Japan Data Center Construction Market Size
| Study Period | 2019 - 2030 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 6.70 Billion |
| Market Size (2030) | USD 9.90 Billion |
| CAGR (2024 - 2030) | 6.59 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Japan Data Center Construction Market Analysis
The Japan Data Center Construction Market size is estimated at USD 6.70 billion in 2024, and is expected to reach USD 9.90 billion by 2030, growing at a CAGR of 6.59% during the forecast period (2024-2030).
Under Construction IT Load Capacity: The upcoming IT load capacity of the Japanese data center construction market is expected to reach more than 2000 MW by 2030.
Under Construction Raised Floor Space: The country's construction of raised floor area in data centers is expected to exceed 10.3 million sq. ft by 2030.
Planned Racks: The total number of racks to be installed is expected to reach more than 512,000 units by 2030.
Planned Submarine Cables: More than 30 submarine cable systems connect Japan, and many are under construction.
Japan Data Center Construction Market Trends
Tier III Segment Held the Majority Market Share in 2023
- In 2023, Japan boasted over 70 data centers holding tier III certification, with Tokyo leading the pack. The nation's demand for tier III data centers is primarily fueled by their reliability and affordability. SMBs, in particular, favor tier III centers for their robust redundancy features. Notably, tier III data centers elevate uptime significantly, boasting an impressive 99.982% annual uptime, a marked improvement over tier II facilities.
- Industries like BFSI, telecom, and media, especially those emphasizing entertainment, are pivoting toward wholesale and hyperscale colocation facilities, elevating the demand for tier III data centers. These centers are distinguished by their robust power and cooling redundancies alongside a comprehensive suite of onsite services. Notably, in 2023, over 80% of Japan's population engaged with social media.
- While tier III data centers remain the industry's favored choice for their financial and operational stability, tier IV facilities are gaining traction. Tier IV facilities, known for their superior performance and an impressive 99.99% uptime, are increasingly becoming the next go-to for large businesses. Despite this, tier III data centers maintain their dominance as the most prevalent standard in the industry, with tier IV facilities projected to exhibit the highest growth rate.
- There is a noticeable decline in demand for tier I and tier II data centers as they struggle to meet the rising demand for seamless services from businesses. The lower reliability and higher downtime of tier I and tier II data centers render them less favorable. Consequently, tier III data centers are on the rise in the market.
- Currently, more than five tier III data centers are under construction nationwide. Notably, ST Telemedia Global Data Centres (STT GDC), Daiwa House Industry, and Vantage Data Centers are leading this market expansion. Such developments are fueling the growth of data centers in the country, prompting operators to either expand existing facilities or construct new ones to meet the rising demand for data processing.
IT and Telecom Segment Held a Significant Market Share in 2023
- The market is witnessing a notable surge in growth as more enterprises shift to cloud platforms. Major global players, including Microsoft, Amazon Web Services (AWS), Google, Oracle, Tencent Cloud, IBM Cloud, and Alibaba Cloud, are heavily investing in Japan's data center market. These companies are swiftly expanding their footprints by establishing cloud regions and data center facilities in the country, solidifying Japan's position as a key hub for cloud operations.
- In January 2024, Amazon Web Services announced a USD 15.2 billion investment to bolster its cloud computing infrastructure in Japan by 2027. The focus is on ramping up data center capabilities in Tokyo and Osaka.
- In April 2024, Microsoft announced a substantial investment of US$2.9 billion in Japan's AI and cloud infrastructure. This move is not only aimed at bolstering the nation's technological capabilities but also focuses on enhancing skills, research, and cybersecurity measures.
- Japan's government has set an ambitious target to connect nearly all households to high-speed fiber optic networks by 2028. Additionally, it has aimed for 99% of the population to be covered by next-generation 5G wireless networks by the close of FY 2030. As part of its digitalization drive, Japan plans to have its shores completely encircled by seabed cables by the conclusion of FY 2025.
