Japan Data Center Market - Investment Analysis & Growth Opportunities 2026-2031
Japan Data Center Market Size & Share Analysis, Latest Trends and Development, Upcoming Data Center Investments, Growth Report 2031
Japan Data Center Market Size and Share
| MARKET SIZE (INVESTMENT) | USD 38.92 Billion (2031) |
| MARKET SIZE (AREA) | 2,570 Thousand Sq. Feet (2031) |
| MARKET SIZE (POWER CAPACITY) | 610 MW (2031) |
| CAGR - INVESTMENT (2025-2031) | 20.42% |
| HISTORIC YEAR | 2022-2024 |
| BASE YEAR | 2025 |
| FORECAST YEAR | 2026-2031 |
| MAJOR PLAYERS | EquinixMC Digital RealtyAirTrunkNTT CommunicationsAT TOKYOSTACK Infrastructure |
Japan Data Center Market Analysis
The Japan Data Center Market was valued at USD 12.76 billion in 2025 and is projected to reach USD 38.92 billion by 2031, expanding at a remarkable CAGR of 20.42%. As one of the most dynamic segments within the APAC region, the Japan Data Center Industry is being propelled by large-scale digital transformation initiatives, accelerated cloud adoption, and exponential growth in AI workloads.
Japan is steadily emerging as a global hub for AI infrastructure development, supported by proactive government initiatives, increasing foreign and domestic investments, and strategic collaborations among technology providers. This transition is accelerating demand for AI-ready facilities, high-density computing environments, and advanced cooling technologies, strengthening the overall Japan data center infrastructure landscape.
One of the major developments shaping the market is the HPE–KDDI Sakai Data Center project in Osaka, announced in June 2025. The facility will integrate NVIDIA Blackwell-based AI systems along with advanced liquid-cooling technologies and is expected to become operational in early 2026. The project reflects the growing deployment of hyperscale AI data centers across Japan.
In addition, Japan achieved a significant technological milestone in April 2025 when the National Institute of Information and Communications Technology (NICT) recorded an internet speed of 1.02 petabits per second, one of the fastest speeds ever achieved globally. This breakthrough is expected to enhance high-speed connectivity infrastructure essential for next-generation data centers.
The country’s strong emphasis on smart city development, IoT ecosystems, and big data analytics is also contributing to market growth. With nearly USD 225 million allocated for smart city initiatives in FY2025, the Japanese government continues to support the expansion of edge data centers, distributed infrastructure, and digital ecosystems nationwide.
A key milestone is the HPE–KDDI Sakai Data Center project in Osaka (announced in June 2025). Featuring NVIDIA Blackwell-powered AI systems and liquid-cooling solutions, this facility highlights the next wave of hyperscale AI data center deployments in Japan.
The Japan Colocation Market is witnessing strong momentum as enterprises increasingly seek scalable, secure, and low-latency infrastructure solutions. This demand is driving the expansion of Tier III and Tier IV data centers, supported by strategic partnerships such as the CloudHQ–ESR $2 billion Cosmosquare Data Center campus in Osaka.
Further strengthening its technological backbone, the National Institute of Information and Communications Technology (NICT) recorded a world-leading internet speed of 1.02 petabits per second in April 2025. This breakthrough enhances the high-speed connectivity infrastructure critical for future-ready facilities.
JAPAN DATA CENTER MARKET INSIGHTS BY AREA
The Japan data center market by area is expected to reach 2,570 thousand sq. ft. by 2031, driven by the expansion of data center facilities across key cities. In 2025, Tokyo and Osaka emerged as the major locations for data center development, recording significant additions to data center space from operators such as AT TOKYO, Colt Data Centre Services, Digital Edge, Equinix, IDC Frontier, MC Digital Realty, NTT Communications, Telehouse, and AirTrunk. The continued expansion by these operators across major data center hubs is expected to support the growth of Japan’s data center footprint through 2031.
