South Korea Data Center Market Size & Share Analysis - Growth Trends and Investment Forecast (2026–2031)

By IT infrastructure, the server segment dominated the South Korea data center market, accounting for approximately 55% of the market share in 2025. The segment is witnessing strong demand due to the increasing adoption of digital transformation initiatives, cloud computing, artificial intelligence, rising internet penetration, and the expansion of 5G networks. These developments are encouraging enterprises and technology providers to deploy advanced, high-performance servers capable of supporting growing data processing and computing requirements.

The increasing demand for AI infrastructure is further driving server deployments in South Korea. For instance, Dell Technologies delivered its Dell AI Factory, powered by PowerEdge XE-Series servers, to Naver Cloud, a subsidiary of Naver Corp., to support the HyperCLOVA X GenAI platform. The deployment is designed to support scalable multilingual AI solutions while strengthening data sovereignty and AI computing capabilities.

In the electrical infrastructure segment, UPS dominated the South Korea data center market in 2025, supported by the growing need for reliable backup power as data center capacity and power requirements continue to increase. Rising investments in data center infrastructure are driving demand for advanced UPS systems that can ensure uninterrupted power supply for critical IT workloads and protect sensitive equipment from power fluctuations, outages, and other electrical disturbances.

Data center operators are also increasingly transitioning from traditional lead-acid batteries to lithium-ion battery-based UPS systems to improve energy efficiency, reduce maintenance requirements, optimize space utilization, and support sustainability goals. As data center capacity and power consumption continue to expand, demand for advanced UPS solutions, particularly lithium-ion-based systems, is expected to increase during the forecast period. For instance, Equinix has planned the development of the SL3x data center facility in Seoul, South Korea, which will feature a block-redundant UPS system with an N+1 redundancy configuration, supporting power reliability, system resilience, and operational continuity for critical workloads.

In mechanical infrastructure, the cooling system segment dominated the South Korea data center market in 2025, reflecting the critical role of efficient cooling systems in maintaining optimal operating conditions for data center equipment. The increasing deployment of high-density IT infrastructure and growing power requirements are driving data center operators to adopt reliable and redundant cooling solutions to manage heat generation and ensure continuous operations.

For instance, the SEL1 data center facility operated by Digital Edge DC in Seoul is equipped with an N+1 redundant floor blow-up air-cooling system, providing additional cooling capacity and operational reliability. Similarly, the ICN01A data center facility being developed by STACK Infrastructure in Seoul is planned to install N+1 redundant water-cooled chiller systems, further highlighting the adoption of resilient and efficient cooling infrastructure in South Korea.

By general construction, the core & shell development segment dominated the South Korea data center market in 2025, supported by the increasing development of new data center facilities and greenfield projects across the country. South Korea’s data center construction market is largely driven by greenfield development, while the country is also witnessing the construction of new AI-focused data center projects to support growing computing requirements. In addition, the on-site installation of supporting infrastructure, including power substations and renewable energy facilities such as solar and wind power plants, is increasing the scope and complexity of construction activities for data center contractors.

Despite these additional infrastructure requirements, data center construction costs in South Korea are comparatively lower than in several other major APAC markets, including Japan, Singapore, Indonesia, and Malaysia. This relatively competitive construction cost, combined with increasing demand for data center capacity and AI infrastructure, is supporting continued investment in new facilities across the country.

By tier standards, the tier III segment dominated the South Korea data center market in 2025, supported by the growing demand for reliable and resilient data center infrastructure. Tier III data centers are designed with a higher level of reliability and typically incorporate a minimum N+1 redundancy configuration for both power and cooling systems, allowing maintenance and equipment failures to be managed without disrupting critical operations.

This level of redundancy enhances operational continuity and reduces the risk of service interruptions, resulting in approximately 1.6 hours of downtime annually.

In 2025, retail colocation represented the dominant service segment in the South Korea data center market, supported by the country’s position as one of the major colocation data center hubs in the APAC region. The increasing demand from enterprises, cloud service providers, and digital businesses is driving the adoption of colocation services, particularly in established data center locations.

Seoul remains one of the most attractive destinations for data center development, with around 32 operational data center facilities as of September 2025. The city is also witnessing continued expansion, with approximately 10 new data center facilities either in the planned or under-construction stages. The growing number of existing and upcoming facilities is expected to further strengthen South Korea’s retail colocation market during the forecast period.