New Delhi, Nov. 27, 2024 (GLOBE NEWSWIRE) -- According to the latest Astute Analytica study, the Japan data center market was valued at US$ 9.9 billion in 2024 and is projected reach US$ 34.0 billion by 2035 at a CAGR of 11.78% during the forecast period 2024–2035.
Japan's data center market landscape is on a trajectory of remarkable growth, driven by escalating digital demands and strategic expansions. As of 2024, the nation's data center capacity has reached a significant milestone, boasting an IT load capacity of approximately 1,688.5 MW. The infrastructure supporting this capacity includes 8.04 million square feet of raised floor space and 402,037 installed racks, indicating a well-developed foundation for digital infrastructure. Tokyo, the primary hub, commands nearly 60% of this capacity, underscoring its pivotal role in the country's data center dynamics. The demand for enhanced digital services, cloud computing, and AI technologies is accelerating growth, with projections suggesting capacity will surge to 2,151.53 MW by 2029—CAGR of 4.97%.
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Looking forward, Japan's data center market is set to expand dramatically, with plans to nearly double its capacity in the coming years. The market is expected to grow from about 1.4 GW in 2023 to an impressive 2.4 GW by 2028. This growth is not confined to Tokyo alone; regions such as Osaka and Tatebayashi are emerging as significant contributors to this expansion, offering strategic locations for data center development. The upcoming projects reflect this shift, with projections forecasting that Japan's total data center capacity will surpass 2 GW, nearly doubling the current levels . This expansion is driven by increasing demands for cloud services and AI, alongside the Japanese government's push for decentralized data infrastructure to bolster regional digital capabilities.
Key industry players in Japan data center market are at the forefront of this growth, investing heavily in new facilities and technological advancements. Equinix, for instance, recently launched its 15th International Business Exchange (IBX) data center in Tokyo, marking a substantial US$ 115 million investment. Similarly, NTT Corporation is investing YEN 40 billion to construct the Keihanna Data Center in Kyoto Prefecture, further enhancing the country's digital infrastructure. These investments are complemented by strategic government initiatives aimed at enhancing connectivity and decentralizing submarine cable landing bases, thereby fostering a more resilient and widespread data network across Japan. As these developments unfold, Japan is poised to solidify its position as a leading data center market in the Asia-Pacific region, characterized by robust growth, innovation, and a keen focus on sustainability. This strategic expansion is critical to meeting the growing demands of digital transformation, positioning Japan at the forefront of global data infrastructure development.
Key Findings in Japan Data Center Market
| Market Forecast (2035) | US$ 34.0 billion |
| CAGR | 11.78% |
| By Component | Hardware (42.50%) |
| By Type | Colocation (32.78%) |
| By Tier Standard | Tier 3 (36.92%) |
| By Enterprise Size | Large Enterprises (71.63%) |
| By Industry Verticals | IT & Telecom (23.68%) |
| Top Drivers |
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| Top Trends |
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| Top Challenges |
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Dynamic Shifts in Japan's Data Center Market: Decentralization, Sustainability, and Technological Advancements
Japan's data center industry is undergoing significant transformation, driven by strategic investment trends and evolving market dynamics. A notable trend is the decentralization of data centers from traditional hubs like Tokyo and Osaka to emerging regions such as Hokkaido and Kyushu. This shift is bolstered by government incentives aimed at regional development, which not only alleviates pressure on existing infrastructure but also promotes economic growth in less developed areas. By spreading data center facilities across the country, Japan is enhancing its resilience and ensuring more balanced economic development.
In line with global environmental priorities, there is an increasing emphasis on building sustainable and energy-efficient data centers in Japan. This focus in the data center market includes the integration of renewable energy sources, which not only reduces carbon footprints but also aligns with Japan's broader green growth strategies. The commitment to sustainability reflects a growing recognition of the environmental impact of digital infrastructure and a proactive approach to mitigating these effects. This trend is crucial as data centers are significant consumers of energy, and their environmental impact is a critical concern for both operators and policymakers.
Moreover, the landscape of data center market in Japan is characterized by the growth of colocation and hyperscale developments. The country boasts around 107 operational colocation data centers, and there is a clear trend of hyperscalers constructing self-built facilities in collaboration with real estate developers. This development is driven by the need for scalable and flexible data solutions to accommodate the rapid expansion of digital services. Additionally, the deployment of 5G networks and the advancement of smart city initiatives are further propelling demand for high-bandwidth networking infrastructure and data centers. These initiatives require robust and efficient data handling capabilities, underscoring the critical role of data centers in Japan's digital future.
Ongoing and Planned Projects Japan in Data Center Market
Japan is witnessing a surge in data center construction projects, with both local and international players making significant investments. Some of the major projects include:
- GLP's Tokyo West 1 Campus: A three-building campus with a total IT load of 31 MW, with the first phase expected to be operational by February 2025.
- Empyrion Digital's JP1 Facility: A 25 MW carrier-neutral data center planned in central Tokyo, with construction expected to start in 2025.
- STACK Infrastructure's Tokyo Campus: A 36 MW flagship campus in Tokyo's Inzai District, with one facility completed and a second 18 MW building under development.