This expansion is further supported by the availability of established industrial and data center parks, which provide suitable locations and infrastructure for new developments. Key facilities include Fuchu Intelligent Park, Goodman Business Park in Inzai, Osaka Bay Area, Shinagawa Seaside Industrial Park, Ota Industrial Park, Takatsuki Industrial Park, and Tokyo Port Terminal Corporation Industrial Park. The presence of these strategically located parks is expected to facilitate further data center development and contribute to the expansion of data center space across Japan.
JAPAN DATA CENTER MARKET INSIGHTS BY POWER CAPACITY
The Japan data center market by power capacity is expected to reach 610 MW by 2031, supported by the growing availability of reliable power infrastructure and the expansion of utility networks serving data center facilities. Tokyo Electric Power Company (TEPCO) and Kansai Electric Power Company (KEPCO) are among the major utility and power providers supporting Japan’s data center ecosystem, supplying electricity to facilities operated by leading data center companies.
Their customer base includes NTT Communications, Vantage Data Centers, CyrusOne, and STACK Infrastructure, highlighting the role of established power providers in meeting the increasing electricity requirements of data centers. As data center operators continue to expand their facilities across Japan, the availability of dependable power supply from major utilities is expected to support the country’s data center power capacity growth through 2031.
Key Report Takeaways
- IT Infrastructure - The server infrastructure segment held the leading position in Japan’s data center market in 2025, accounting for approximately 52% of the total market share.
- Electrical Infrastructure - The generator segment emerged as the dominant component of Japan’s data center electrical infrastructure market in 2025.
- Mechanical Infrastructure - Cooling systems represented the largest share of Japan’s data center mechanical infrastructure market in 2025.
- General Construction - The core & shell development segment accounted for approximately 46% of Japan’s data center market in 2025, making it the leading general construction category.
- Tier Standard - Tier III facilities represented the largest share of Japan’s data center market by tier standard in 2025.
- Colocation - Wholesale colocation services dominated Japan’s colocation market, driven by rising demand for scalable, high-performance data infrastructure.
Note: Market size and forecast figures are generated using Arizton's proprietary estimation framework, based on facility-level primary and secondary research, updated as of the current reporting cycle.
Japan Existing & Upcoming Data Center Portfolio
EXISTING FACILITY DATA POINTS
- Location — region, city, full address
- Operator / owner name & facility name
- Core & shell white-floor area
- Core & shell IT load capacity
- Rack Capacity
- Tier standard (I-IV) & redundancy design
- Year of operations
UPCOMING FACILITY DATA POINTS
- Investor name & location
- Planned area & power capacity (MW)
- Total investment (USD Million)
- Electrical / mechanical / construction investment split
- Announcement year & project status
- Expected year of opening
- Retail & wholesale colocation pricing
Japan Data Center Market Trends and Drivers
TRENDS
| Trends | Impact (2025) | Geographic Presence | Impact (2031) |
|---|---|---|---|
| Advancing toward Sustainable and Green Data Centers | Medium | Tokyo, Osaka | High |
| Growth in AI and Digitalization | Medium | Tokyo, Osaka | High |
| Implementation of Liquid Cooling in Data Centers | Medium | Tokyo, Osaka | High |
Growth in AI
The Japan data center market is increasingly adopting AI technologies to enhance operational efficiency, with solutions such as AI-driven cooling and workload optimization becoming essential to support the rising demand for High-Performance Computing (HPC). These advancements are supporting the expansion of AI, cloud computing, and digital transformation across industries.
In line with this growing adoption, Japan is also pursuing its ambition to become one of the world’s most AI-friendly nations by promoting AI development through supportive policies, strategic investments, and international collaborations.
Implementation of Liquid Cooling in Data Centers
The trend toward liquid cooling in Japanese data centers is growing because of increasing demand for High-Performance Computing (HPC), AI workloads, and energy efficiency. Liquid cooling offers greater thermal efficiency than conventional air cooling, as liquids can absorb and transfer heat more effectively.
