The Southeast Asia data center market is on the cusp of a transformative era, poised to reach unprecedented heights by 2030. With a projected market value of USD 30.47 billion and a compound annual growth rate (CAGR) of 14.24%, this region is emerging as a critical hub for digital infrastructure. The surge in demand for data centers is driven by several key factors: the rapid adoption of artificial intelligence (AI), the expansion of cloud computing, and supportive government policies that encourage digital transformation.
Southeast Asia’s strategic location, coupled with its burgeoning digital economy, makes it an attractive destination for hyperscale operators and colocation providers alike. Countries like Malaysia, Indonesia, Thailand, and Vietnam are at the forefront of this growth, each offering unique advantages that cater to the evolving needs of the data center industry.
In this blog, we explore the current landscape of the Southeast Asia data center market, highlighting the key players, major projects, and the regulatory environment that is shaping the future of this vital sector.
Market Overview
The Southeast Asia data center market has witnessed remarkable growth in recent years, with investments pouring in from both local and international players. According to industry reports, the market was valued at USD 13.71 billion in 2024 and is expected to more than double by 2030, reaching USD 30.47 billion. This growth is underpinned by a strong focus on sustainability, with countries like Malaysia and Thailand leading the charge in adopting renewable energy sources for their data centers.
Hyperscale operators such as Google, Microsoft, and Amazon Web Services (AWS) are making significant investments in the region, driven by the need for robust infrastructure to support their cloud services and AI initiatives. The region’s favorable conditions, including strategic locations, emerging technologies, and supportive government policies, are attracting global players and fostering a competitive yet collaborative market environment.
The market is segmented into IT infrastructure, electrical infrastructure, and mechanical infrastructure, with notable advancements in cooling techniques and tier standards. Major players like AWS, Equinix, and Google are not only expanding their footprints but also contributing to the diversification of the market landscape.
Key Countries
Malaysia: The Leading Investment Destination
Malaysia has emerged as the top investment destination in the Southeast Asia data center market, thanks to its strategic advantages and supportive regulatory environment. The country’s proximity to Singapore, coupled with cheaper land and power costs, has made it an attractive alternative for data center operators facing constraints in the Lion City.
One of the most significant developments is Google’s investment of USD 2 billion in its first data center in Malaysia, located at Elmina Business Park in Sungai Buloh. This project underscores Malaysia’s growing importance in the global data center landscape. Additionally, the Malaysian Investment Development Authority (MIDA) has approved 12 data center projects worth MYR 90.2 billion (approximately USD 20.9 billion) from 2021 to June 2024, with six of these projects already operational.
The Malaysian government has also introduced new Data Center Planning Guidelines (GPP) to streamline the development process and ensure that data centers are built in suitable locations with minimal impact on residential areas. These guidelines are part of a broader effort to position Malaysia as a regional leader in digital infrastructure.
Johor Bahru, in particular, is highlighted as the fastest-growing data center market in Southeast Asia, according to DC Byte’s 2024 Global Data Centre Index. The city’s proximity to Singapore and availability of land make it a prime location for new developments.
Key Projects:
- Google’s Data Center: USD 2 billion investment in Sungai Buloh, announced in October 2024.
- Microsoft’s Cloud Region: Three data centers planned for launch in Q2 2025 in the greater Kuala Lumpur area.
Indonesia: A Rising Star
Indonesia is another key player in the Southeast Asia data center market, with a projected market value of USD 3.63 billion by 2029. The country’s large population and growing digital economy make it a prime location for data center investments. Major cloud service providers like Amazon Web Services, Google, Microsoft, and Alibaba have already established a presence in Indonesia, with plans for further expansion.
Recent developments include the launch of a USD 300 million data center by LG SM in Jakarta, expected to be completed in 2027, and DCI Indonesia’s expansion of its DCI H1 campus with a new 36MW data center building set to become operational in Q1 2025. These projects are part of a broader trend of increasing investment in Indonesia’s data center infrastructure, driven by the government’s “Making Indonesia 4.0” program, which aims to position the country among the top ten global economies by 2030 through digital transformation.
Indonesia currently hosts 80 existing data centers and has 30 upcoming facilities, with Jakarta and Batam being preferred locations due to their connectivity and economic zones.
Key Projects:
- LG SM Data Center: USD 300 million investment in Jakarta, completion expected in 2027.
