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Japan Data Center Market Set for Exponential Growth with $11.44 Billion Investment by 2028 - Arizton

Japan is among the top and established data center markets in the APAC region which comes in the fifth position after China, Australia, India and Singapore in terms of data center investment in the APAC region in 2022.
Published 28 February 2024

CHICAGO, June 7, 2023 /PRNewswire/ -- According to Arizton's latest research report, the Japan data center market will grow at a CAGR of 5.93% during 2022-2028.

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Japan Data Center Market Report by Arizton

Japan is among the APAC region's developed and established data center markets. Japan is also considered a global financial center due to its global connectivity. The country is economically strong and is among the leaders in technology, robotics, and machine learning. The government is taking several initiatives to bring the country to the forefront in the APAC region.

Despite high land & electricity prices and one of the most expensive markets in the APAC region, operators have remained confident and continuously invested.

Data center investments in Japan over the next 2-3 years expect to be aggressive and high due to investment from several operators and the entry of new operators in the market. The market is attracting hyperscale operators to develop their own data centers in the country.

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Key Insights

The Japan data center market is one of the APAC region's most developed and technologically advanced data center markets. It is in the top hot form witnessing several new investments from local and global operators. Besides the colocation operators, the country witnessed new investments from hyper-scaler Google. The company is developing its self-built facility in Inzai City, which is expected to be online by 2023. Japan has over 100 operational colocation data centers. Most colocation facilities are being developed according to Tier III standards. For instance, Digital Edge opened its n facility OSA1 in Osaka, certified as Tier III.

The government is more focused on promoting local enterprises; hence, foreign companies could face several challenges while setting up a business. The country is also witnessing improvement in submarine and inland connectivity. For instance, Topaz, Apricot, and Southeast Asia-Japan Cable 2 (SJC2) are some submarine cables under development that will connect Japan with the U.S., Canada, and other APAC countries. Significant deployment and adoption of 5G services in Japan will fuel data traffic and further grow the demand for more data centers. For instance, Edge Centres has planned to develop a new edge facility in Okinawa. The increasing trend of procuring renewable energy to power the facilities in the country is likely to continue during the forecast, which will contribute to the country's goal of becoming carbon neutral by 2050.

Why Should You Buy This Research?

  • Market size available in the investment, area, power capacity, and Japan colocation market revenue.
  • An assessment of the data center investment in Japan by colocation, hyperscale, and enterprise operators.
  • Investments in the area (square feet) and power capacity (MW) across states in the country.
  • A detailed study of the existing Japan data center market landscape, an in-depth industry analysis, and insightful predictions about industry size during the forecast period.
  • Snapshot of existing and upcoming third-party data center facilities in Japan
  • Facilities Covered (Existing): 100+
  • Facilities Identified (Upcoming): 25
  • Coverage: 18+ Locations
  • Existing vs. Upcoming (Area)
  • Existing vs. Upcoming (IT Load Capacity)
  • Data center colocation market in Japan
  • Colocation Market Revenue & Forecast (2022-2028)
  • Wholesale vs Retail Colocation Revenue (2022-2028)
  • Retail Colocation Pricing
  • Wholesale Colocation Pricing
  • The Japanese market investments are classified into IT, power, cooling, and general construction services with sizing and forecast.
  • A comprehensive analysis of the latest trends, growth rate, potential opportunities, growth restraints, and prospects for the industry.
  • Business overview and product offerings of prominent IT infrastructure providers, construction contractors, support infrastructure providers, and investors operating in the industry.
  • A transparent research methodology and the analysis of the demand and supply aspects of the industry.

Several new companies and operators have either opened data centers or planned to enter the data center market in Japan

  • In March 2023, Digital Edge partnered with Hulic, a local real estate firm, to build a new data center facility, TY07, in Tokyo. However, the company didn't share the project specifications, but the facility is likely to be operational by Q1 2025.
  • Australia-based Edge data center company Edge Centres has planned its first edge facility, EC81, in Okinawa, Japan. The facility is still in the planning stage and will likely be operational by Q2 2023.
  • NEXTDC, an Australian data center company, is undergoing a major expansion stage wherein the company has planned to expand beyond Australia. The company plans to set up its first data center facility, TK1, in Tokyo. However, there are no specifications and timelines available for the project as it is still under planning.
  • In December 2022, STACK Infrastructure partnered with ESR to develop a new data center campus, KIX01, in Osaka. The campus will have three data center buildings, of which the construction of the first building is likely to begin in Q4 2023 and go online in Q2 2025. Also, in January 2022, the company announced its plan to develop a new data center campus in Tokyo.
  • Yondr is among the potential data center operators likely to enter the Japanese data center market during the forecast period. The company has planned a data center in Tokyo.
  • In June 2021, Princeton Digital Group (PDG) announced its plan to invest around $1 billion to build a hyperscale data center campus in Tokyo, Japan. In June 2022, the company and Lendlease announced the commencement of the TY1 or PDG Saitama data center in Tokyo. The first phase is expected to be online by 2024.
  • ST Telemedia Global Data Centres is among the new entrants in the Japanese data center market, with a plan to develop two data center facilities in Tokyo. Goodman, an Australian property firm, will build and develop the facilities. The first building of the planned facilities is expected to be online by Q2 2024.

