, perimeter fencing, and other security solutions to enhance safety and protection in their facilities.

APAC DATA CENTER MARKET KEY TRENDS & DRIVERS

Rising Digitalization Fuelling Data Center Growth

1. The nations across the APAC region are experiencing rapid digital transformation, which is boosting their digital economies and increasing the need for data center infrastructure. The rising adoption of cloud computing, e-commerce, fintech, artificial intelligence, and other digital services is generating larger volumes of data that require storage and processing. Therefore, the demand for high-performance, low-latency data centers is rising significantly across the APAC region.
2. In October 2025, New Zealand's government revealed that the country could save around $2.2 billion over the next five years by focusing on digitalization and promoting the adoption of advanced digital technologies among enterprises across various sectors to boost their productivity and operational efficiency.
3. As enterprises across a wide range of industries continue to rely on digital services, the need for real-time data processing is expected to grow significantly. This will increase the demand for data centers across the APAC region to store, process, and manage large volumes of data required to support a wide range of digital applications and services.

Artificial Intelligence Aiding Data Center Investments

1. The adoption of artificial intelligence is growing rapidly across the APAC region, driven by ongoing technological advancements and an increasing focus on technological innovation. Artificial intelligence is playing an important role in supporting digital transformation across various industries. Businesses are increasingly relying on artificial intelligence to improve operational efficiency, automate processes, and enhance business performance.
2. In November 2025, the government of Taiwan revealed that it had allocated over $3.2 million to strengthen artificial intelligence infrastructure in Taiwan and to position the country as one of the global AI leaders by 2040. Additionally, this initiative focuses on three main technologies, namely, photonics, quantum computing, and AI robotics.
3. Artificial intelligence workloads generate large volumes of data that require multiple high-performance servers for processing. These servers produce significant amounts of heat and require reliable power and higher rack densities to operate efficiently. As the adoption of artificial intelligence continues to grow, the demand for liquid cooling solutions is expected to increase, as they help data center facilities to dissipate heat effectively.

The Surge in Adoption of Liquid Cooling Technologies in Data Centers

1. APAC is one of the leading regions in the adoption of advanced technologies such as Artificial Intelligence, Big Data, and the Internet of Things (IoT). Governments across the region are introducing various initiatives to support the development of these emerging technologies and strengthen the digital economy. Therefore, the demand for Artificial Intelligence (AI)-optimized data centers is growing rapidly across APAC countries. These facilities require advanced cooling solutions, such as direct-to-chip liquid cooling and immersion cooling, to efficiently manage the high heat generated by AI workloads.
2. In October 2025, BW Digital, the digital infrastructure services provider, announced the completion of the structural framework at its NDP1 data center in Batam. The data center is anticipated to be equipped with a direct liquid cooling technique.
3. The adoption of liquid cooling in APAC data centers is still at an early stage. However, the growing use of emerging technologies such as Artificial Intelligence and high-performance computing is expected to increase the demand for liquid cooling solutions during the forecast period. These technologies generate large amounts of heat, increasing the demand for advanced cooling technologies.

Government Initiatives Driving Data Center Investments

1. Governments across the APAC nations are supporting the growth of data centers through various initiatives, including investments in AI infrastructure, providing financial support and tax incentives to data center operators, and the governments are also introducing various regulations to strengthen digital infrastructure across the APAC countries.
2. In October 2025, Lee Jae Myung, South Korea's president, signed an agreement with Sam Altman, OpenAI’s CEO, to develop two new data centers in South Korea to address the rising demand for Artificial Intelligence services in the country.
3. Through sustainability programs, financial incentives, and policy support, governments across the APAC countries are making substantial efforts to position APAC as one of the key destinations for data center development and long-term digital infrastructure growth. As data centers continue to play an important role in supporting the digital economy, government support for data centers is likely to increase further during the forecast period.

Increasing Adoption of Cloud Computing Technologies

1. The demand for cloud computing services is growing rapidly across APAC countries, creating new opportunities for cloud service providers. The cloud computing demand is driven by increasing digitalization, the expansion of 5G connectivity, and data regulations that encourage local data storage and processing.
2. In July 2025, Oracle revealed that the company had launched its first cloud region, namely the North (Batam) cloud region in Indonesia, with one availability zone, and the company is expected to lease space in the data center operated by DayOne in Batam.
3. The growing adoption of cloud computing services across the APAC region is expected to increase the demand for data center infrastructure. Cloud providers require scalable and low-latency data centers to host their workloads, to support the expanding digital ecosystem, and to meet increasing data sovereignty requirements across the region.

Advancements in Big Data, Internet of Things (IoT), and Smart City Projects

1. Advanced technologies such as Big Data and the Internet of Things (IoT) are becoming important for businesses to collect, process, and manage large volumes of data. IoT helps organizations to improve data management, scalable storage, and real-time analytics. The growing adoption of Big Data and IoT is expected to support digital transformation across APAC countries.
2. According to the IMD Smart City Index 2025, Osaka and Tokyo ranked 99th and 108th globally, respectively. These rankings have been achieved through factors such as digital infrastructure, technological development, and quality of life in the two cities. Through the Society 5.0 initiative, Japan aims to build a super-smart society by using digital technologies to improve daily life and address social challenges through innovation.
3. The growing adoption of emerging technologies such as Big Data and the Internet of Things (IoT), along with smart city developments, is expected to drive the demand for edge data centers across the APAC region during the forecast period. These facilities help to process and store data closer to end users, enabling faster data access and lower latency.

