New Delhi, Sept. 10, 2024 (GLOBE NEWSWIRE) -- The global hyperscale data center market is expected to reach US$ 177.58 billion by 2032, up from US$ 111.57 billion in 2023 at a CAGR of 5.3% during the forecast period, 2024–2032.
As of early 2024, the global hyperscale data center market has surpassed 1,000 facilities, up from 992 at the end of 2023. The United States leads with approximately 530 centers, followed by China and Japan, each contributing significantly to the total capacity. Europe also maintains a substantial presence, with key facilities spread across countries like Germany, Ireland, and the Netherlands. North America continues to dominate the market, driven by the rising demand for cloud services, artificial intelligence, and big data analytics. Asia-Pacific is rapidly expanding, with countries like India and South Korea investing heavily in new data center infrastructures. By the end of 2025, it is projected that Asia-Pacific will host over 300 hyperscale centers, reflecting its growing influence in this sector.
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Amazon Web Services, Microsoft Azure, and Google Cloud are at the forefront of this expansion in the hyperscale data center market, collectively responsible for a significant portion of the capacity. Amazon has announced a monumental $150 billion investment over the next 15 years, marking one of the largest commitments in the sector. Microsoft, having added 500 MW of capacity since mid-2023, is on track to add another 1 GW within six months. Google, meanwhile, is focusing on expanding its European operations, with plans to open 10 new facilities by 2026. This rapid growth aligns with the projected doubling of total hyperscale capacity in four years, supported by a pipeline of 440 future facilities.
Opportunities for Hardware Providers
The expansion of hyperscale data center market presents substantial opportunities for hardware providers, necessitating a continuous supply of servers, storage solutions, and networking equipment. Companies like Nvidia, Hewlett Packard Enterprise, and Cisco Systems are poised to benefit from this demand. The global server market is anticipated to grow by 12% annually, driven by data center needs. Furthermore, the demand for managed services has increased, with 70% of enterprises seeking to manage workloads with greater efficiency and security. This shift underscores the need for robust, scalable hardware solutions. Additionally, innovations in liquid cooling systems and energy-efficient technologies are gaining traction, as data centers strive to reduce their carbon footprint and improve operational efficiency. These trends highlight the importance of advanced hardware solutions to support the burgeoning infrastructure of hyperscale data centers.
Key Findings in Hyperscale Data Center Market
| Market Forecast (2032) | US$ 177.58 billion |
| CAGR | 5.3% |
| Top Drivers |
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| Top Trends |
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| Top Challenges |
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Investment Snapshot in the Hyperscale Data Center Market
As analyzed by Astute Analytica, the hyperscale data center market is witnessing unprecedented investments and expansions, driven by the rising demand for AI and digital services. Key players are making strategic moves to bolster their infrastructure capabilities globally. Amazon leads the charge with a monumental $150 billion investment planned over the next 15 years, aimed at supporting the surge in AI applications. This includes new developments in Mississippi, Saudi Arabia, and Malaysia, and expansions in Virginia and Oregon. Notably, Amazon's $10 billion project in Mississippi represents the largest corporate investment in the state's history, while the $650 million acquisition of a 1,200-acre property in Pennsylvania is set to create a data center capable of powering nearly 900,000 homes.
AWS's innovative approach to energy solutions, including potential nuclear power usage, reflects a response to power availability concerns. Furthermore, Amazon's $4 billion investment in the AI company Anthropic underscores its dedication to deploying future AI models on AWS Trainium and Inferentia chips. These strategic investments are expected to generate significant AI-related revenue, projected to reach tens of billions of dollars in the near future.
Microsoft, one of the largest players in the hyperscale data center market, is also in mega-expansion mode, having increased its data center spending by over 50% and adding 500 MW of capacity since July 2023. The company plans to add another 1 GW within the next six months to cater to the growing AI demand. Additionally, AWS's global expansion strategy includes a commitment of over $100 billion on AI infrastructure over the next decade, targeting new developments in regions such as Taiwan, Singapore, Germany, and Spain.
Preference for Air-Based Cooling Over Liquid Cooling
End users often choose air-based cooling over liquid cooling in the hyperscale data center management due to its lower risk profile and operational simplicity. In 2023, surveys showed that 70% of data center managers preferred air cooling for its ease of maintenance and reduced risk of leaks or other failures associated with liquid systems. Air-based systems do not require the same level of specialized knowledge for operation and maintenance, making them more accessible for a wide range of facilities. Furthermore, these systems are compatible with the increasing trend of modular data center designs, which saw a 40% increase in adoption over the past year. This compatibility allows for flexible scaling without the need for comprehensive system overhauls.
Air-based cooling systems also excel in regions with moderate climates, where leveraging outside air for free cooling can significantly reduce operational costs. This capability has led to energy savings of up to 50% in suitable climates. Additionally, the integration of AI and IoT technologies into air-based systems has enabled real-time monitoring and optimization, enhancing both performance and energy efficiency. As the demand for efficient, reliable, and environmentally friendly cooling solutions grows, air-based systems are well-positioned to meet these needs, ensuring their continued dominance in the hyperscale data center market.