- DCI Indonesia’s JK6: 36MW data center in Cibitung, operational in Q1 2025.
Thailand: Strategic Hub for Data Centers
Thailand is rapidly establishing itself as a strategic hub for data centers in Southeast Asia. The country’s data center market is expected to witness investments of USD 3.19 billion by 2030, growing at a CAGR of 12.64%. Government initiatives such as Thailand 4.0 and the Eastern Economic Corridor (EEC) are creating a favorable environment for data center development, with a focus on innovation and technology.
Recent approvals by the Board of Investment (BOI) include USD 2.7 billion worth of investments in data centers and cloud services, featuring projects from companies like Beijing Haoyang Cloud&Data Technology, Empyrion Digital, and GSA Data Center 02. Google’s parent company, Alphabet, is also investing in data centers in Thailand, further solidifying the country’s position in the regional market.
Additionally, Doma Infrastructure Group (DIG) has announced plans to develop three AI-ready green data center parks in Thailand’s EEC, with a total planned power capacity of 1.5GW. These developments highlight Thailand’s commitment to becoming a leading data center destination in the region.
Key Projects:
- Google’s Investment: Part of USD 2.7 billion in BOI-approved projects, to be launched in 2027.
- Doma Infrastructure Group: 1.5GW AI-ready data center parks in Chachoengsao, Chonburi, and Rayong.
Vietnam: Open for Business
Vietnam’s data center market is projected to reach USD 1.75 billion by 2030, with a CAGR of 17.93%. The country has recently opened its data center market to foreign investors, allowing full ownership of data centers, which has attracted significant interest from international players.
Viettel, one of Vietnam’s leading telecommunications companies, aims to build 24 data centers by 2030, with a combined capacity of 560MW. Currently, Viettel operates 14 data centers with a total capacity of 87MW. The Vietnamese government’s National Data Center Project is also driving growth, with goals to enhance e-government and digital economy initiatives.
The relaxation of foreign investment rules and the government’s push for digital transformation are making Vietnam an increasingly attractive destination for data center investments. Hanoi, Ho Chi Minh City, and Binh Duong Province are the primary locations for existing and upcoming data centers.
Key Projects:
- Viettel’s Expansion: Plans for 24 data centers by 2030 with 560MW capacity.
- VNPT’s Investment: Expansion of data centers with green technology focus.
Major Players
The Southeast Asia data center market is home to a diverse range of players, from hyperscale operators to colocation providers and infrastructure vendors. Key players include:
- Amazon Web Services (AWS): Expanding its presence with new regions and availability zones across the region, including planned cloud regions in Thailand and Indonesia.
- Equinix: Operating multiple data centers in key markets like Singapore and Malaysia, focusing on colocation services.
- Google: Investing heavily in Malaysia and Thailand, with plans for new data centers to support cloud and AI services.
- Digital Realty: A global leader with a strong footprint in Southeast Asia, particularly in Singapore and Indonesia.
- ST Telemedia Global Data Centers: A major player with facilities across the region, emphasizing sustainability and connectivity.
These companies are not only building and operating data centers but also driving innovation in areas like sustainability, energy efficiency, and advanced cooling technologies.
Future Outlook
The future of the Southeast Asia data center market looks promising, with continued growth expected through 2030. However, challenges such as power supply constraints, land availability, and regulatory hurdles will need to be addressed to sustain this momentum.
Opportunities abound, particularly in the areas of edge computing, 5G deployment, and AI infrastructure. As the demand for digital services continues to grow, Southeast Asia’s data center market will play a crucial role in supporting the region’s digital economy and connecting it to the global digital landscape.
Key trends
- Sustainability Initiatives: Increasing adoption of renewable energy and green technologies to meet net-zero goals.
- Edge Computing: Growing demand for low-latency services driven by 5G and IoT applications.
- AI Infrastructure: Investments in AI-ready data centers to support machine learning and data analytics.
Conclusion
The Southeast Asia data center landscape is evolving rapidly, driven by technological advancements, strategic investments, and supportive government policies. Countries like Malaysia, Indonesia, Thailand, and Vietnam are leading the way, each contributing to the region’s emergence as a global data center hub. As we look towards 2030, the potential for growth and innovation in this sector is immense, promising a bright future for the digital economy in Southeast Asia.
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