5G Network Deployment boosting Investments in the Edge Data Center Market in Asia Pacific Region


Arizton’s recent market research report on Asia Pacific data center market provides comprehensive industry analysis, trend forecasts, and competitive analysis. The study includes insights on the segmentation by Facility Type (small-sized, medium-sized, and hyperscale), Infrastructure (IT, electrical, and mechanical), IT Infrastructure (servers, storage, and network), Electrical Infrastructure (uninterruptible power supply (UPS) systems, generators, power distribution units (PDU), transfer switches & switchgears, and other), Mechanical Infrastructure (cooling systems, racks, and other mechanical infrastructure), Cooling Systems (CRAC & CRAH units, chiller units, cooling towers, dry coolers & condensers, economizers and evaporative coolers, and other cooling units), Cooling Technique (air-based and liquid-based), General Construction (building development, installation and commissioning services, building designs, physical security, data center infrastructure management (DCIM) & building management systems (BMS)), Tier Standards (Tier I and II, Tier III, and Tier IV), and Geography (Singapore, Malaysia, Thailand, Indonesia, and Other Southeast Asian Countries).

The Asia Pacific data center market is expected to grow at a CAGR of over 3% during the period 2019–2025.

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The internet penetration is one of the strongest drivers for the growth of the Asia Pacific data center market. The increase in social media usage among consumers and digital transformation by enterprises across industry verticals are major factors promoting the growth. The number of internet users in China is increasing rapidly. In 2019, China had more than 850 million internet users, which accounted for more than 21% share of the global user base. The internet penetration rate in China is about 60%. Around 90% of the users in China access the internet via mobile phones. About 60% of mobile users have access to social networks in China. The e-commerce market in China is flourishing due to the presence of several e-commerce giants. In Hong Kong, around 6.6 million people, which accounts for about 90% of the total population, are internet users with about 80% of the population are active social media users, with around 85% using smartphones.

The leading drivers and trends influencing the growth of the Asia Pacific data center market are discussed below:

5G Deployment to Increase Edge Data Center Investments

The deployment of the 5G network has started in China, South Korea, Japan, and Australia. It is expected that China will become one of the largest markets to adopt the 5G network, with around half a billion users by 2025. Japan and South Korea are likely to migrate to the 5G network as early adopters during the forecast period. Around 65% and 49% of mobile connections will be 5G in Korea and Japan by 2025. Also, telecommunication providers in Singapore, Malaysia, Hong Kong, and the Philippines are targeting the commercial launch of 5G network by end of 2020. China Telecom, China Unicom, and China Mobile will be rolling out 5G technology in 2020. In April 2019, South Korea telecom operators, SK Telecom, KT and LG Uplus launched commercial 5G services. In India, Reliance Jio, Airtel, and Vodafone Idea have submitted applications to commence 5G trails in partnership with service providers such as Huawei, ZTE, Samsung, Ericsson, and Nokia.

Read: Japan Data Center Market - Investment Analysis and Growth Opportunities 2021-2026

Increasing Procurement of Renewable Energy

The increasing power consumption by data centers and the need to reduce carbon footprint have driven several service providers to procure clean, renewable energy sources. Data center operators such as Equinix and NEXT DC are actively procuring renewable energy. The investment in the Asia Pacific data center market is growing significantly, and the importance of procuring renewable energy is high. Also, the power consumed by facilities in APAC is growing due to the use of HPC infrastructure and the deployment of hyperscale facilities. Hence, the increased awareness of procuring renewable energy sources for data center operations is likely to grow during the forecast period. In China, data centers consume more than 100 TWh of power, and it is expected to grow at a rate of 30% YOY. The Chinese government has undertaken a huge energy transition to shift towards renewable energy over the past decade. By the end of 2018, China was able to install a solar PV capacity of about 174 GW. The government has launched power grid parity policies to bring the cost of wind and solar power on par with coal-fired power over the next 2−3 years. China’s cloud giants are also setting up highly efficient facilities that make the use of renewables.

Increase in Submarine Fiber Cable Deployment

Government entities are strengthening their internet infrastructure, especially in underdeveloped and developing economies, through partnerships with local telecommunications providers and global businesses. The Southeast Asia-Japan 2 cable (SJC2) is a major submarine project coming in the SEA region that connects Singapore, Thailand, Cambodia, Vietnam, Hong Kong, Taiwan, Mainland China, and Korea. It has a capacity of 144 Tbps. Hong Kong Guam (HK-G) submarine cable with 48 Tbps capacity is being constructed by NEC and RTI Connectivity. The project is likely to become operational by 2020.

Many countries are also developing submarine fiber cables that can transmit data at a higher speed with reduced latency. The Indonesia Global Gateway Project, which is a submarine cable project covering around 5,300 km, carried out by Telkom to connect and improve the connectivity in Indonesia and Singapore. This cable became operational in May 2019.

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Hewlett Packard Enterprise (HPE), Cisco, Dell Technologies, Huawei, IBM, and Inspur are the key data center critical (IT) infrastructure providers.

ABB, Eaton, Rittal, Schneider Electric, STULZ, Vertiv, Caterpillar, and Cummins are key data center contractors.

AECOM, Arup, Aurecon, CSF Group, DSCO Group, M+W Group, Nikom Infrasolutions, NTT FACILITIES Group are the key data center support infrastructure providers.

Apple, AWS (Amazon Web Services), GDS Holdings, Google, Digital Realty, Equinix, NEXTDC, NTT Communications, and ST TELEMEDIA GLOBAL DATA CENTERS (STT GDC) are key data center investors.

The complete overview of the latest market research report on Asia Pacific data center market by Arizton is now available.

The report offers a detailed study of major trends, drivers, challenges and provides market sizing and forecast for major geographical regions and key countries.

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