- The deployment of 5G networks in the country is set to significantly enhance the digital economy, leading to a surge in demand for high-bandwidth networking infrastructure. Notably, companies like KDDI Corporation and SoftBank Corp. are actively bolstering 5G expansion through strategic collaborations. In a recent move, on May 8, 2024, the two companies announced discussions to potentially broaden the scope of their joint venture, 5G JAPAN Corporation ("5G JAPAN"), which is dedicated to building 5G networks in Japan. Such initiatives not only propel the growth of data centers in the country but also incentivize operators to either expand their existing facilities or construct new ones to meet the escalating data processing demands.
Japan Data Center Construction Industry Overview
The Japanese data center construction market, with prominent players such as HIBIYA ENGINEERING, Ltd and Daiwa House Industry Co. Ltd, presents a somewhat semiconsolidated landscape. Notably, leading data center corporations are significantly boosting their investments in Japan, primarily to expand and establish new facilities. This surge in investments directly mirrors the escalating need for advanced data processing and storage capacities. For instance,
In May 2024, ESR revealed its intention to construct a 60MW data center in Central Tokyo, Japan. The construction is set to kick off in the second quarter of 2026, targeting completion by the close of 2028.
In December 2023, NTT Global Data Centers Japan, a subsidiary of NTT DATA Group Corporation, and TEPCO Power Grid, Inc. (TEPCO PG) announced their collaboration to form a new entity. This joint venture aims to develop and manage data centers in the Inzai-Shiroi region of Greater Tokyo, Japan. The strategic alliance between NTT GDCJ and TEPCO PG focuses on optimizing the placement of data centers. Their goal is to ensure robust power and connectivity, bolstering data center infrastructure, particularly in the Greater Tokyo area.
Japan Data Center Construction Market Leaders
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Daiwa House Industry Co., Ltd.
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HIBIYA ENGINEERING,Ltd.
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Obayashi Corporation
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Kajima Corporation
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Fuji Furukawa Engineering & Construction
*Disclaimer: Major Players sorted in no particular order
Japan Data Center Construction Market News
- May 2024: Vantage Data Centers, a leading data center provider, commenced construction on its inaugural campus in Japan, situated in northern Osaka. This expansive campus covers 485,000 sq. ft (45,000 sq. m) and will house two cutting-edge data center facilities. The primary data center, boasting a 28MW IT capacity, is on track to go live in early 2026.
- June 2023: Digital Edge, in collaboration with real estate developer Hulic, unveiled plans for TYO7, an eight-story data center. The center has been designed to cater to the rising demands of end users and is slated to commence services in 2025.
Japan Data Center Construction Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
2.1 Research Framework
2.2 Secondary Research
2.3 Primary Research
2.4 Data Triangulation and Insight Generation
3. EXECUTIVE SUMMARY
4. MARKET INSIGHT
4.1 Market Overview
4.2 Market Dynamics
4.2.1 Market Drivers
4.2.1.1 Increasing Demand for Digital Services, Cloud Computing, Big Data, and the Internet of Things (IoT) is Driving Market Growth
4.2.1.2 Increased Data Center Activities such as Expansions, Mergers and Acquisitions, and Joint Ventures to Boost Market Growth
4.2.2 Market Restraints
4.2.2.1 High Costs of Land and Power to Hinder Market Growth
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitutes
4.3.5 Intensity of Competitive Rivalry
4.4 Key US Data Center Construction Statistics
4.4.1 Number of Data Centers in Japan, 2022 and 2023
4.4.2 Data Centers Under Construction in Japan, In MW, 2024-2029
4.4.3 Average Capex and Opex for Japan Data Center Construction
4.4.4 Data Center Power Capacity Absorption in MW, Selected Cities, Japan, 2022 and 2023
4.4.5 Top Capex Spenders on Data Center Infrastructure in Japan
