The South Korea data center market growth reached USD 4.1 billion in 2024. The market is expected to grow to USD 9.3 billion by 2033, exhibiting a CAGR of 8.6% during the forecast period. This growth is driven by increasing demand for cloud computing services nationwide. More details can be found in the South Korea Data Center Market.

Study Assumption Years

• Base Year: Not provided in source

• Historical Years: Not provided in source

• Forecast Period: Not provided in source

South Korea Data Center Market Key Takeaways

• Current Market Size: USD 4.1 billion in 2024

• CAGR: 8.6%

• Forecast Period: 2025-2033

• The market growth is fueled by the increasing number of smart cities and innovation initiatives by government and private sectors.

• Advancement and expansion of communication infrastructure with ultra-high-speed internet are enlarging the market.

• The metropolitan area is the most active investment region due to the favorable environment.

• Energy-efficient designs are gaining popularity, especially expanding the market in the Yeongnam (Southeast) region.

• Adoption of eco-friendly practices bolsters growth in the Honam (Southwest) region.

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Market Growth Factors

The South Korea data center market is primarily propelled by the rising adoption of cloud computing services nationally. The increased use of cloud-based platforms by enterprises for managing sensitive data and regulatory compliance is driving demand. As the cloud infrastructure expands, the market grows in tandem. Additionally, the number of smart cities is rapidly increasing, and innovation initiatives by government and private sectors continue to promote the market. This environment incentivizes investments and technological advancements in data center infrastructure.

Another significant driver is the expansion of communication infrastructure characterized by ultra-high-speed internet connectivity. This infrastructure growth facilitates data transfer and business operations, driving demand for advanced data centers. The push for energy efficiency and sustainability is also propelling market growth. Data centers are integrating advanced cooling and energy management techniques, including the adoption of renewable energy sources and eco-friendly practices.

The market benefits from regional developments, particularly in metropolitan areas and strategic industrial zones. The greater Seoul metropolitan area leads investment activities with favorable conditions for data center construction. The Yeongnam region is expanding due to energy-efficient designs, while the Honam region is gaining momentum with sustainable practices. However, concerns regarding high energy consumption pose challenges, although extensive integration of renewable energy is projected to mitigate these over time, supporting further market expansion.

Market Segmentation

Data Center Size:

• Large: Typically serve large enterprises and cloud providers with extensive computing and storage capabilities.

• Massive

• Medium: Target regional enterprises and service providers.

• Mega: Set up to support increasing demand for digital content and cloud services, incorporating advanced cooling and energy-saving technologies.

• Small: Usually serve specific industries or regional businesses focusing on low latency and proximity.

Tier Type:

• Tier 1 and 2: Widely used by small enterprises or less critical applications, limited redundancy, and lower uptime guarantee.

• Tier 3: Balance between reliability and cost, widely deployed in South Korea, with multiple power and cooling paths.

• Tier 4: Deliver highest security and reliability, designed for zero downtime with fully redundant infrastructure and fault-tolerant systems.

Absorption Type:

• Unutilized

• Utilized:

• Colocation Type:

• Hyperscale: For large tech firms and cloud providers offering massive capacity and scalability.

• Retail: Cost-effective and flexible solutions for small businesses.

• Wholesale: Suitable for mid-sized companies offering a middle ground.

• End User:

• BFSI

• Cloud

• E-commerce

• Government

• Manufacturing

• Media and Entertainment

• Telecom

• Others

Region:

• Seoul Metropolitan Area

• Yeongnam (Southeast Region)

• Honam (Southwest Region)

• Hoseo (Central Region)

• Others

Regional Insights

The metropolitan area, particularly Seoul and surrounds, is the dominant region in South Korea's data center market due to its conducive investment environment. The Yeongnam region is expanding with energy-efficient data center designs, while the Honam region is gaining momentum through increased adoption of eco-friendly practices. These developments collectively contribute to the rising demand across key regions.

Recent Developments & News

In September 2024, Empirion Digital entered into a binding contract with Japan's largest diversified financial services group to develop a 25MW AI-powered data center, highlighting a positive outlook for the market. In August 2024, Korea Investment Real Assets Management partnered with Indonesia's conglomerate Sinar Mas to establish a hyper-scale data center worth USD 300 million in Jakarta's central business district, expanding South Korea's market presence. In February 2024, Korean regulators announced plans for a 1GW data center hub near Donghae and Gangneung, capable of housing up to 50 data centers, in regions known for nuclear and coal-fired power plants.

Key Players

• Empirion Digital

• Korea Investment Real Assets Management

• Sinar Mas

Customization Note

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