According to Technavio's latest market research report, China's data center market is set to expand by $181.33 billion from 2024 to 2028, demonstrating a compound annual growth rate (CAGR) of 34.28%. The increasing demand for hyper-converged data centers and advancements in server disaggregation are the primary drivers behind this substantial growth.
Key Market Drivers
Hyper-Converged Data Centers
The rising adoption of hyper-converged data centers, which integrate storage, computing, and networking into a unified system, is significantly driving market growth. This integration optimizes resource utilization and improves efficiency, allowing workloads to access precisely the resources they need without necessitating entire server replacements for single-component upgrades.
Technological Advancements
Advancements in server disaggregation, which logically separate server components into memory and compute subsystems, have increased efficiency and reduced power consumption. This trend is crucial as data centers face higher power demands due to the proliferation of cloud computing, AI, machine learning, and IoT workloads. Moreover, the move towards green data centers powered by renewable energy sources such as solar, wind, and hydroelectric power addresses sustainability concerns.
Market Challenges
Data Center Consolidation
The market faces challenges from the growing trend of data center consolidation. As companies shift to Infrastructure-as-a-Service (IaaS) and other cloud-based solutions, the need for traditional data centers diminishes. This consolidation process, while cost-effective, requires meticulous planning to maintain efficiency and capacity.
Major Market Players
Key players in this market include:
- Alibaba Group Holding Ltd.
- AT&T Inc.
- Baidu Inc.
- Beijing Sinnet Technology Co. Ltd.
- China Mobile Ltd.
- China Telecom Corp. Ltd.
- China Unicom Hong Kong Ltd.
- Digital Realty Trust Inc.
- Eaton Corp. Plc
- Equinix Inc.
- Fujitsu Ltd.
- GDS Holdings Ltd.
- Global Switch Ltd.
- Shanghai Dataport Co. Ltd.
- Tencent Holdings Ltd.
- VNET Group Inc.
- Zenlayer Inc.
These companies are making significant investments to expand their data center capacities, addressing the burgeoning demand for digital services.
Market Outlook
Segment Analysis
The report covers extensive market segmentation by component (IT infrastructure, power management, mechanical construction, general construction, and others), end-user (BFSI, telecom and IT, government, energy and utilities, and others), and geography (APAC).
Future Prospects
Despite challenges, the data center market in China presents significant opportunities for growth. The integration of renewable energy, adoption of advanced technologies, and the shift towards modular and micro data centers are expected to drive market expansion. Energy efficiency and sustainability will be key focus areas, aligning with regulatory requirements and market demands.
Technavio's report emphasizes that the rapid growth of e-commerce and digital services in China offers vast opportunities for data center expansion. Innovations in green technologies and the adoption of renewable energy sources are pivotal for the future success of data centers in the region.
Additional Insights
The Data Center Market in China is experiencing robust growth, driven by the increasing demand for digital data and services. The market is characterized by significant investments from both domestic and international companies, expanding storage capacities and enhancing infrastructure to support modern business processes.