5. MARKET SEGMENTATION
5.1 Market Segmentation
5.1.1 By Infrastructure
5.1.1.1 By Electrical Infrastructure
5.1.1.1.1 Power Distribution Solutions
5.1.1.1.1.1 PDU - Basic & Smart - Metered & Switched Solutions
5.1.1.1.1.2 Transfer Switches
5.1.1.1.1.2.1 Static
5.1.1.1.1.2.2 Automatic (ATS)
5.1.1.1.1.3 Switchgear
5.1.1.1.1.3.1 Low-voltage
5.1.1.1.1.3.2 Medium-voltage
5.1.1.1.1.4 Power Panels and Components
5.1.1.1.1.5 Other Power Distribution Solutions
5.1.1.1.2 Power Back-up Solutions
5.1.1.1.2.1 UPS
5.1.1.1.2.2 Generators
5.1.1.1.3 Service - Design & Consulting, Integration, Support & Maintenance
5.1.1.2 By Mechanical Infrastructure
5.1.1.2.1 Cooling Systems
5.1.1.2.1.1 Immersion Cooling
5.1.1.2.1.2 Direct-to-Chip Cooling
5.1.1.2.1.3 Rear Door Heat Exchanger
5.1.1.2.1.4 In-row and In-rack Cooling
5.1.1.2.1.5 Racks
5.1.1.2.1.6 Other Mechanical Infrastructure
5.1.1.3 General Construction
5.1.2 By Tier Type
5.1.2.1 Tier-I and II
5.1.2.2 Tier-III
5.1.2.3 Tier-IV
5.1.3 By End User
5.1.3.1 Banking, Financial Services, and Insurance
5.1.3.2 IT and Telecommunications
5.1.3.3 Government and Defense
5.1.3.4 Healthcare
5.1.3.5 Other End Users
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles*
6.1.1 Hibiya Engineering Ltd
6.1.2 Daiwa House Industry Co. Ltd
6.1.3 Obayashi Corporation
6.1.4 Kajima Corporation
6.1.5 Fuji Furukawa Engineering & Construction
6.1.6 Keihanshin Building Co. Ltd
6.1.7 Meiho Facility Works Ltd
6.1.8 SHINRYO CORPORATION
6.1.9 Taisei Corporation
6.1.10 Linesight
7. INVESTMENT ANALYSIS
8. MARKET OPPORTUNITIES AND FUTURE TRENDS
9. ABOUT US
9.1 Industries Covered
9.2 Illustrative List of Clients in the Industry
9.3 Our Customized Research Capabilities
Japan Data Center Construction Industry Segmentation
Data center construction combines physical processes used to construct a data center facility. It chains construction standards with data center operational environment requirements.
The Japanese data center construction market is segmented by infrastructure into electrical infrastructure (power distribution solutions (PDU, transfer switches, switchgear, power panels and components, and others power distribution solutions), power back-up solutions (UPS and generators), service – design & consulting, integration, support & maintenance)), mechanical infrastructure (cooling systems (immersion cooling, direct-to-chip cooling, rear door heat exchanger, in-row and in-rack cooling, racks, and other mechanical infrastructure)), and general construction. By tier type, the market is segmented into tier I and II, tier III, and tier IV. By end user, the market is segmented into (banking, financial services, and insurance, IT and telecommunications, government and defense, healthcare, and other end users. The market sizes and forecasts are provided in value terms (USD) for all the above segments.
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Japan Data Center Construction Market Research Faqs
How big is the Japan Data Center Construction Market?
The Japan Data Center Construction Market size is expected to reach USD 6.70 billion in 2024 and grow at a CAGR of 6.59% to reach USD 9.90 billion by 2030.
What is the current Japan Data Center Construction Market size?
In 2024, the Japan Data Center Construction Market size is expected to reach USD 6.70 billion.
Who are the key players in Japan Data Center Construction Market?
Daiwa House Industry Co., Ltd., HIBIYA ENGINEERING,Ltd., Obayashi Corporation, Kajima Corporation and Fuji Furukawa Engineering & Construction are the major companies operating in the Japan Data Center Construction Market.
What years does this Japan Data Center Construction Market cover, and what was the market size in 2023?
In 2023, the Japan Data Center Construction Market size was estimated at USD 6.26 billion. The report covers the Japan Data Center Construction Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Japan Data Center Construction Market size for years: 2024, 2025, 2026, 2027, 2028, 2029 and 2030.
Japan Data Center Construction Industry Report
Statistics for the 2024 Japan Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Japan Data Center Construction analysis includes a market forecast outlook to for 2024 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