The report includes the investment in the following areas:

  • IT Infrastructure
  • Servers
  • Storage Systems
  • Network Infrastructure
  • Electrical Infrastructure
  • UPS Systems
  • Generators
  • Switches & Switchgears
  • PDUs
  • Other Electrical Infrastructure
  • Mechanical Infrastructure
  • Cooling Systems
  • Rack Cabinets
  • Other Mechanical Infrastructure
  • Cooling Systems
  • CRAC and CRAH Units
  • Chiller Units
  • Cooling Towers, Condensers, and Dry Coolers
  • Economizers and Evaporative Coolers
  • Other Cooling Units
  • General Construction
  • Core & Shell Development
  • Installation & Commissioning Services
  • Building & Engineering Design
  • Fire Detection & Suppression Systems
  • Physical Security
  • Data Center Infrastructure Management (DCIM)
  • Tier Standard
  • Tier I & Tier II
  • Tier III
  • Tier IV

Major Vendors

IT Infrastructure Providers

  • Arista Networks
  • Atos
  • Broadcom
  • Cisco Systems
  • Dell Technologies
  • Fujitsu
  • Hewlett Packard Enterprise
  • Hitachi Vantara
  • Huawei Technologies
  • IBM
  • Inspur
  • Lenovo
  • NEC
  • NetApp
  • Oracle

Data Center Construction Contractors & Sub-Contractors

  • Arup
  • Daiwa House Industry
  • Fuji Furukawa Engineering & Construction
  • Hibiya Engineering
  • ISG
  • Kajima Corporation
  • Keihanshin Building
  • Linesight
  • Meiho Facility Works
  • Nikken Sekkei
  • Obayashi Corporation
  • SHINRYO Corporation
  • TAISEI Corporation

Support Infrastructure Providers

  • 3M
  • ABB
  • Alfa Laval
  • Caterpillar
  • Cummins
  • Delta Electronics
  • Eaton
  • Fuji Electric
  • HITEC Power Protection
  • Johnson Controls
  • Kawasaki Heavy Industries
  • Legrand
  • Mitsubishi Electric
  • Rittal
  • Rolls-Royce
  • Schneider Electric
  • Siemens
  • Vertiv

Data Center Investors

  • AirTrunk
  • Alibaba Cloud
  • ARTERIA Networks
  • Colt Data Centre Services (Colt DCS)
  • Digital Edge
  • Equinix
  • Fujitsu
  • Google
  • IDC Frontier
  • Internet Initiative Japan (IIJ)
  • MC Digital Realty
  • NTT Communications
  • SCSK Corporation (netXDC)
  • Telehouse
  • Tencent Cloud
  • TIS INTEC Group

New Entrants

  • CyrusOne
  • Edge Centres
  • ESR
  • Princeton Digital Group
  • STACK Infrastructure
  • ST Telemedia Global Data Centres
  • Vantage Data Centers

Table of Content

CHAPTER 1: Existing & Upcoming Third-Party Data Centers in Japan

1.1. Historical Market Scenario

1.2. 100+ Unique Data Center Properties

1.3. Data Center IT Load Capacity

1.4. Data Center White Floor Area

1.5. Existing Vs Upcoming Data Center Capacity by Cities

1.6. Cities Covered

1.6.1. Tokyo

1.6.2. Osaka

1.6.3. Other Cities

1.7. List of Upcoming Data Center Projects

CHAPTER 2: Investment Opportunities in Japan

2.1. Microeconomic and Macroeconomic factors For Japan Market

2.2. Investment Opportunities in Japan

2.3. Investment by Area

2.4. Investment by Power Capacity

CHAPTER 3: Data Center Colocation Market in Japan

3.1. Demand Across Several Industries in Japan

Colocation Services Market in the Japan

3.2. Retail vs Wholesale Data Center Colocation

3.3. Colocation Pricing (Quarter Rack, Half Rack, Full Rack) & Add-ons

CHAPTER 4: Market Dynamics

4.1. Market Drivers

4.2. Market Trends

4.3. Market Restraints

CHAPTER 5: Market Segmentation

5.1. IT Infrastructure: Market Size & Forecast

5.2. Electrical Infrastructure: Market Size & Forecast

5.3. Mechanical Infrastructure: Market Size & Forecast

5.4. Break-up of Construction Cost 2022

5.5. General Construction Services: Market Size & Forecast

CHAPTER 6: Tier Standard Investment

6.1. Tier I & II

6.2. Tier III

6.3. Tier IV

CHAPTER 7: Geography

7.1. Tokyo

7.2. Osaka

7.3. Other Cities

CHAPTER 8: Key Market Participants

8.1. IT Infrastructure Providers

8.2. Construction Contractors

8.3. Support Infrastructure Providers

8.4. Key Data Center Investors

8.5. New Entrants

CHAPTER 9: Appendix

9.1. Market Derivation

9.2. Quantitative Summary

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