Market Trends of Thailand Data Center Construction Industry
Tier 3 is the Largest Tier Type
- In 2023, there were around 25 data center facilities in Thailand with tier 3 certification, with a cumulative IT load capacity of 65 MW. Reliability and affordability are the major factors driving the demand for tier 3 data centers in the country. The segment is projected to register a CAGR of 10% to reach 200 MW by 2030.
- Of these data centers, the majority are located in Bangkok, which accounts for around 61%, and the rest (39%) are spread across the country.
- Within tier 3-certified facilities, the majority are medium-sized, totaling approximately 15 facilities, with a combined IT load capacity of 28 MW.
- Bangkok is projected to get around five more data centers in the coming years. In June 2024, Edgnex, a data center firm based in the United Arab Emirates, revealed its intentions to construct a data center in Bangkok, Thailand. The firm, under the ownership of Damac, disclosed its blueprint for a two-building campus in Bangkok's Rama 9 CBD area. The initial phase of this project, spanning 19,000 sq. m (204,515 sq. ft) and boasting tier 3 standards, is slated for completion by 2026.
- The other expected data center players planning tier 3-certified facilities include ST Telemedia GDC, One Asia Network, Telehouse (KDDI Corporation), and others. Such instances are expected to drive the demand for tier 3-certified facilities in Thailand. This surge in demand, specifically from the tier 3 segment, is projected to bolster the need for data center construction services in the years ahead.
Understand The Key Trends Shaping This Market
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IT and Telecom Expected to Hold Significant Market Share
- Despite securing investments from tech giants like Microsoft for a new data center, Thailand faces a significant roadblock in its ambition to lead Southeast Asia's cloud computing charge. One significant challenge lies in its antiquated energy policy.
- In a significant move in 2024, Satya Nadella, Microsoft's CEO, revealed that Microsoft and the Thai government signed a memorandum of understanding. The agreement paves the way for Microsoft's first data center in Thailand, a strategic response to the escalating demand for cloud computing and AI services in the region.
- Thailand's vision to position itself as the go-to hub for cloud computing and data services is underscored by its Digital Economy and Society Ministry's "Go Cloud First" initiative. This initiative sets its sights on a robust 30% annual growth rate for the data center sector.
- During the November 2023 Asia-Pacific Economic Cooperation (APEC) Leaders' Meeting, the Royal Thai Government and Google unveiled a strategic partnership. Their goal is to enhance Thailand's digital competitiveness and expedite artificial intelligence (AI) innovation. This collaboration focuses on four key pillars essential for Thailand's success in the AI economy, such as bolstering digital infrastructure investments, advocating for secure and responsible AI integration in public services, prioritizing cloud-first policies, and enhancing digital literacy among the Thai populace.
- The Thai government is also focusing on developing the country's telecom network infrastructure. For instance, in July 2024, Ericsson, a Swedish vendor, unveiled its latest move in the Asian market with a cutting-edge 5G facility in Thailand. The initiative, strategically located at Thailand Digital Valley, is a joint effort between Ericsson and the Thai Government, facilitated by the Digital Economy Promotion Agency (depa). This state-of-the-art 5G Innovation and Experience Studio is poised to become a hub for pioneering 5G use cases, fostering collaboration with global partners. Given these trends, the need for data storage is poised to surge among IT and telecom users. This uptick is set to drive a heightened demand for data centers in the region, subsequently boosting the demand for data center construction firms in the near future.
