China Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2029)

China Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2029)

The China Internet Data Center Market size is expected to grow from USD 64.01 billion in 2023 to USD 293.15 billion by 2028, at a CAGR of 35.57% during the forecast period (2023-2029).

During the National coronavirus pandemic prevention and control period, allied governments, enterprises, and institutions were deploying a large number of measures (on the scientific and technological pandemic prevention front such as remote office, remote education, e-commerce life, etc., amid cultivating an emerging customer needs. On a large scale, this has acted as the sole driver for China's IDC (Internet Data Center) industry.

Key Highlights

• China is leaping ahead on the global scale for the construction of data centers, majoring in the increasing demand from enterprises to scale up their data center operations. Enterprises in the region seek reliable and stable data services for the application of IoT, 5G, and other AI-driven spurs demanding high internet computation power. Global tech giants such as Huawei Technologies Co and Apple Inc are stepping up efforts to build data centers in Guizhou province due to its ample power resource and mild climatic condition.
• Chinese Government is stridden into fifth-generation mobile telecommunications technology and the thriving e-commerce sector leveraging the potential of internet data centers, thereby enabling IDCs viable investments for the industry stakeholders. Further, the trend is supported by the emergence of powerhouses such as Tencent Holdings and Huawei Technologies, among others, whose growth drives the construction of IDC facilities in the region. The country capitalizes on the demand for computing power and continues to dominate the list of the world's fastest supercomputers by number.
• For instance, in the previous year, the Ministry of Industry and Information Technology released the Three-Year Action Plan for the development of new data centers, which they are planning by the end of the current year. The national data center rack scale will maintain an average annual growth rate of around 20%, the average utilization rate will strive to increase to over 60%, the total computing power will exceed 200 EFLOPS, and the high-performance computing power will account for 10% by empowering and driving role in the digital economy.
• Additionally, the region is encouraging the adoption of internet technology in private and state businesses, thereby driving disruption in the economy and creating technological leaders. Private and public businesses' proliferation and adoption of digital payment systems drive the demand for IDC infrastructure. Further, it is expected that with the increasing digital transformation of the region, demanding more information processing would drive the growth of data centers.

China Data Center Market Trends

Tier 3 is the largest Tier Type

• Tier 3 data centers are the most preferred due to features such as on-site assistance, power, and cooling redundancy. The segment is expected to grow from 1,115.1 MW in 2022 to 1,874 MW by 2029 at a CAGR of 5.7%. These data centers are mainly chosen by companies for storing and processing business-critical data to cater to their growing business and scalability needs. There are around 110 Tier 3 data centers in the country, and around 37 upcoming data centers are under construction with Tier 3 specifications.
• Tier 4 data centers are the next most preferred by large businesses due to their performance, lower downtime, and 99.99% uptime. These data centers are relatively costly; however, the performance offered by them outweighs the price and supports the competitive and growing needs of large businesses. In 2022, the country had seven Tier 4 data centers owned by Princeton Digital Group and SpaceDC Pte Ltd.
• Tier 1 & 2 data centers are the least preferred due to their higher downtime durations, power and cooling redundancies, and on-site remote assistance. Since these data centers are relatively cheap compared to Tier 3 and Tier 4, small businesses and startup companies prefer them. Since Tier 1 & 2 data centers are the least preferred, stagnant growth could be seen during the forecast period.

China Data Center Industry Overview

The China Data Center Market is moderately consolidated, with the top five companies occupying 60.76%. The major players in this market are China Telecom Corporation Ltd, Chindata Group Holdings Ltd., Equinix, Inc., Space DC Pte Ltd. and Zenlayer Inc (sorted alphabetically).

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