Surge in Submarine Cable Connectivity Fuels Data Center Growth

1. The expansion of submarine cables and inland fiber networks is strengthening digital infrastructure across APAC countries and increasing the demand for data centers. Submarine cables carry around 95% of global data traffic and enable high-capacity, low-latency data transmission between countries and regions. As the investments in new transoceanic cable routes continue to grow, the demand for cable landing stations, edge data centers, and digital infrastructure is expected to increase significantly across the APAC region.
2. In November 2025, Google announced plans to develop the TalayLink submarine cable, which is expected to improve digital connectivity and enhance data transmission speeds between Melbourne and Perth in Australia and Thailand.
3. Growing investments in submarine cables and inland connectivity are expected to strengthen APAC’s digital connectivity with Europe, the Middle East, and the Americas. These developments will help to increase international bandwidth capacity, improve network reliability, and support the region’s position as one of the major global digital hubs.

Increasing Joint Ventures in the Market

1. As demand for digital infrastructure is continuously growing across the APAC countries, digital infrastructure providers are increasingly collaborating through partnerships and joint ventures with AI companies, real estate developers, investment firms, energy providers, and other organizations. These collaborations aim to support the expansion and development of digital infrastructure across the region.
2. In October 2025, AI infrastructure provider OpenAI partnered with a Japanese manufacturing company, Hitachi Energy, to supply electrical infrastructure equipment for the development of an AI-ready data center in South Korea.
3. The number of joint ventures and strategic partnerships among digital infrastructure providers across APAC is expected to grow further during the forecast period. These collaborations will help digital infrastructure providers to address the rising demand for data center infrastructure and to support the region in continuously expanding its digital economy.

Adoption of Sustainability Measures Among Data Center Operators

1. Sustainability initiatives are becoming one of the most important factors in driving data center investments across the APAC region. Data center operators are increasingly focusing on reducing their environmental impact and lowering greenhouse gas emissions. Many companies have also established carbon neutrality and net-zero emission targets as part of their sustainability efforts.
2. In April 2025, AirTrunk partnered with JSW to launch a recycled water initiative, which will help AirTrunk to improve water management at its JHB1 and JHB2 data center campuses in Malaysia. This initiative will recycle the wastewater in data centers and supply it to residents.
3. Data center operators are increasingly adopting sustainable technologies such as liquid cooling, free cooling systems, renewable energy, and waste heat recovery to reduce their environmental impact. The adoption of environmentally friendly practices is expected to grow significantly across APAC over the next five years, as data center operators continue to strengthen their sustainability.

APAC DATA CENTER MARKET GEOGRAPHICAL ANALYSIS

1. In 2025, China led the APAC data center market in terms of power capacity, accounting for a power capacity share of over 53%, followed by Southeast Asia, which accounted for a power capacity share of around 16.65% during the same period. This dominance is anticipated to continue over the next five years, with China expected to contribute approximately 52.98% of the APAC data center market’s power capacity in 2031, followed by South Asia, which is likely to account for around 17.20% of the APAC data center market's power capacity share during the same period.
2. Due to increasing challenges related to land availability and power capacity in major APAC data center hubs, operators are increasingly exploring emerging and secondary markets for new developments. Countries such as Malaysia, Indonesia, New Zealand, Taiwan, and India have seen strong growth in data center investments in recent years. However, the established markets like Singapore, Tokyo, Osaka, Sydney, and Hong Kong face growing land and power constraints; locations such as Jakarta, Cyberjaya, Johor, Auckland, and Canberra are attracting data center investments significantly.
3. The nations across the APAC region are making significant strides to reduce their environmental impact and lower carbon emissions. For example, Japan has set a goal of achieving carbon neutrality by 2050 and aims to significantly reduce its carbon emissions by 2040. Similarly, New Zealand is targeting net-zero greenhouse gas emissions by 2050 as part of its long-term sustainability strategy.
4. In 2025, Indonesia contributed around 17.92% of the Southeast Asia data center market’s data center investments, and the country accounted for approximately 2.22% of the data center investments in the APAC data center market during the same period.
5. Hong Kong acts as an important gateway to China due to its strategic location and strong digital connectivity with mainland China. Hong Kong is expected to generate approximately 2.82% of the overall investments in the APAC data center market in 2025.
6. Data center construction costs vary widely across APAC countries due to differences in land prices, labour costs, power infrastructure, and regulatory requirements. Markets such as Japan and Singapore are among the most expensive locations for data center development, with construction costs of $15 per watt as of December 2025. In contrast, countries including China, India, South Korea, Indonesia, and Malaysia generally offer lower construction costs, making them attractive destinations for new data center investments.
7. Japan contributed approximately 10.08% of the data center investments in the APAC data center market in 2025. Growing government support for the data center sector and the rising adoption of Artificial Intelligence are driving data center investments in Japan’s data center market. To strengthen the country's Artificial Intelligence capabilities, the Japanese government planned to invest around $65 billion in driving the nation's Artificial Intelligence infrastructure by 2030.
8. The rapid growth of Artificial Intelligence (AI) usage in China is creating strong demand for data center infrastructure across the country. AI is being adopted by businesses and individuals for a wide range of applications, increasing the need for higher computing power and data processing capacity. To support this growth, China is actively promoting AI development and adoption through various national initiatives. As the adoption of artificial intelligence continues to expand over the upcoming years, investment in data centers is expected to increase significantly to address the growing demand for digital infrastructure.
9. The government of Taiwan is actively supporting industrial and technology development through the establishment of several technology and industrial parks across the country. Major industrial parks in Taiwan include Nangang Software Park, Neihu Technology Park, Yunlin Technology-Based Industrial Park, and others that attract technology investments and support business growth in the country.

