China Data Center Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2030)

Key Highlights

• The upcoming IT load capacity in the country is projected to cross 3,400 MW by 2030, boosting the demand for data center racks.
• The construction of raised floor area for data centers in the country is expected to reach 12.5 million sq. ft by 2030 for under construction raised floor space.
• The country's total number of installed racks will reach 620k units by 2030.
• Currently, five submarine cable projects are under construction in the country. One such submarine cable is Asia Direct Cable (ADC), stretching over 9,800 kilometers with landing points in Chung Hom Kok, China, and Shantou, China, expected to come into service from Q4 2024.

China Data Center Construction 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 around 1300 MW in 2023 to 1,900 MW by 2030. Companies mainly choose these data centers for storing and processing business-critical data to cater to growing business and scalability needs. The country has around 110 tier 3 data centers, and around 37 upcoming data centers are under construction with tier 3 specifications.
• Shanghai hosts the country's maximum number of tier 3 data centers, with a market share of 28.9%, followed by Beijing at 26.3% and Guangdong at 20.2%.
• In 2023, GDS Service Co. Ltd had around 70 data centers with Tier 3 certification, followed by Chindata Group Holdings Ltd with 15 data center facilities and China Telecom Corporation Ltd with 10 data center facilities.
• Thirty-seven data center facilities under construction are being built with tier 3 standards and are expected to operate during the forecast period. Major players involved in tier 3 DC construction are Princeton Digital Group, GDS Service Co. Ltd, and Chindata Group Holdings. The construction is projected to be more concentrated in the Hebei region, followed by Beijing, Shanghai, and Jiangsu.
• Chindata Group has unveiled CN 23, a 26 MW hyperscale project set in a Zhangjiakou City, Hebei Province campus. The project is slated for delivery in Q1 of 2025 and is tailored for a prominent international client, designed to meet tier 3 standards. Such instances in the market are expected to create more demand for market growth in the coming years.

The IT and Telecommunications Segment is Expected to Hold the Major Share

• The Chinese government's 14th Year Plan drives initiatives to boost digital services. It prioritizes research in cutting-edge technologies like 6G, integrated circuits, and AI. These efforts are strategically aligned to meet China's rising demand for cloud computing services.
• The Chinese cloud market is poised to triple in value, surging from USD 30 billion in 2021 to a projected USD 90 billion by 2025, driven by escalating demands for cloud services. These services, encompassing software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS), are directly accessible to end users.
• Users increasingly favor cloud services for their enhanced scalability. This allows them to adjust their networks, storage, and servers to meet specific business needs, such as China's Singles Day, a major shopping event. Websites offer enticing deals that draw in massive traffic and transactions. Cloud infrastructure makes managing this surge seamless, ensuring optimal performance.
• Cloud computing delivers services like additional computing power and data storage to clients through a web-based infrastructure. This cost-effective cloud infrastructure contrasts with traditional systems, which require large server farms and costly storage setups in data centers.
• Further, industries like gaming, video production, and mobile internet increasingly depend on the Cloud IaaS platform. With businesses shifting to cloud services for their swiftness, cost-effectiveness, and adaptability, the demand for cloud services has surged in tandem.
• According to data from the Ministry of Industry and Information Technology, in terms of telecommunication, by 2024, China's 5G network will blanket every city, town, and over 90% of its villages. The country boasts a dominant information and communication network, spearheaded by a staggering 3.84 million 5G base stations, representing over 60% of the world's total. Such instances in the market are expected to create more demand for data centers, thereby boosting the data center construction market.

China Data Center Construction Industry Overview

• SpaceDC, a forward-thinking data center provider headquartered in Singapore, has forged a strategic partnership with Centrin Data, a prominent tier 4 data center and network provider across China. This collaboration entails joint efforts to market Centrin Data's data centers and services within China, notably spotlighting Wuhan and Kunshan facilities, which boast a robust clientele in the financial sector. These data centers span a combined area of 206,532.41 m2 and can accommodate up to 40,000 racks. The development is planned in two stages, aiming for a total capacity of 225 MW, with the initial phase set at 70 MW. The facility is expected to come into operation during the forecast period.

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• The market estimate (ME) sheet in Excel format
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