The South Korea data center market size was valued at USD 4.1 Billion in 2024 and is projected to reach USD 9.3 Billion by 2033. The market is expected to grow at a CAGR of 8.6% during the forecast period 2025-2033. This expansion is primarily driven by the increasing demand for cloud computing services across South Korea. The market encompasses various data center sizes, tier types, and absorption types, supporting the rising digital and smart city infrastructure needs in the country. Study Assumption Years

• Base Year: 2024

• Historical Year/Period: 2019-2024

• Forecast Year/Period: 2025-2033

South Korea Data Center Market Key Takeaways

• Current Market Size: USD 4.1 Billion in 2024

• CAGR: 8.6% (2025-2033)

• Forecast Period: 2025-2033

• The rising number of smart cities is propelling market growth.

• Significant transformation initiatives by government and private enterprises boost the market.

• Expansion of telecommunications infrastructure with high-speed internet connectivity is a key trend.

• Growing emphasis on energy-efficient designs and eco-friendly practices enhances market adoption.

• Increasing concerns over managing high energy consumption pose challenges, mitigated by renewable energy integration.

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Market Growth Factors

The South Korea data center market growth is largely fueled by the rising number of smart cities throughout the country. Government entities and private enterprises are undertaking digital transformation initiatives, which significantly elevate the demand for advanced data center services and infrastructure. These developments enable enhanced connectivity and digital service delivery, thus creating a vibrant environment for data center investments.

Additionally, the expanding telecommunications infrastructure characterized by high-speed internet connectivity plays a pivotal role in market expansion. This advanced infrastructure supports the increasing need for reliable and fast data processing capabilities required by various sectors. The demand for high-density data centers that maximize data processing within smaller physical footprints using sophisticated cooling and energy management technologies further augments market growth.

Sustainability practices also contribute notably to the market’s growth trajectory. The emphasis on renewable energy sources, driven by environmental awareness and strict regulations, promotes energy-efficient data center designs that align with global sustainability goals. Notably, the government’s plan to establish a 1-gigawatt data center hub near Donghae and Gangneung cities reflects this trend. Adoption of hybrid cloud solutions by businesses globally for flexibility and regulatory compliance additionally strengthens the market outlook.

Market Segmentation

Breakup by Data Center Size:

• Large

• Massive

• Medium

• Mega

• Small

Large and massive data centers typically serve major corporations and cloud providers by offering extensive computing and storage. Medium-sized centers cater to regional enterprises. Mega centers support high digital content and cloud demand with advanced cooling and energy efficiency. Small centers focus on specialized services for specific industries and local businesses, providing low latency and proximity.

Breakup by Tier Type:

• Tier 1 and 2

• Tier 3

• Tier 4

Tier 1 and 2 data centers primarily support smaller businesses or less critical applications with limited redundancy. Tier 3 centers balance reliability and cost with multiple power and cooling paths for consistent performance. Tier 4 facilities offer the highest security and reliability through fully redundant, fault-tolerant infrastructure designed for zero downtime.

Breakup by Absorption:

• Non-Utilized

• Utilized

Colocation Type:

• Hyperscale

• Retail

• Wholesale

End User:

• BFSI

• Cloud

• E-Commerce

• Government

• Manufacturing

• Media and Entertainment

• Telecom

• Others

Non-utilized spaces refer to areas not yet leased or activated. Hyperscale data centers cater to large cloud providers with vast scalability. Retail colocation serves smaller enterprises seeking flexible solutions, while wholesale colocation addresses medium-sized business needs.

Breakup by Region:

• Seoul Capital Area

• Yeongnam (Southeastern Region)

• Honam (Southwestern Region)

• Hoseo (Central Region)

• Others

The Seoul Capital Area leads data center investment attraction. Yeongnam includes strategic industrial cities like Daegu and Busan. Honam is emerging as an attractive location for data centers. Hoseo, including Sejong and Daejeon, serves as a hub for research institutions, boosting regional market demand.

Regional Insights

The dominant region in the South Korea data center market is the Seoul Capital Area, noted for its conducive investment environment. Additionally, Yeongnam (Southeastern Region) benefits from its proximity to industrial zones, while Honam (Southwestern Region) and Hoseo (Central Region) are growing in prominence due to eco-friendly practices and institutional research, respectively. These regions collectively support the overall market growth and infrastructure expansion.

Recent Developments & News

In September 2024, Empyrion Digital signed a binding agreement with one of Japan’s largest diversified financial services groups to develop a 25MW AI-ready data center, boosting the market outlook. In August 2024, South Korea Investment Real Asset Management Co. partnered with Indonesian conglomerate Sinar Mas in a joint venture to construct a hyperscale data center in Jakarta’s central business district, valued at US$300 Million. Earlier in February 2024, South Korean regulatory authorities announced plans for a 1-gigawatt data center hub near Donghae and Gangneung capable of hosting up to 50 data centers with an average 20MW capacity each.

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Key Players

Competitive Landscape

The competitive landscape of the industry has also been examined along with the profiles of the key players.

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