APAC DATA CENTER MARKET VENDOR LANDSCAPE

1. The APAC data center market includes a wide range of local and international support infrastructure providers. Companies such as Schneider Electric, Vertiv, ABB, Siemens, Eaton, Caterpillar, Cummins, Delta Electronics, STULZ, Rittal, Alfa Laval, Carrier, Legrand, Mitsubishi Electric, Hitachi Energy, Honeywell, ENGIE, Rolls-Royce, Baudouin, Aksa Power Generation, Fuji Electric, HITEC Power Protection, Rehlko, Airedale, Cyber Power Systems, and others supply essential power, general, and cooling infrastructure solutions for data center facilities across the region.
2. The APAC data center market is expected to attract several new companies as demand for digital infrastructure is growing continuously across the region. New entrants such as CloudHQ, DAMAC Digital, BW DIGITAL, Evolution Data Centres, GreenSquareDC, Asia Pacific Land (APL), Aslan Energy Capital, Datagrid New Zealand, FIR HILLS, Kakao Corp, KOSCOM, Nautilus Data Technologies, Megaspeed AI, OKESTRO, Saigontel, SC Zeus Data Centers, THOMSON Computing - METAVISIO, Trifalga, ZDATA Group, Haoyang Data, and i-Berhad are expanding their presence and investing in new data center projects across APAC.
3. Many global and regional hyperscale firms are making significant investments to expand hyperscale data center infrastructure across the APAC region. Leading hyperscale operators such as Amazon Web Services, Microsoft, Google, Alibaba Group, Meta, and Apple are increasingly investing to expand their presence in APAC by developing new data centers and expanding existing data center infrastructure to support growing cloud and digital services.
4. The IT infrastructure providers like Arista Networks, Atos, Broadcom, Cisco, Dell Technologies, Extreme Networks, Fujitsu, Hewlett Packard Enterprise, Hitachi Vantara, Huawei Technologies, IBM, Inspur Group, Intel, Lenovo, Micron Technology, NEX Corporation, NetApp, Oracle, Everpure, Quanta Cloud Computing, QNAP Systems, Quantum, Seagate Technology, Supermicro, Toshiba, Western Digital, Wiwynn, and NVIDIA deliver advanced servers, GPUs, high-capacity storage, and networking infrastructure to install in data centers across the APAC nations.
5. The colocation providers represent the largest APAC data center market share of data center investments. Major companies operating in the APAC data center market include AirTrunk, Equinix, Digital Realty, NTT DATA, NEXTDC, ST Telemedia Global Data Centres, Princeton Digital Group, GDS Holdings, BDx Data Centers, China Mobile International, China Telecom Corporation, China Unicom, AdaniConneX, CtrlS Datacenters, Nxtra by Airtel, Sify Technologies, Vantage Data Centers, STACK Infrastructure, Yondr Group, EdgeConneX, Colt Data Centre Services, Telehouse, CapitaLand, LG CNS, LG Uplus, Chunghwa Telecom, Pure Data Centres Group, BRIGHTRAY, CDC, Anant Raj Cloud Data Center, and several other operators. These companies have been investing continuously in the development of new facilities and capacity expansion to address the growing demand for digital infrastructure across the region.
6. The APAC data center market is supported by numerous construction, engineering, and consulting firms. Companies such as AECOM, Arup, AtkinsRéalis, Larsen & Toubro, DPR Construction, Fortis Construction, Beca, Ramboll, Turner & Townsend, RED Engineering Design, Corgan, HDR, Gammon Construction, Hyundai Engineering & Construction, NTT Facilities, Sterling and Wilson, Linesight, Heerim Architects & Planners, Megawide Construction Corporation, PT Jaya Karya Integrasi (JKI), Kienta Engineering Construction, JSLA Architects, DSCO Group, China Electronics Engineering Design Institute, Icon Construction, and others provide services including design, engineering, construction, installation, testing, and commissioning for data center projects across the APAC region.