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THE SOUTHEAST ASIA DATA CENTER MARKET SIZE WAS VALUED AT USD 7 BILLION IN 2020 AND IS EXPECTED TO CROSS USD 11 BILLION BY 2026, GROWING AT A CAGR OF 8% DURING THE FORECAST PERIOD

Southeast Asia Data Center Market Size, Share, Trends Analysis Report by IT Infrastructure (Servers, Storage, and Network); Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructures); Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Dry Coolers, & Condensers, and Other Cooling Units), Racks, and Other Mechanical Infrastructure); Cooling Technique (Air-based Cooling and Liquid-based Cooling); General Construction (Core and Shell Development, Installation and Commissioning Services, Engineering and Building Designs, Physical Security, and DCIM/BMS); Tier Standards (Tier I & II, Tier III, and Tier IV); and Geography (Singapore, Malaysia, Thailand, Indonesia, Philippines, Vietnam, Cambodia, and Myanmar); Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast 2021–2026

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Most Exhaustive Report

301 Pages

32 Tables

97 Charts

1 Regions

7 Countries

60 Companies

6 Market Segment

SOUTHEAST ASIA DATA CENTER MARKET REPORT SCOPE

Report Attribute Details
MARKET SIZE (INVESTMENT) USD 11 BILLION (2026)
MARKET SIZE (AREA) 1.6 MILLION SQUARE FEET (2026)
CAGR 8% (2021-2026)
Base Year 2020
Forecast Year 2021–2026
Market Segments IT Infrastructure (Servers, Storage, and Network); Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructures); Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Dry Coolers, & Condensers, and Other Cooling Units), Racks, and Other Mechanical Infrastructure); Cooling Technique (Air-based Cooling and Liquid-based Cooling); General Construction (Core and Shell Development, Installation and Commissioning Services, Engineering and Building Designs, Physical Security, and DCIM/BMS); Tier Standards (Tier I & II, Tier III, and Tier IV)
Countries Covered Singapore, Malaysia, Thailand, Indonesia, Vietnam, Philippines, Cambodia & Myanmar

SOUTHEAST ASIA DATA CENTER INDUSTRY INSIGHTS

The Southeast Asia data center market size was valued at 7.15 billion in 2020 and is expected to reach USD 11 billion by 2026, growing at a CAGR of 8% during the forecast period. The data center market in Southeast Asia is growing significantly, with multiple investments in Singapore, Indonesia, Malaysia, Vietnam, Cambodia, and Thailand. Southeast Asia is among the fastest-growing digital markets worldwide. The internet usage and social media trends have increased the demand for faster internet networks and data centers to store data generated by them. The internet penetration is one of the strongest drivers for the data center market in Southeast Asia. Moreover, social media usage among consumers and digital transformation by enterprises across industry verticals are other major factors promoting data center growth. The investments are growing significantly across Singapore, Indonesia, Malaysia, Vietnam, Cambodia, and Thailand. In 2020, Equinix, Digital Realty, NTT Global Data Centers, Space DC & GIC, ST Telemedia Global Data Centres, DTP, and DCI Indonesia were major investors in the Southeast Asia data center market. In December 2020, Equinix announced the development of its fifth facility in Singapore, which expects to be operational in Q2 2021. Facebook is constructing its first self-built hyperscale data centers in Singapore, which is likely to be functional in 2022. Indonesia witnessed investments from colocation and cloud-based hyperscale providers. In 2020, Microsoft Azure announced the opening of its first cloud region in Indonesia by the end of 2021. Similarly, AWS announced their plans to open their facilities in Indonesia by the end of 2021. Malaysia also received investment from data center service providers. Bridge Data Centres is developing its third facility in the country, which expects to be functional by 2022. 

SNIPPETS

  • Increased government support for data center development, reducing electricity tariff, and the high availability of reliable power and renewable energy are expected to drive the data center market in Southeast Asia during the forecast period.
  • Investments in submarine cable projects and improvement in in-land connectivity will reduce latency-related challenges, thereby boosting the market growth.
  • Increased investments from hyperscale operators expect to contribute to the Southeast Asia data center market growth. The establishment of the cloud region in Indonesia by Google and Alibaba will be followed by Microsoft and AWS soon.
  • Around $1.7 billion will be the cumulative investments on core & shell data center development across Southeast Asia during 2021-2026.
  • The adoption of 2N backup power infrastructure expects to increase due to power reliability challenges in the region.
  • The adoption of DRUPS systems is high in data centers in the region, thereby increasing revenue opportunities for DRUPS vendors.
  • The adoption of energy-efficient cooling systems is likely to grow due to the high demand to reduce cooling units' energy consumption and operate facilities at a PUE of less than 1.5.