This demand is further intensified by the rapid adoption of AI and Machine Learning (ML) applications in Japan, which rely on GPUs such as NVIDIA H100 and other high-performance chips to process increasingly complex workloads, resulting in higher heat generation and strengthening the need for advanced liquid-cooling solutions.
RESTRAINTS
| Restraint | Impact (2025) | Geographic Presence | Impact (2031) |
|---|---|---|---|
| Security Challenges Impacting Data Center Growth | High | Tokyo, Osaka | Low |
| Growing Need for Skilled Workforce | High | Tokyo, Osaka | Low |
| Location Constraints | High | Tokyo, Osaka | Low |
Growing Need for Skilled Personnel
The data center market in Japan is experiencing significant growth, fueled by advancements in cloud computing, the rise of AI and IoT technologies, and increasing digital transformation across industries. This expansion has consequently increased the demand for skilled professionals in 2025.
However, the rapid growth of the sector is occurring alongside an aging workforce, particularly within Japan’s IT industry. Many experienced data center professionals are approaching retirement, while the number of younger workers entering the field remains insufficient to fill the emerging talent gap, creating a key challenge for the continued expansion of Japan’s data center market.
Location Constraints
Japan is prone to earthquakes; therefore, data centers must be designed and constructed to meet stringent seismic standards. This influences both facility design and site selection, requiring developers to prioritize regions with lower seismic risk or adopt more robust construction techniques.
At the same time, developers face additional challenges in rural areas, where the limited availability of renewable energy sources such as wind, solar, and hydroelectric power can make it difficult to secure clean energy supplies and meet Japan’s sustainability targets for data center development.
Japan Data Center Market: Latest Investments, Developments & AI Trends - October 2026
Japan’s data center market is entering a new phase of AI-led infrastructure expansion, with large-scale investments, hyperscale capacity additions, and growing activity beyond Tokyo.
- Mubadala – Akita: Abu Dhabi-based Mubadala Investment is considering investing up to ¥1 trillion ($6.3 billion) in a 500 MW AI data center project in Akita Prefecture. If developed as planned, the project could become one of Japan’s largest data centers, highlighting growing international interest in Japan’s AI infrastructure market.
- NTT DATA – National Expansion: NTT DATA plans to invest at least ¥1.5 trillion ($9.6 billion) through 2033 to expand its data center computing capacity to around 1 GW, adding about 750 MW to meet rising demand for AI and high-performance computing.
- Tokyo – Major Data Center Acquisition: Keppel DC REIT and Keppel agreed to acquire a 90% effective interest in two Tokyo data centers for approximately ¥190 billion ($1.19 billion). The transaction is expected to significantly increase Japan’s contribution to Keppel DC REIT’s portfolio, reinforcing Tokyo’s position as a major regional data center market.
- Osaka/Kansai – AI Infrastructure Expansion: NTT DATA opened its 30 MW Keihanna OSK11 Data Center in Kyoto in April 2026. The AI-ready facility uses advanced cooling technologies and strengthens the Osaka–Kyoto corridor as an important expansion zone for AI and cloud infrastructure.
- AI-Driven Market Expansion: Japan’s data center development is increasingly shifting toward AI-ready facilities, high-density computing, advanced cooling, and regional expansion, with Tokyo and Osaka continuing to anchor the market while locations such as Akita, Hokkaido, Kyushu, and other regional hubs gain attention.
Driver and restraint impact figures are directional estimates reflecting baseline growth, segment mix effects, and variable interactions — not strictly additive.
Segment Analysis
INSIGHT BY IT INFRASTRUCTURE
Based on IT infrastructure, the server segment dominated the Japan data center market, accounting for approximately 52% of the market share in 2025. This dominance is supported by the growing adoption of advanced technologies such as cloud computing, IoT, big data, and AI among enterprises, which is expected to drive the demand for High-Performance Computing (HPC) infrastructure during the forecast period.
