By 2030, data center capacity in Southeast Asia is expected to triple, reaching 6.5 GW from 5.2 gigawatts (GW), driven by a notable 10x increase in demand for artificial intelligence (AI) computing. This will spur a rapid increase.
New BCG report released Our October report examines the significant growth of the Southeast Asia data center market in recent years, examines emerging trends shaping the future of the industry, and shares predictions for the coming years.
According to the report, between 2019 and 2023, data center capacity in Southeast Asia more than doubled, increasing from approximately 0.8 GW to 1.7 GW.
This expansion was primarily driven by the development of the Singapore-Johor-Batam (SJB) corridor, a key hub for data traffic in Southeast Asia. This corridor has seen increased demand for cloud service providers, robust fiber connectivity, and extensive subsea fiber networks that connect the world. Major global markets and Asia Pacific (APAC) markets.
AI revolution driving data center demand in Southeast Asia
The data center market has grown significantly over the past four years, and the next wave of expansion is expected to be even more dramatic, driven primarily by the rapid rise in AI computing requirements.
BCG predicts that the global AI market will grow at a compound annual growth rate (CAGR) of 20% between 2022 and 2030, reaching USD 2.1 trillion.
This growth is fueled by an increasing demand for AI-generated content that requires more computing power, changing consumption patterns that require AI-enabled data centers, and a variety of AI models designed for precision and value creation. This will be driven by several factors, including increased adoption of
Southeast Asia is uniquely positioned to benefit from this trend. First, the region is home to young digital natives who are quick to embrace AI-powered solutions.
This enthusiasm is evidenced by countries such as Singapore, the Philippines, and Malaysia ranking among the top in the world for AI-related online searches. According to Go to e-Conomy SEA 2024 report.
Additionally, governments in the region play a key role in accelerating AI development by implementing national bodies to strengthen AI promotion and governance. On the other hand, regulatory sandboxes in jurisdictions that include: Singapore and Thailand Allows experimentation.
Data center investment is rapidly increasing in ASEAN
This supportive environment fosters a favorable environment for AI innovation and attracts investments from national and international players.
Facilities with approximately 1 GW of power capacity are expected to come online in Malaysia over the next two years. This is double the existing data center capacity the country currently has. A further 3GW has been announced and, if approved, will be phased in over the next three to five years, The Straits Times reported. reported.
Microsoft is one of the major technology companies injecting capital into Malaysia. announcement In May, it plans to invest US$2.2 billion over the next four years to build cloud and AI infrastructure. Similarly, Amazon Web Services (AWS) announced announced in August that it plans to invest an estimated US$6.2 billion by 2038 to establish data centers and cloud regions in the country.
AWS is also developing a new data center region in Thailand. announcement announced in May that it plans to invest US$5 billion in data center development across the country by 2027. Thailand’s new AWS infrastructure is scheduled to launch in early 2025 and will be the company’s fourth region in Southeast Asia, following similar capabilities developed in Singapore, Indonesia, and Malaysia.
Google is also one of the major companies that has set its sights on Thailand. commit US$1 billion to build data centers and cloud regions in the country.
Meanwhile, Singapore remains Southeast Asia’s data center powerhouse, with more than 70 data centers with a total capacity of approximately 1.4 GW. According to Submit to the Information and Communication Media Development Authority (IMDA).
The country suspended data center construction for three years from 2019 to 2022, but now plans to increase capacity by more than one-third to meet rising computing needs, and is actively expanding its data center industry. It is expanding.
At least 0.3 GW of data center capacity will be added over the next few years, with a further 0.2 GW to be allocated exclusively to operators using green energy options, the government said. said In May.
Featured image credit: Edited from freepic