SOUTHEAST ASIA DATA CENTER MARKET SEGMENTATION

This research report includes a detailed segmentation by:

  • IT Infrastructure 
  • Electrical Infrastructure 
  • Mechanical Infrastructure
  • Cooling Technique   
  • Cooling Systems
  • General Construction    
  • Tier Standards 
  • Geography 

INSIGHTS BY IT INFRASTRUCTURE

The server market expects to witness significant growth in the next few years due to increased investments from large cloud service providers in the region. The adoption of converged and hyper-converged infrastructure solutions is projected to increase the demand for servers with multicore processors. The migration of enterprises from on-premises to colocation facilities is likely to aid in the growth of high-performance computing (HPC) infrastructure in the Southeast Asia market.

The storage systems market has been driven by the increased adoption of all-flash storage arrays. The increase in high-performance operations requiring strong I/O capabilities is responsible for the growth of flash storage systems. The increasing internet penetration in the region also leads to the development of new facilities, thereby fueling the demand for high-capacity storage solutions. With the declining cost of SSDs, HDDs' procurement will decline during the forecast period. Cloud service providers and managed hosting providers are offering an on-demand upgrade to SSDs as primary storage. 

INSIGHTS BY ELECTRICAL INFRASTRUCTURE

The data center generator market is likely to grow due to the construction of large and mega facilities across the Southeast Asia region. The adoption of efficient power systems such as gas generators is growing. The implementation of the carbon tax in countries such as Singapore has driven operators to opt for efficient generators. Although generators are the significant sources of carbon emission, their adoption among facilities continues to grow. However, operators are adopting efficient and cleaner power sources. Innovations in terms of fuel cells are expected to reduce the use of generators during the forecast period.

The data center UPS market in Southeast Asia is likely to grow at a CAGR of 6%, with revenue share reaching over USD 198 million by 2026.  Most data centers in Southeast Asia are adopting flywheel UPS systems because of the installation of DRUPS systems that combine both generators and flywheel UPS systems' properties. There is an increased interest to procure over 750 kVA UPS systems among large and mega facilities. The introduction of high-capacity UPS systems powered by lithium-ion batteries is also expected to influence the region's UPS market.

INSIGHTS BY MECHANICAL INFRASTRUCTURE

Most data centers in Singapore design to cool infrastructure through water-based cooling techniques. The use of air-based cooling is low in Singapore than in other Southeast Asian countries. Data centers are designed for hot/cold aisle containment systems and are equipped with 42U and 45U racks. However, 47U–48U racks expect to witness high growth during the forecast period. In Malaysia, both air-based and water-based cooling systems use for cooling purposes. Large facilities in the country expect to use water-based cooling solutions, whereas small ones are likely to use air-based cooling systems. Similarly, several small data centers in Thailand implement air-based cooling systems. 

INSIGHTS BY GENERAL CONSTRUCTION

The majority of data center development in Malaysia is greenfield construction. The market has strong growth potential for modular projects. The labor cost in Malaysia is cheaper than in Singapore. However, the non-availability of a skilled workforce is a significant challenge among service providers operating in the country. Several facilities in Singapore install DCIM, BMS, and EMS systems for physical security, monitoring, and management. The data center market in Thailand includes greenfield and brownfield data center construction. It requires trained data center professionals to overcome the shortage of skilled workforce in the country. Infrastructure providers and their local partners also serve as a strong backbone for installation and commissioning services.

The Indonesian market expects to witness a rise in greenfield projects' construction with a power capacity of over 5 MW. The construction cost hovers around $4 million; however, it differs based on the installation of infrastructure and corresponding redundancy. The increasing construction of data centers will provide several opportunities for local contractors to gain expertise in building new facilities. The physical security infrastructure includes CCTV surveillance, mantraps, biometric access, perimeter gate, and on-site security personnel.

