Market Trends of China Data Center Rack Industry
IT and Telecom to have significant market share
- The country's growing demand for streaming services, such as Douyin, Kuaishou, Iqiyi, Youku, and Tencent Video, has increased data consumption with their high-quality video streaming services. Netflix, a popular OTT platform used in many countries, is unavailable in China.
- However, short video platforms like Douyin and Kuaishou are preferred over OTT services. Around 931 million users streamed short videos, while only 464 million streamed through these platforms in 2021.
- The growing content demand is expected to increase the IT load capacity from 130.26 MW in 2022 to 165.24 MW by 2029, registering a CAGR of 3.46%. As most industries adopt Industry 4.0 standards and introduce automation in their factories, data consumption by end users is expected to increase.
- The manufacturing segment had an IT load capacity of 46.02 MW in 2021, and it is expected to increase from 53.01 MW in 2022 to 128.52 MW by 2029, registering a CAGR of 13.49%. Chinese users prefer online modes of payment to cash, and increased use of financial services by the users is expected to increase the IT load consumption from 139.35 MW in 2022 to 275.40 MW by 2029, registering a CAGR of 10.22%. Therefore, such growth is expected to drive demand for rack installations.
Understand The Key Trends Shaping This Market
Download PDF
Full Rack has Majority Market Share
- In China, due to growing space scarcity between various companies, the full rack has a majority of the market share. In order to cope with increasing rack capacity due to the rapid growth of mobile broadband and the increase in Big Data Analytics combined with cloud computing, it is necessary to build a fully rack-equipped data center.
- Companies increasingly rely on data centers for efficient management of their databases and storage, as they generate significant amounts of data every day. The main driving factor for data center rack usage is, therefore, the increased deployment of fully configured data centers. Also, the growth of the market is being influenced by the growing demand for IT services and investments made by large companies.
- At first, there was a limited focus on rack space in data centers; only size and cost were taken into account during deployment. Nevertheless, there is an opportunity for increased use of rack space in the data center as more and more users from different sectors, such as online banking, telecommunications, media and entertainment, and others, are adopting applications with higher density.
- The increasing demand for computing and data processing has led China to launch a huge national project to centralize the data center system, called the East to West Computing Capacity Diversion Project.
- The Chinese government plans to build eight computing hubs and 10 data center clusters to build a unified data center system by 2025. The project aims to channel the growing demand from the east to the data centers in the western region of the country.
- Data center companies are investing in infrastructures in these regions where the land value is less, and electricity value is subsidized, leading to a preference for the mega segment. The capacity of mega data centers was expected to increase to 1880.9 by 2029 from 921.7 MW in 2022, registering a CAGR of 9%, followed by massive, large, medium, and small data centers.
