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Japan Data Center Market Size

The Japan Data Center Market is projected to experience growth in its capacity and revenue over the forecast period. The market's expansion is driven by the increasing preference for Tier 3 data centers, particularly among small and medium businesses, due to their superior redundancy and uptime. While Tier 4 facilities are gaining traction among large enterprises for their performance and minimal downtime, Tier 3 remains the most widely adopted standard. The market's dynamics reflect a trend where start-up companies in Japan also favor Tier 3 facilities, despite the global inclination towards Tier 1 and Tier 2 data centers.

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Market Size of japan data center Industry

Japan Data Center Market Summary
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svg icon Study Period 2017 - 2029
svg icon Market Volume (2024) 1.69 Thousand MW
svg icon Market Volume (2029) 2.15 Thousand MW
svg icon Largest Share by Tier Type Tier 3
svg icon CAGR (2024 - 2029) 4.97 %
svg icon Fastest Growing by Tier Type Tier 1 and 2
svg icon Market Concentration Medium

Major Players
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*Disclaimer: Major Players sorted in no particular order

Key Players

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Japan Data Center Market Analysis

The Japan Data Center Market size is estimated at 1.69 thousand MW in 2024, and is expected to reach 2.15 thousand MW by 2029, growing at a CAGR of 4.97%. Further, the market is expected to generate colocation revenue of USD 2,836.3 Million in 2024 and is projected to reach USD 4,446.5 Million by 2029, growing at a CAGR of 9.41% during the forecast period (2024-2029).

USD 2,836.30 Million

Market Size in 2024

USD 4,446.5 Million

Market Size in 2029

24.5%

CAGR (2017-2023)

9.4%

CAGR (2024-2029)

IT Load Capacity

1,688.5 MW

Value, IT Load Capacity, 2024

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The IT load capacity of the Japanese data center market expected to reach 2151.53 MW by 2029. The Japanese Growth Strategy Council has called for boosting domestic economic growth through stimulating innovations, with digital transformation.

Total Raised Floor Space

Sq. Ft. 8.04 M

Volume, Raised Floor Space, 2024

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The country's total raised floor area is expected to reach 10.2 million sq. ft by 2029. Tokyo has nearly 1,200 software start-ups in its ecosystem, with a strong representation in advanced manufacturing and robotics.

Installed Racks

402,037

Volume, Installed Racks, 2024

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The country's total number of installed racks is expected to reach 512,270 units by 2029. Tokyo is expected to house the maximum number of racks by 2029.

# of DC Operators & DC Facilities

27 and 97

Volume, DC Facilities, 2024

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The Japanese government is planning to build a number of new data centers across the county with the decentralization of landing bases for submarine cables to diversify landing points.

Leading Market Player

7.7%

Market Share, Air Trunk Operating Pty Ltd, 2023

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Air Trunk Operating Pty Ltd holds the highest share of 7.7% in the data center market compared to its competitors. The company currently operates at an IT load capacity of 185 MW, which is expected to increase during the forecast period.

Tier 3 data center accounted for majority share in terms of volume in 2023, Tier 4 is fastest growing through out the forecasted period

  • Tier 3 data centers are mostly preferred by SMBs (small and medium businesses) for their far superior redundancy protection offerings. There is a significant jump in uptime from tier 2, with tier 3 offering annual uptime of 99.982%. The segment is expected to grow from 1,309.25 MW in 2022 to 1,905.47 MW by 2029, registering a CAGR of 5.51%. These data centers are mainly opted for by large companies.
  • Tier 4 facilities are the next most preferred data centers by large businesses due to their performance, lower downtime, and 99.99% uptime. However, the majority of facilities still prefer tier 3 data centers due to their long-term financial and operational sustainability. Tier 3 is the most widely adopted standard across the industry. However, the growth rate for tier 4 facilities is expected to be the largest.
  • Tier 1 & 2 data centers are the least preferred due to their higher downtime durations and low redundancies, but start-up companies usually prefer these data centers. However, in Japan, start-up companies also prefer tier 3 data center facilities. Currently, in Japan, there are no facilities certified with Tier 1 and Tier 2, and this trend is expected to continue during the forecast period.
Japan Data Center Market

Japan Data Center Industry Segmentation

Osaka, Tokyo are covered as segments by Hotspot. Large, Massive, Medium, Mega, Small are covered as segments by Data Center Size. Tier 1 and 2, Tier 3, Tier 4 are covered as segments by Tier Type. Non-Utilized, Utilized are covered as segments by Absorption.