INSIGHTS BY TIER STANDARDS

The Tier III data center market in Southeast Asia expects to reach USD 1.3 billion in 2026, growing at a CAGR of over 8%. There are over 89 tier III certified facilities in seven countries, including Singapore, Indonesia, Malaysia, and Thailand. Indonesia is the major location with around 40 certified facilities. Most new data centers in the region are designed according to Tier III standards with a minimum of N+1 redundancy. The Tier IV data center market is expected to reach over USD 620 million by 2026.  Singapore, Indonesia, Thailand, and Myanmar are witnessing Tier IV facilities' construction, with Indonesia and Thailand accounting for seven Tier IV facilities. Facebook, Apple, Microsoft, and Google are the major contributors to the Tier IV market. 

INSIGHTS BY GEOGRAPHY

Singapore is the major data center hub in Southeast Asia, with the presence of several facilities operated by internet, cloud, telecommunication, and colocation service providers. The sub-sea fiber network connectivity routes over 90% of the world's Internet traffic. Singapore has robust fiber connectivity to major APAC data center market and continues to expand its capacity. Many cloud service providers support customers in APAC via Singapore. The Singapore government is likely to migrate government systems to the cloud. In December 2020, Equinix announced the development of its fifth data center facility in Singapore (SG5), which expects to be operational by Q2 2021. The impact of the COVID-19 pandemic on the Singapore data center market was low as these services were termed as essential. Singapore is observing investment in renewable energy such as solar and wind sources which are led by hyperscale and colocation data center operators such as Microsoft, Facebook, and Equinix. Renewable energy installations will continue to grow among existing and upcoming facilities across the country.

INSIGHTS BY VENDORS

HPE, Dell Technologies, Fujitsu, NetApp, Inspur, Oracle Huawei, NetApp, and Cisco Systems are among the major revenue contributors in the Southeast Asia data center market share. AWS, Microsoft, Alibaba, Tencent, IBM, Oracle, and Google are expanding their new cloud regions. These providers are the major adopters of high-density, mission-critical servers, storage infrastructure, and network infrastructure. Schneider Electric, Eaton, Cummins, Vertiv, Rolls Royce Power Systems, HITEC Power Protection Caterpillar, and ABB are the major electrical infrastructure vendors with a strong presence in Southeast Asia. The infrastructure market in Southeast Asia will witness immense competition with the growing construction of data centers in the next few years.

The Southeast Asia data center market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

By IT Infrastructure 

  • Servers
  • Storage
  • Network

By Electrical Infrastructure 

  • UPS Systems
  • Generators
  • Transfer Switches and Switchgears
  • PDUs
  • Other Electrical Infrastructures

By Mechanical Infrastructure

  • Cooling Systems
    • CRAC & CRAH Units
    • Chiller Units
    • Cooling Towers, Dry Coolers, & Condensers
    • Other Cooling Units
  • Racks
  • Others Mechanical Infrastructure

By Cooling Technique    

  • Air-based Cooling Technique
  • Liquid-based Cooling Technique

By General Construction    

  • Core and Shell Development
  • Installation and Commissioning Services
  • Engineering and Building Designs
  • Physical Security
  • DCIM/BMS

By Tier Standards 

  • Tier I & II
  • Tier III
  • Tier IV

By Geography

  • Southeast Asia
    • Singapore
    • Malaysia
    • Thailand
    • Indonesia
    • Vietnam
    • Philippines
    • Cambodia & Myanmar

Frequently Asked Questions

The Southeast Asia data center market size by investment was valued at over USD 7 billion in 2020 and is expected to cross USD 11 billion by 2026, growing at a CAGR of approx. 8% during the forecast period.
The Southeast Asia data center market has 89 Tier III facilities.
Southeast Asia is home to over 150 facilities, with investments in over 15 new facilities was witnessed in 2020.
Chiller units are expected to generate the largest revenue in the Southeast Asia data center market by cooling systems.
In terms of investors, Equinix, Digital Realty, Kepple DC REIT, NTT Global Data Centers, ST Telemedia Global Data Centers, DCI Indonesia, Bridge Data Centres, AirTrunk, AIMS Data Centre, Kepstar Data Centre Management, Regal Orion, Space DC, and VADS Berhad are the major vendors in the Southeast Asia data center market.
The rise in internet penetration, improvement in submarine cables and in-land connectivity, the rapid adoption of cloud-based services, and data localization laws are the major factors contributing to the growth of the Southeast Asia data center market during the forecast period.
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