- Digital Realty's Inzai Data Center: A new data center outside Tokyo, marking Digital Realty's third facility in the area.
- ESR's Osaka Data Center: The first phase of a flagship project in Osaka with a capacity of 25 MW, with plans for a 60 MW facility in Tokyo.
- NTT and TEPCO Joint Venture: A 50 MW data center in the Inzai-Shiroi area of Greater Tokyo, part of NTT's global expansion strategy.
- SC Capital in Osaka: Two data centers in Osaka with an estimated investment of US$ 660 million, with the first facility expected to open in 2027.
- SoftBank and IDC Frontier in Hokkaido: A new data center facility in Tomakomai City, Hokkaido, involving an investment of approximately US$420 million.
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Leading Titans in Japan's Data Center Market Landscape: NTT, AWS, and Microsoft
NTT Data, in conjunction with its parent company NTT, stands as a formidable force in Japan's data center market with over 20.28% market share, renowned for its extensive infrastructure and strategic investments. The company's leadership is underscored by its provision of large-scale, build-to-suit wholesale data center solutions, including private vaults and dedicated cages, catering to diverse client needs. NTT's ambitious investment plan involves committing 1.5 trillion yen (approximately $12 billion) over five years to expand and upgrade its data center business globally. This includes significant capacity expansion projects such as a joint venture with TEPCO Power Grid to develop data centers in the Greater Tokyo area, with a planned total IT load of 50MW, and the construction of the Keihanna Data Center in Kansai, adding 30MW of capacity. NTT's deep integration into Japan's telecommunications infrastructure, combined with strategic endeavors like its partnership with TEPCO to create efficient, carbon-neutral data centers, highlights its leadership. Furthermore, NTT's commitment to achieving net-zero emissions and sourcing 100% renewable energy by 2030 enhances its market position, aligning with global sustainability trends.
Amazon Web Services (AWS) maintains a dominant position in Japan's cloud market driven by significant investments and technological advancements. As the leading cloud provider with a market share of 31.9%, AWS in the data center market has announced a $15.24 billion investment plan to expand its cloud infrastructure in Japan by 2027. This substantial investment is expected to contribute approximately 5.57 trillion yen to Japan's GDP and support an average of 30,500 full-time equivalent jobs annually. AWS operates data centers in both Tokyo and Osaka, with multiple availability zones, and has been active in introducing cutting-edge technologies such as Amazon Bedrock for generative AI in the Tokyo region. These investments and technological initiatives underscore AWS's commitment to maintaining its leadership in the cloud services sector, capitalizing on Japan's growing demand for digital infrastructure.
Microsoft Azure, as the second-largest cloud provider in Japan data center market, holds a substantial market share, backed by significant investments and strategic initiatives in AI and cloud technologies. Microsoft's recent announcement of a $2.9 billion investment over two years focuses on expanding its hyperscale cloud computing and AI infrastructure in Japan, marking its largest financial commitment in the country. This investment includes the development and expansion of data centers, with a focus on installing advanced AI semiconductors at two existing facilities in eastern and western Japan. Additionally, Microsoft plans to establish a new lab in Tokyo under Microsoft Research Asia, focusing on robotics and AI, and aims to train 3 million people in Japan through an AI-related reskilling program. These initiatives reflect Microsoft's strategic focus on enhancing its technological capabilities and workforce development, reinforcing its competitive position in Japan's data center and cloud services market.
Japan Data Center Market Key Players:
- Amazon Inc.
- Cisco Systems, Inc.
- Dell Technologies
- Google LLC
- Hewlett Packard Enterprise Development LP
- IBM Corporation
- Microsoft Corporation
- N+ONE Data Centers
- NTT DATA, Inc.
- Oracle Corporation
- SAP SE
- Other Prominent Players
Key Segmentation:
By Component
- Hardware
- Servers
- Blade servers
- Rack servers
- Tower servers
- Micro servers
- Storage Systems
- Storage Area Network (SAN)
- Network-Attached Storage (NAS)
- Direct-Attached Storage (DAS)
- Cloud storage
- Power and Cooling Systems
- Power Supply
- Uninterruptible Power Supply (UPS) systems
- Generators
- Power distribution units (PDUs)
- Cooling Solutions
- Air conditioning units
- Liquid Cooling Systems
- Advanced Cooling Technologies
- Power Supply
- Racks and Enclosures
- Open frame racks
- Enclosed Racks
- Customized Enclosures
- Servers
- Software
- Data Centre Management Software
- Virtualization Software
- Security Software
- Services
- Professional & Managed
- Training & Support
By Data Centre Type
- Colocation
- Hyperscale
- Edge
- Cloud- Based
- Enterprise
- Managed
By Tier Standard
- Tier 1
- Tier 2
- Tier 3
- Tier 4
By Enterprise Size
- Small and Medium-Sized Enterprises (SMEs)
- Large Enterprises
By Industry Vertical
- Banking, Financial Services, and Insurance (BFSI)
- IT and Telecom
- Government and Defense
- Healthcare
- Energy
- Manufacturing
- Retail
- Media and Entertainment
- Others (education, transportation, etc.)
Browse the Table of Contents to access and purchase individual report sections: https://www.astuteanalytica.com/industry-report/toc/japan-data-center-market
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