  • Tier 3 data centers are mostly preferred by SMBs (small and medium businesses) for their far superior redundancy protection offerings. There is a significant jump in uptime from tier 2, with tier 3 offering annual uptime of 99.982%. The segment is expected to grow from 1,309.25 MW in 2022 to 1,905.47 MW by 2029, registering a CAGR of 5.51%. These data centers are mainly opted for by large companies.
  • Tier 4 facilities are the next most preferred data centers by large businesses due to their performance, lower downtime, and 99.99% uptime. However, the majority of facilities still prefer tier 3 data centers due to their long-term financial and operational sustainability. Tier 3 is the most widely adopted standard across the industry. However, the growth rate for tier 4 facilities is expected to be the largest.
  • Tier 1 & 2 data centers are the least preferred due to their higher downtime durations and low redundancies, but start-up companies usually prefer these data centers. However, in Japan, start-up companies also prefer tier 3 data center facilities. Currently, in Japan, there are no facilities certified with Tier 1 and Tier 2, and this trend is expected to continue during the forecast period.
Hotspot
Osaka
Tokyo
Rest of Japan
Data Center Size
Large
Massive
Medium
Mega
Small
Tier Type
Tier 1 and 2
Tier 3
Tier 4
Absorption
Non-Utilized
Utilized
By Colocation Type
Hyperscale
Retail
Wholesale
By End User
BFSI
Cloud
E-Commerce
Government
Manufacturing
Media & Entertainment
Telecom
Other End User
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Japan Data Center Market Size Summary

The Japan Data Center Market is experiencing a steady expansion, driven by the increasing demand for data storage and processing capabilities. The market is characterized by a preference for Tier 3 data centers, which offer superior redundancy and uptime, making them the choice for small and medium businesses as well as large corporations. Although Tier 4 facilities are gaining traction due to their enhanced performance and lower downtime, Tier 3 remains the most widely adopted standard. The market's growth is further supported by the rise of e-commerce and digital payment systems, which are becoming increasingly integral to both small and large businesses in Japan. The proliferation of smartphone users and the expansion of 5G networks are also contributing to the demand for data centers, as they facilitate greater mobile internet usage and connectivity.

The competitive landscape of the Japan Data Center Market is moderately consolidated, with major players like Digital Realty Trust Inc., Equinix Inc., IDC Frontier Inc., NEC Corporation, and NTT Ltd. holding significant market shares. These companies are actively investing in expanding their data center capacities and enhancing their service offerings. Notable developments include Equinix's investment in a new data center in Tokyo and NTT Corporation's substantial investment in a seismic-isolated data center in Kyoto. The market is poised for continued growth, supported by technological advancements and strategic investments by key players, as well as the Japanese government's initiatives to enhance 5G infrastructure and increase mobile connectivity.

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Japan Data Center Market Size - Table of Contents

  1. 1. MARKET SEGMENTATION (INCLUDES MARKET SIZE IN VOLUME, FORECASTS UP TO 2029 AND ANALYSIS OF GROWTH PROSPECTS)

    1. 1.1 Hotspot

      1. 1.1.1 Osaka

      2. 1.1.2 Tokyo

      3. 1.1.3 Rest of Japan

    2. 1.2 Data Center Size

      1. 1.2.1 Large

      2. 1.2.2 Massive

      3. 1.2.3 Medium

      4. 1.2.4 Mega

      5. 1.2.5 Small

    3. 1.3 Tier Type

      1. 1.3.1 Tier 1 and 2

      2. 1.3.2 Tier 3

      3. 1.3.3 Tier 4

    4. 1.4 Absorption

      1. 1.4.1 Non-Utilized

      2. 1.4.2 Utilized

        1. 1.4.2.1 By Colocation Type

          1. 1.4.2.1.1 Hyperscale

          2. 1.4.2.1.2 Retail

          3. 1.4.2.1.3 Wholesale

        2. 1.4.2.2 By End User

          1. 1.4.2.2.1 BFSI

          2. 1.4.2.2.2 Cloud

          3. 1.4.2.2.3 E-Commerce

          4. 1.4.2.2.4 Government

          5. 1.4.2.2.5 Manufacturing

          6. 1.4.2.2.6 Media & Entertainment

          7. 1.4.2.2.7 Telecom

          8. 1.4.2.2.8 Other End User

Japan Data Center Market Size FAQs

The Japan Data Center Market is projected to register a CAGR of 4.97% during the forecast period (2024-2029).

Digital Realty Trust Inc., Equinix Inc., IDC Frontier Inc. (SoftBank Group), NEC Corporation and NTT Ltd are the major companies operating in the Japan Data Center Market.

Japan Data Center Market Report Snapshots

Japan Data Center Market Size - Industry Report on Share, Growth Trends & Forecasts Analysis Up to 2029