IT Infrastructure Set to keep Dominating Market and Generate More than US$ 95.95 Billion In Revenue
The IT infrastructure segment of the hyperscale data center market is poised to be a transformative force, reshaping market demand and outlook through its strategic contribution to data-driven innovation. As of 2023, the global hyperscale data center count has reached over 700 facilities, a testament to the surging demand for expansive data processing capabilities. The hyperscale market is projected to exceed $220 billion by 2025, driven by the need for robust infrastructure to support AI, IoT, and big data analytics. The server market alone saw $95 billion in revenue this year, highlighting the critical role of high-performance computing. Additionally, the demand for advanced cooling solutions has surged, surpassing $10 billion, as energy efficiency becomes paramount in reducing operational costs and carbon footprints. This growth trajectory is further bolstered by the increasing investments in data center infrastructure management (DCIM) solutions, which reached $5 billion in 2023.
Several factors enable this dynamic of the hyperscale data center market, including technological advancements and evolving business needs. The rapid deployment of 5G technology is a significant catalyst, with global 5G subscriptions surpassing 1.5 billion, demanding low-latency data processing capabilities. Moreover, the expansion of edge computing, which saw a $9 billion market in 2023, is pushing data centers closer to end-users, enhancing real-time data processing. Market players are strategically positioning themselves to capitalize on these trends by investing in modular and scalable infrastructure solutions. Companies like Amazon, Microsoft, and Google are leading the charge, with cloud infrastructure revenues collectively reaching $150 billion. These players leverage economies of scale and advanced R&D capabilities to offer competitive and innovative solutions. The increasing focus on sustainability is also a driving force, with green data center initiatives receiving $7 billion in investments. By aligning with these trends, market players are well-positioned to capture emerging opportunities and drive future growth.
Hyperscale Data Centers in 2024: Unveiling the Power-Hungry Cooling Giants
In 2024, hyperscale data center market continue to be at the heart of the digital world, with their power consumption reaching staggering levels as they support the burgeoning demand for cloud-based services, AI applications, and data analytics. The estimated global power consumption by hyperscale data centers is now projected to be over 500 terawatt-hours annually, equivalent to the total electricity consumption of a country like Sweden. With a global demand that sees more than 600 hyperscale facilities operating worldwide, each consuming over 10 megawatts annually, these centers are the backbone of modern digital infrastructure. The demand is further fueled by the exponential growth of data, with some centers expected to house over 100,000 servers each, showcasing the immense scale at which they operate.
Cooling systems emerge as the primary power consumers within these hyperscale giants. It is estimated that cooling mechanisms of one such data center in the hyperscale data center market alone consume enough power to run nearly 50,000 average American households for a year. With an estimated 40 billion gigabytes of data being generated globally every day, the need for efficient cooling systems is more critical than ever to ensure optimal performance and prevent overheating. Advanced liquid cooling systems, though more power-efficient compared to traditional air cooling, are still voracious energy consumers. Interestingly, some innovative data centers are exploring sustainable cooling solutions, like utilizing natural resources such as sea or lake water, which can save enough energy to power a small city. This relentless drive for efficiency highlights the ongoing battle between the insatiable power demand and the pursuit of sustainability in the hyperscale data center landscape.
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North America to Hold Lion’s Share of 45% in Global Hyperscale Data Center Market
North America stands as a dominant force in the hyperscale data center market, holding over 45% of the global market share. This commanding position is underscored by a significant expansion in data center capacity, set to increase by 2.5 times, with over 24,000 Megawatts currently under construction. The region's contribution to global market growth is substantial, with projections indicating that 35% of the industry's expansion from 2024 to 2028 will originate from North America. This growth is fueled by the region's ability to meet the escalating demand for scalable and efficient compute architectures, a necessity driven by technological advancements and the proliferation of data-intensive applications.
Economically, the impact of the data center industry in North America is profound. The U.S. market alone is valued at approximately 75% of the regional market as of 2023. Parallel growth trajectories are observed in Canada and Mexico, with Canada’s market expected to surge to $6.5 billion by 2028, and Mexico's market projected to grow at an annual rate of 9.75% to reach $1.15 billion. These figures illustrate not only the region's economic vitality but also the increasing demand for data center services across North America, driven by the rise of AI, machine learning, and IoT devices, which necessitate enhanced computational power and storage capabilities.
Infrastructure investments and hyperscale data center market trends further bolster North America's leadership in the hyperscale data center sector. Data center construction in the U.S. has increased exponentially, with preleasing activity indicating robust demand as 83% of the 3,077.8 MW under construction is already preleased. The focus on sustainability is evident with the adoption of green data centers, while the rise of edge computing complements the growth of IoT technologies. Despite the rapid expansion, the overall vacancy rate remains low at 3.7%, highlighting the efficient utilization of existing capacities and the sustained need for further development to maintain the region's dominance in this pivotal industry.
Global Hyperscale Data Center Market Major Players
- SanDisk Corporation
- IBM Corporation
- Hewlett-Packard
- Cisco Systems
- Cavium Systems
- Mellanox Technologies
- Broadcom Ltd.
- Intel Corporation
- Quanta Computer Inc.
- Other Prominent Players
Key Market Segmentation:
By Infrastructure
- IT Infrastructure
- Electrical Infrastructure
- Mechanical Infrastructure
- General Construction
By Cooling System
- Crac & Crah Units
- Chiller Units
- Cooling Towers & Dry Coolers
- Economizers & Evaporative Coolers
- Others
By Cooling Technique
- Air based cooling
- Liquid Based Cooling
By General Construction
- Building Development
- Installation & Commissioning Services
- Building Design
- Physical Security
- DCIM
By Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
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