According to a report by Research and Markets, the APAC data centre colocation market was valued at $17.14 Billion in 2023, and is expected to reach $30.69 Billion by 2029, rising at a compounded annual growth rate (CAGR) of 10.20 per cent.
The deployment of 5G services and the growth in the demand for connectivity in new locations and Tier I and Tier II cities attract investments from edge data centre operators. For instance, edge operators, such as Leading-Edge Data Centres and Edge Centres, actively invest in establishing multiple edge data centres across Indonesia, Australia, Malaysia, the Philippines, Thailand, India, Vietnam, Thailand, and others.
Further, governments and data centre operators are becoming increasingly interested in renewable energy. Governments across all APAC countries are taking initiatives to promote the adoption of renewable energy sources. For instance, Taiwan aims to generate 20 per cent of its electricity through renewable energy by 2025 using wind and solar photovoltaic (PV) promotion plans. Taiwan’s renewable power capacity will reach over 26 GW within the next five years.
As per the report, data centre operators also participate in governments’ efforts to adopt sustainable energy by using renewable energy, signing power purchase agreements (PPAs), or setting targets for carbon-free operations. For instance, in March 2024, NTT DATA signed a new solar energy PPA of around 40 MW with TEPCO.
Furthermore, digitalisation is a major agenda of governments in all countries, including Malaysia, Thailand, India, Australia, Japan, South Korea, China, New Zealand, and others. Several governments plan digital strategies to strengthen the digital growth of their countries. For instance, the government of Australia launched its Digital Economy Strategy 2022 update to develop Australia’s digital economy by 2030.
The significant growth potential and revenue-generating opportunities in the APAC data centre market prompt operators to continuously invest in mergers and acquisitions and engage in project joint ventures. Several global organisations enter the industry through joint ventures. For instance, STACK Infrastructure entered the South Korean industry through a joint venture with ESR Cayman to develop a data centre.
In addition, the development of colocation data canters dominates the data centre construction market in APAC in terms of the number of investments. Several new entrants enter the market for the development of colocation data canters. Hyperscale data centre operators also increase their market presence with investments in cloud regions. In 2023, some countries, such as Indonesia, Australia, and Myanmar, also witnessed investments in enterprise data canters.
The report stated that the APAC data centre colocation market has strong growth potential in electrical infrastructure due to the high demand for lithium-ion and nickel-zinc batteries used in UPS systems. Operators can also adopt new-age generator sets that run on hydrotreated vegetable oil (HVO), natural gas, etc.
The report also mentioned that APAC data centre colocation market demands air- and water-based cooling solutions in terms of cooling infrastructure. Data centre operators, especially in Southeast Asia, are more inclined toward adopting water-based cooling solutions due to the tropical climate. The market has opportunities for rack infrastructure vendors with the growth in the adoption of racks of 42U to 52U in height. Some countries in the region also adopt racks below 42U height.
