• The market for Asia data centres could be valued at more than USD 71billion by 2032, according to current projections
• The number of mobile internet users in Asia is predicted to reach 1.8 billion by 2030
• India and countries in Southeast Asia will record the most growth, but data centre opportunities can be found throughout the region

Asia has witnessed a swift rise in data centres. What’s more, the sector isn’t even close to reaching its full potential. Surging mobile usage, artificial intelligence advancements, and digital transformations across a wide range of industries mean additional space and support technologies will be needed. In the second instalment of our series looking at Asia Market Opportunities in 2025, Asian Insiders Managing Partner Jari Hietala explores why data centres are taking off. Click here to read the previous articles.

A simple ChatGPT query doesn’t seem like much to the user who enters it. In fact, most people equate the action with using a search engine to find an answer. However, the artificial intelligence (AI) powered function needs up to five times more processing capacity. That adds up quickly.

With AI set to grow significantly over the coming years, so too will the need for increased processing capacity. Particularly in Asia which is home to 60 percent of the world’s population. A population that is becoming increasingly digital first. Other usages requiring increased processing include growing Internet of Things (IoT) applications and cloud computing. This is only one part of the larger equation, though.

The number of mobile internet users in Asia is predicted to increase from 1.4 billion in 2023 to 1.8 billion by 2030. This growth would see mobile data traffic in the region quadruple by the decade’s end.

Elsewhere, you have several developing economies looking to accelerate digitisation efforts which require more data storage space and servers. Without these, none of the initiatives can successfully be implemented.

Environmental challenges need to be addressed, too. Data centres require vast amounts of energy and are among the largest carbon emitters globally. Countries in Asia must find a way to scale up capabilities while still meeting stated climate targets. The balancing act is delicate.

Simply put, data centres are critical to economic growth across Asia. The need for storage is expanding rapidly, and this is going to continue into the foreseeable future as businesses, governments, and local populations all require greater access. There is also a realisation that technology and solutions from outside the region will be required.

Asia data centres primed for growth

In 2023, the data centre market in Asia was valued at more than USD 24 billion. The sector has a predicted compound annual growth rate (CAGR) of nearly 12.6 percent over the next eight years. The market would surpass USD 71.6 billion by 2032 should the projection hold.

India is one market many experts are bullish on due to several emerging trends, including e-commerce proliferation and government initiatives. Data centre CAGR here could potentially reach 19 percent. Southeast Asia is expected to be a key driver in growth due to increasing mobile internet penetration rates and demand for digital services.

As far as regulations are concerned, the situation is very fluid. Most countries are placing an emphasis on privacy laws and data protection, but these vary in each market. There is also a realistic possibility that additional policies covering various aspects of the process will be enacted, including measures beyond security.

Where are the opportunities?

Asia provides a wealth of data centre opportunities since just about every country needs something. Interestingly, these can be found across the value chain and are not limited to operators. With that in mind, here are a few markets worth highlighting.

India

Needs: Operations, capacity expansion, data security and compliance, green solutions

The Indian data centre market is expected to grow exponentially over the coming years. This is to be driven by the increasing demand for cloud computing, big data analytics, and IoT, as well as a rapidly growing e-commerce industry.

Currently, India’s data management and storage supply is not keeping up with demand. Foreign data centre operators are becoming increasingly active in the market. Additionally, firms possessing innovations capable of enhancing security and efficiency are now highly sought after.

Indonesia

Needs: Operations, capacity expansion

A significant increase in demand for data services from both the public and private sectors has created a pressing need for new data centres and capacity expansion services at existing facilities. The Indonesian government rolled out a range of tax and non-tax incentives with foreign firms eligible to receive these.

Japan

Needs: Smaller facilities in new locations, advanced technologies

Existing data centres in Japan are looking for advanced technologies that can improve energy efficiency, cooling capabilities, scalability, and connectivity. Edge computing solutions are another area attracting investment. Some players have begun launching function-specific facilities catering to AI.

While Tokyo and the country’s other major population areas are currently seeing a lot of competition, the Japanese government is creating favourable conditions for companies that open data centres in smaller cities and rural regions.

South Korea

Needs: Edge data centres

South Korea is searching for smaller, edge data centres, as it looks to fulfil IoT, streaming, and other usage in major cities. The country has its fair share of large-scale data centres but is now eager to close this gap.

Malaysia & Singapore

Needs: Green solutions

Malaysia and Singapore are the two largest data centre markets in Southeast Asia and are highly competitive. Both are searching for various green solutions, including technologies that allow facilities to utilise renewables and innovation capable of improving water efficiency.

Vietnam

Needs: Large-scale facilities, operations, capacity expansion

Despite a robust e-commerce sector and rising internet penetration rate, Vietnam has found itself trailing many ASEAN peers in terms of data centre development. Recognising this, the Vietnamese government approved 100 percent foreign ownership of companies in the data centre sector in July 2024.

Asia market opportunities 2025: Data centres can’t wait

There are few Asia market opportunities in 2025 quite like data centres. That’s because the time for investment is now. The industry is very much growing, yet competition isn’t nearly as fierce as more well known global hot sports. This, of course, will only rise in the years to come.

At present, many countries are encouraging foreign investment in the sector through incentives and other schemes. As more investment and overseas firms come in to meet demand, these will be scaled back or shelved entirely.

A sense of urgency is important but so too is not rushing into market entry. Each country has different needs and regulations that must be taken into consideration. Demand in the sector remains strong. However, finding the right fit and being prepared matters most.  

To learn more about data centre opportunities in Asia and assess your readiness to enter the market, schedule a no-obligation call with Jari Hietala, Managing Partner: jari.Hietala (at)asianinsiders.com