Leading server manufacturers, including Dell Technologies, Hewlett Packard Enterprise, Cisco Systems, and Lenovo Group, are well positioned to support this rising demand by providing advanced and high-performance server solutions to Japan’s expanding data center ecosystem.
INSIGHT BY ELECTRICAL INFRASTRUCTURE
Japan’s data center electrical infrastructure market was led by the generator segment in 2025, which captured an estimated 27% share of the market. Most data center facilities in Japan deploy N+1 redundant diesel generators with more than 24 hours of fuel backup to ensure reliable power availability during grid outages. However, data center operators are increasingly exploring sustainable alternatives, including biofuels, to power backup generators and reduce their environmental impact.
At the same time, the growing use of renewable energy, supported by Japan’s highly reliable grid power infrastructure, is expected to reduce reliance on conventional backup generators during the forecast period.
INSIGHT BY MECHANICAL INFRASTRUCTURE
Cooling systems represented the largest component of Japan’s data center mechanical infrastructure in 2025, capturing approximately 64% of the overall market share. Air-based cooling remains the most widely adopted cooling method across data centers in the country, supporting the thermal management requirements of expanding server infrastructure.
The continued construction of new data centers is also expected to drive demand for chillers, cooling towers, and Computer Room Air Handler (CRAH) units. Meanwhile, the increasing adoption of free cooling and liquid immersion cooling technologies is expected to improve energy efficiency and help reduce data center PUE to below 1.2 in the near future.
INSIGHT BY GENERAL CONSTRUCTION
Core & shell construction emerged as the leading general infrastructure segment in Japan’s data center market in 2025, representing approximately 46% of the total market share. The availability of suitable land for data center development is supporting the increasing construction of large-scale greenfield facilities across the country.
This expansion is further supported by the presence of established construction and engineering firms, including Arup, AECOM, Linesight, ISG, Daiwa House Industry, NTT Facilities, Hibiya Engineering, and Turner & Townsend, which are contributing to the development and delivery of data center projects across Japan.
INSIGHT BY TIER STANDARD
Tier III facilities represented the largest share of Japan’s data center market by tier standard in 2025, accounting for approximately 65% of the total market. The strong adoption of Tier III facilities reflects the growing emphasis on reliability, redundancy, and continuous availability, with most data centers in Japan meeting at least Tier III requirements and incorporating a minimum N+1 redundancy configuration.
This trend is also evident in new developments, such as Empyrion Digital’s JP1 Tokyo data center, which is being developed as a Tier III, carrier-neutral facility.
INSIGHT BY COLOCATION
Based on colocation infrastructure, the demand for wholesale colocation services in Japan is expected to increase in the coming years, driven by the growing requirement for scalable, reliable, and high-performance data infrastructure. This growth is encouraging organizations across a wide range of industries to shift toward wholesale colocation facilities to support expanding data volumes and computing requirements.
Key sectors adopting wholesale colocation solutions include cloud service providers, telecommunications, financial services and banking, e-commerce and retail, government and public sector, gaming and media streaming (OTT platforms), and manufacturing.
Geography Analysis
Tokyo
Osaka
Kyoto
Other Cities
Competitive Landscape
The Japan data center market has the presence of several major data center operators such as AT TOKYO, AirTrunk, Colt Data Centre Services, Digital Edge, Equinix, Fujitsu, Goodman, IDC Frontier, Internet Initiative Japan (IIJ), MC Digital Realty, NTT Communications, STACK Infrastructure, and Telehouse (KDDI). Some of the data center operators have expanded their facilities across the country, with new development initiatives expected to become operational during the forecast period.
The country accounts for the presence of some of the major cloud operators, such as Amazon Web Services, Alibaba, Google, Microsoft, Oracle, and Tencent Cloud, with dedicated cloud region(s). Their cloud regions are spread across Tokyo and Osaka.
