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Japan Data Center Power Market Size (2024 - 2029)

The Japan Data Center Power Market is projected to experience significant growth over the forecast period, driven by factors such as the increasing demand for cloud computing among small and medium-sized enterprises, government regulations for local data security, and rising investments by domestic players. The market's expansion is further supported by the development of IT load capacity, raised floor space, and the installation of racks, particularly in Tokyo. Despite Japan's reliance on imported fossil fuels due to its low energy self-sufficiency, there is a strategic shift towards reducing fossil fuel use and enhancing renewable energy sources. Key market participants are also implementing efficient power management systems to optimize energy consumption, contributing to the overall growth of the market.

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Market Size of Japan Data Center Power Industry

Japan Data Please try againCenter Power Market Summary
Study Period 2019 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 0.82 Billion
Market Size (2029) USD 1.19 Billion
CAGR (2024 - 2029) 5.27 %
Market Concentration Medium

Major Players

Japan Data Center Power Market Major Players

*Disclaimer: Major Players sorted in no particular order

Japan Data Center Power Market Analysis

The Japan Data Center Power Market size is estimated at USD 0.82 billion in 2024, and is expected to reach USD 1.19 billion by 2029, growing at a CAGR of 5.27% during the forecast period (2024-2029).

The increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers in the country.

  • Under construction IT load capacity: The upcoming IT load capacity of the Japanese data center market is expected to reach 2000 MW by 2029.
  • Under construction raised floor space: The country's construction of raised floor area is expected to increase to 10 million sq. ft by 2029.
  • Planned Racks: The country's total number of racks to be installed is expected to reach 500K units by 2029. Tokyo is expected to house the maximum number of racks by 2029.
  • Planned Submarine Cables: There are close to 30 submarine cable systems connecting Japan, and many are under construction. One such submarine cable that was estimated to start service in 2023 is Southeast Asia-Japan Cable 2 (SJC2), which stretches over 10,500 Kilometers with landing points from Chikura, Japan, and Shima, Japan.
  • An increasing need for data storage has resulted in an upsurge in the number of data centers nationwide, and the rising usage of data centers has increased electricity consumption in the country. As Japan has a low energy self-sufficiency ratio of 13.3% for 2021 compared to other OECD countries, presently, it largely depends on fossil fuels like oil, coal, and LNG, which are imported from overseas.
  • Further, in the coming years, Japan has planned to reduce the use of fossil fuels and increase the share of renewable energy. The country’s economy is also becoming less energy-intensive. Moreover, to further reduce energy consumption, key market players are introducing efficient power management systems such as PDUs, busways, and UPS to control unnecessary expenditures in data centers, which is expected to increase the market's growth.

Japan Data Center Power Industry Segmentation

Data center power refers to the power infrastructure, including electrical components and electrical distribution systems, that provide the power necessary to operate and support the devices and servers within the data center. It includes various components and technologies designed to ensure a reliable, uninterruptible power supply for data center IT equipment, including uninterruptible power supplies (UPS), power distribution units (PDU), backup generators, and other power management solutions tailored to the specific needs of data centers. Data center operators achieve data center redundancy through duplicated components to maintain uninterrupted operations in the event of failure of some components and to maintain uptime during maintenance.

The Japanese data center power market is segmented by power infrastructure (electrical solution (UPS systems, generators, and power distribution solutions (PDU, switchgear, critical power distribution, transfer switches, remote power panels, and others)) and Service) and End User (IT and telecommunication, BFSI, government, media and entertainment, and other end users). The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.

Power Infrastructure
Electrical Solution
UPS Systems
Generators
Power Distribution Solutions
PDU
Switchgear
Critical Power Distribution
Transfer Switches
Remote Power Panels
Others
Service
End User
IT and Telecommunication
BFSI
Government
Media and Entertainment
Other End Users
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Japan Data Center Power Market Size Summary

The Japan Data Center Power Market is poised for significant growth over the forecast period, driven by the increasing demand for cloud computing, government regulations on data security, and substantial investments from domestic players. The expansion of retail and hyperscale colocation services, fueled by the rising adoption of cloud-based services, is contributing to the growing need for data center space and infrastructure. The government's push for digitalization, coupled with the deployment of 5G technologies, is further enhancing the demand for data centers. As a result, the market is witnessing a surge in the construction of data centers, with plans for substantial increases in IT load capacity, raised floor space, and the number of racks. This growth is supported by the development of submarine cable systems, which are crucial for enhancing connectivity.

In response to the rising power consumption associated with the proliferation of data centers, Japan is focusing on reducing its reliance on fossil fuels and increasing the share of renewable energy. Key market players are introducing energy-efficient power management systems, such as monitored rack PDUs, to optimize power consumption and reduce operational costs. These advancements are aligned with the government's goals of reducing greenhouse gas emissions and achieving carbon neutrality by 2050. The market is moderately consolidated, with major players like ABB Ltd, Caterpillar Inc., Cummins Inc., Eaton Corporation, and Legrand Group leading the charge in introducing innovative solutions. These developments are expected to drive regional demand and support the growth of the data center power market in Japan.

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Japan Data Center Power Market Size - Table of Contents

  1. 1. Market Dynamics

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Rising Adoption of Mega Data Centers and Cloud Computing

      2. 1.2.2 Increasing Demand to Reduce Operational Costs

    3. 1.3 Market Restraints

      1. 1.3.1 High Cost of Installation and Maintenance

    4. 1.4 Value Chain / Supply Chain Analysis

    5. 1.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.5.1 Threat of New Entrants

      2. 1.5.2 Bargaining Power of Buyers/Consumers

      3. 1.5.3 Bargaining Power of Suppliers

      4. 1.5.4 Threat of Substitute Products

      5. 1.5.5 Intensity of Competitive Rivalry

  2. 2. MARKET SEGMENTATION

    1. 2.1 Power Infrastructure

      1. 2.1.1 Electrical Solution

        1. 2.1.1.1 UPS Systems

        2. 2.1.1.2 Generators

        3. 2.1.1.3 Power Distribution Solutions

          1. 2.1.1.3.1 PDU

          2. 2.1.1.3.2 Switchgear

          3. 2.1.1.3.3 Critical Power Distribution

          4. 2.1.1.3.4 Transfer Switches

          5. 2.1.1.3.5 Remote Power Panels

          6. 2.1.1.3.6 Others

      2. 2.1.2 Service

    2. 2.2 End User

      1. 2.2.1 IT and Telecommunication

      2. 2.2.2 BFSI

      3. 2.2.3 Government

      4. 2.2.4 Media and Entertainment

      5. 2.2.5 Other End Users

Japan Data Center Power Market Size FAQs

The Japan Data Center Power Market size is expected to reach USD 0.82 billion in 2024 and grow at a CAGR of 5.27% to reach USD 1.19 billion by 2029.

In 2024, the Japan Data Center Power Market size is expected to reach USD 0.82 billion.

Japan Data Center Power Market Report Snapshots

Japan Data Center Power Market Size and Share Analysis - Growth Trends and Forecasts (2024 - 2029)