Authored By: Sarah
24 Jan 2025

China Data Center Market Forecast 2024-2028: A Comprehensive Overview

The China data center market is poised for significant growth, with projections indicating an increase of USD 181.33 billion from 2023 to 2028, achieving a robust CAGR of 34.28%. This growth is driven by the rising demand for hyper-converged infrastructure, cloud storage solutions, and supercomputing capabilities. As China’s digital landscape continues to evolve, organizations are investing heavily in data center technologies to meet the growing data storage and processing demands. Here, we explore the key factors influencing this expansion, market segmentation, regional trends, major players, and emerging trends in the China data center market.

data center market in china 2024-2028

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Market Drivers and Dynamics

Several factors are driving the growth of China’s data center market:

  1. Hyper-Converged Infrastructure: The increasing demand for scalable and efficient data storage solutions has led to the growing adoption of hyper-converged infrastructure (HCI). This technology, which integrates storage, computing, and networking, is becoming a standard for organizations looking to optimize data center operations.

  2. Cloud Storage and Computing: With businesses and consumers relying more on cloud storage for data management, the demand for data centers equipped to support these services continues to rise. Cloud computing enables organizations to scale their infrastructure quickly and cost-effectively.

  3. Supercomputing and Data Processing: The need for rapid data processing and analytics, especially in industries like finance, healthcare, and artificial intelligence (AI), is fueling demand for supercomputing infrastructure within data centers.

  4. Energy Efficiency and Sustainability: As data centers consume substantial amounts of electricity, the industry is turning to green solutions like renewable energy sources (e.g., solar, wind, and hydroelectric power). The push towards energy-efficient data centers is also driven by regulatory mandates, particularly those from the Department of Energy.

  5. Artificial Intelligence and Machine Learning: The integration of AI and ML technologies into data center operations enhances automation and improves asset performance management. These technologies are expected to continue shaping the future of data centers in China.

Market Segmentation

The China data center market is segmented across several key components and end-user industries:

By Component

  1. IT Infrastructure: This segment remains the largest, as the growing demands for data storage and processing push businesses to invest in servers, storage systems, and networking solutions.

    • Servers: Essential for running advanced technologies like AI and ML, the demand for servers continues to rise.
    • Storage Systems: As businesses store more data, efficient storage solutions are increasingly in demand.
    • Networking Solutions: Enhanced connectivity and high-speed networks are critical for ensuring smooth data transmission and operations.
  2. Power Management: With the energy demands of data centers escalating, power management solutions play a key role in maintaining operational efficiency while minimizing environmental impact.

  3. Mechanical and General Construction: Mechanical systems, such as cooling and ventilation, along with general construction services, are critical for maintaining the physical infrastructure of data centers.

  4. Others: This category includes components that contribute to data center infrastructure but fall outside of the primary segments.

By End-User

  1. BFSI (Banking, Financial Services, and Insurance): Financial institutions require robust data centers for secure data storage, processing, and analysis.
  2. Telecom and IT: Telecom operators and IT service providers rely on data centers for networking and cloud services.
  3. Government: Government agencies require secure and scalable data storage for public services and national security.
  4. Energy and Utilities: Companies in this sector rely on data centers for monitoring and controlling infrastructure, including renewable energy operations.
  5. Others: This includes sectors such as e-commerce, healthcare, and education, all of which require data center services for various operations.

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Key Market Players

The China data center market is highly competitive, with several global and domestic players shaping the landscape:

  • Alibaba Group Holding Ltd.
  • AT and T Inc.
  • Baidu Inc.
  • Beijing Sinnet technology Co. Ltd.
  • China Mobile Ltd.
  • China Telecom Corp. Ltd.
  • China Unicom Hong Kong Ltd.
  • CICC Data Group Co. Ltd.
  • Digital Realty Trust Inc.
  • Eaton Corp. Plc
  • Equinix Inc.
  • Fujitsu Ltd.
  • GDS Holdings Ltd.
  • Global Switch Ltd.
  • Shanghai Dataport Co. Ltd.
  • Telstra Corp. Ltd.
  • Tencent Holdings Ltd.
  • VNET Group Inc.
  • Wangsu Science and Technology Co. Ltd.
  • Zenlayer Inc.

These companies are utilizing various strategies, such as strategic alliances, mergers, and geographic expansion, to strengthen their market presence. With the rapid growth of cloud services, these companies are expanding their offerings to meet the increasing demand for data storage, high-speed connectivity, and energy-efficient infrastructure.

Technological Trends and Challenges

The integration of next-gen technologies is a key focus area in China’s data center market. Some of the leading trends and challenges include:

  1. Green Data Centers: The growing emphasis on reducing energy consumption and lowering carbon footprints has led to the rise of green data centers that leverage renewable energy and energy-efficient systems.

  2. Edge Computing: As more devices connect to the internet and generate data, edge computing is becoming increasingly popular. Edge data centers process data closer to its source, reducing latency and improving operational efficiency.

  3. Micro Data Centers: Smaller, modular data centers are gaining popularity due to their portability, cost-effectiveness, and ability to support remote or smaller-scale operations.

  4. Data Security: As data breaches and cyber threats continue to rise, companies are prioritizing robust security measures, including advanced encryption, surveillance, and multi-layered access control.

  5. Regulatory Compliance: With stringent data protection laws, businesses must ensure that their data centers comply with local regulations regarding data storage, processing, and security.

Regional Adoption and Market Outlook

The adoption lifecycle of data center solutions in China varies across regions, with innovation hubs like Beijing and Shanghai leading the way in terms of cloud adoption and data center infrastructure. Additionally, the increased penetration of 5G networks and the growing trend of remote work are set to drive further demand for data centers in the coming years. As companies continue to adopt AI, ML, and cloud computing, demand for enhanced data storage and processing capabilities is expected to surge.

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