Several local Japanese companies have formed joint ventures with global companies to invest in cloud computing, AI infrastructure, and sovereign cloud solutions. The goal of these collaborations is to accelerate digital transformation while ensuring data sovereignty, regulatory compliance, and the development of advanced technologies within the country.
For instance, in October 2025, SoftBank announced a joint venture with Oracle to provide secure, compliant, and scalable sovereign cloud and AI services for organizations across Japan. Using Oracle Alloy, SoftBank will build an advanced cloud infrastructure in the data centers located in eastern and western Japan. All data and systems will be fully managed and operated within the country. The service is slated for launch in the eastern and western Japan data centers in April 2026 and October 2026, respectively.
The Japan data center market is increasingly prioritizing sustainability, with many operators investing in energy-efficient infrastructure and renewable energy sources. For instance, in October 2025, Microsoft announced the signing of a Power Purchase Agreement (PPA) with Shizen Energy, a Japanese energy firm that offers around 100 MW of solar power in Japan. Additionally, the energy will be supplied from four solar projects located in Kyushu and Chugoku. One of the projects in Kyushu has become operational, while the remaining three are currently under construction.
Japan Data Center Industry Leaders
Disclaimer: Major players sorted in no particular order.
Recent Industry Developments
Japan Data Center Colocation Market
View Colocation Report →Japan Data Center Market Report Scope
IT Infrastructure
- Servers
- Storage Systems
- Network Infrastructure
Electrical Infrastructure
- UPS Systems
- Generators
- Transfer Switches & Switchgears
- PDUs
- Other Electrical Infrastructure
Mechanical Infrastructure
- Cooling Systems
- Rack Cabinets
- Other Mechanical Infrastructure
Cooling Systems
- CRAC & CRAH Units
- Chiller Units
- Cooling Towers, Condensers & Dry Coolers
- Other Cooling Units
General Construction
- Core & Shell Development
- Installation & Commissioning Services
- Engineering & Building Design
- Fire Detection & Suppression Systems
- Physical Security
- Data Center Infrastructure Management (DCIM)
Tier Standard
- Tier I & Tier II
- Tier III
- Tier IV
Geography
Market Definition
| Term | Definition |
|---|---|
| PUE | Power Usage Effectiveness — total facility energy divided by IT equipment energy; values closer to 1.0 indicate higher efficiency. |
| Redundancy (N, N+1, 2N) | Design standards describing backup capacity for power and cooling components, ranging from no redundancy (N) to fully duplicated systems (2N). |
| CRAC / CRAH | Computer Room Air Conditioner / Air Handler — equipment used to regulate temperature and humidity in the server environment. |
| Hot Aisle / Cold Aisle | Rack layout convention that separates cool air intake from hot air exhaust to improve cooling efficiency. |
| Colocation (Retail / Wholesale) | Retail colocation serves capacity needs under roughly 250 kW; wholesale colocation serves capacity needs between 250 kW and 4 MW. |
Research Methodology
Identify Key Variables
Variables and factors are tested against historical facility-level market data through an iterative process.
Build a Market Model
Market-size estimations are built in nominal terms with a consistent average selling price across the forecast period.
Validate & Finalize
Market numbers and analyst calls are validated through an extensive primary research network across levels and functions.
Research Outputs
Syndicated reports, custom consulting assignments, and facility-level databases.
Facility-level depth
Existing and upcoming facilities tracked across Japan.
Exclusive research
80% of Arizton reports are exclusive and first-to-market.
Trusted by leaders
200+ Fortune 500 companies rely on Arizton research.
24x7 availability
Continuous analyst and post-sale support.
Free customization
15–20% free customization on every license tier.
Key Questions Answered in the Report
How big is the Japan data center market?
What is the growth rate of the Japan data center market?
How much MW of power capacity will be added across Japan during 2026-2031?
What factors are driving the Japan data center market?
Which all geographies are included in Japan center market report?
Last Refreshed on : September 2026
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