The global demand for data centers is surging, driven by cloud computing, artificial intelligence (AI), and smart city initiatives. Southeast Asia is emerging as a key player in this space, with significant investments and a strong focus on sustainability. This article explores the dynamic growth of the Southeast Asia data center market, projected to reach USD 30.47 billion by 2030, and its role in advancing smart urban development.
Southeast Asia Data Center Market – A Surge in Growth
Valued at USD 13.71 billion in 2024, the Southeast Asia data center market is expected to grow at a compound annual growth rate (CAGR) of 14.23%, reaching USD 30.47 billion by 2030. Key investment hotspots include Malaysia, Indonesia, Thailand, and Vietnam, each leveraging unique advantages to attract data center operators.
Malaysia: A Leading Investment Destination
Malaysia is the top destination for data center investments in Southeast Asia, driven by affordable land, competitive power prices, and a supportive regulatory environment. Its favorable conditions for renewable energy, such as solar and hydropower, align with the region’s sustainability push. In July 2024, AIMS Data Centre launched a new facility in Kuala Lumpur, offsetting energy use with hydroelectric power from Sarawak Energy Berhad. Etix Everywhere deployed solar panels across 6,000 square feet, achieving 11% of its data center energy consumption from solar power, aiming for 100% renewable energy by 2025.
Indonesia: Urban-Centric Growth
Indonesia plays a pivotal role with over 14 cloud zones operated by providers like AWS, Google Cloud, and Microsoft Azure. Investments are concentrated in Greater Jakarta due to rural challenges like inadequate network infrastructure and unstable power supply. In October 2024, Microsoft announced a USD 1.7 billion investment in AI and cloud data centers, signaling strong growth potential.
Thailand: A Rising Star
Thailand is gaining traction due to its strategic location, robust power grid, and progressive government policies, including tax incentives and streamlined permits. In September 2024, Google announced a USD 1 billion investment in data centers in Bangkok and Chonburi, planned for 2025–2029. NTT DATA’s USD 90 million data center in Bangkok is set to operate by mid-2025.
Vietnam: AI-Driven Expansion
Vietnam is accelerating data center growth to capitalize on AI opportunities. In April 2024, Viettel IDC opened Vietnam’s largest data center at Hoa Lac Tech Park in Hanoi, with over 2,400 racks and 30% renewable energy use. Google announced plans for a hyperscale data center in Ho Chi Minh City, expected to be operational by 2027.
Singapore: A Market Rebound
Singapore’s construction moratorium slowed data center investments, but since its lifting in 2022, the market has rebounded. In September 2024, Microsoft signed a 20-year power purchase agreement (PPA) for 200 MW of solar power. Oracle Cloud launched its second cloud region in Singapore in July 2024 to meet AI and cloud service demand.
Sustainability as a Key Driver
Sustainability is a defining trend in Southeast Asia’s data center market. Operators like Google and Microsoft are signing PPAs for renewable energy, while advanced cooling techniques, such as liquid and air cooling, are gaining traction. Thailand’s Utility Green Tariff (UGT), published in January 2024, supports a 30% increase in renewable energy by 2037 and carbon neutrality by 2050. Regional data protection laws in Thailand, Singapore, and Indonesia, mandating data localization, further drive market growth.
Vendor Landscape and Infrastructure Trends
The market is supported by a robust vendor ecosystem, including IT infrastructure providers like Cisco, Dell Technologies, and Huawei, and contractors like Arup, Aurecon, and NTT Facilities. Adoption of 25–100 GbE switches, flash storage, and blade servers is rising to meet cloud data center demands. Liquid cooling, as implemented by Digital Realty in its SIN11 facility in Singapore, reduces power consumption by up to 29%. However, reliance on generators, which contribute to carbon emissions, remains a challenge.
Smart City Initiatives
Southeast Asia is advancing smart city initiatives to address urban mobility, public safety, healthcare, and energy efficiency. Data centers are critical, managing vast data from interconnected urban systems. Countries like Singapore and Thailand are leading with smart energy solutions and enhanced connectivity, powering the region’s digital future.
Conclusion
Southeast Asia’s data center market is poised for transformative growth, driven by sustainability, technological innovation, and strategic investments in hotspots like Malaysia, Indonesia, Thailand, and Vietnam. With a strong emphasis on renewable energy and advanced infrastructure, the region is aligning data center growth with smart city initiatives. As Southeast Asia continues to invest in sustainable practices and digital infrastructure, it is set to become a global leader in the data center and smart city ecosystems, unlocking opportunities for innovation, resilience, and equitable growth.
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