IMARC Group has recently released a new research study titled “South Korea Data Center Market Report by Data Center Size (Large, Massive, Medium, Mega, Small), Tier Type (Tier 1 and 2, Tier 3, Tier 4), Absorption (Non-Utilized, Utilized), and Region 2025-2033”, offers a detailed analysis of the market drivers, segmentation, growth opportunities, trends and competitive landscape to understand the current and future market scenarios.
South Korea Data Center Market Overview
The South Korea data Center market size reached USD 4.1 Billion in 2024. Looking forward, it is projected to reach USD 9.3 Billion by 2033, with a compound annual growth rate (CAGR) of 8.6% during the forecast period 2025-2033. The market growth is primarily driven by increasing demand for cloud computing services.
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 the market growth.
- Transformation initiatives by government entities and private enterprises serve as significant growth factors.
- Expanding telecommunications infrastructure with high-speed internet enhances market opportunities.
- Seoul Capital Area leads regional market growth due to conducive investment environment.
- Energy-efficient design popularity is rising in Yeongnam (Southeastern Region).
- Eco-friendly practices adoption is growing in Honam (Southwestern Region).
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Market Growth Factors
The South Korea data center market is driven by the increasing number of smart cities in the country. This urban expansion necessitates robust data infrastructure, stimulating data center demand. Additionally, government and private enterprises are undertaking transformation initiatives that further accelerate market growth. These initiatives include digital infrastructure enhancements and smart technology deployments that require reliable data storage and processing capabilities.
A key driver is the expanding telecommunications infrastructure characterized by high-speed internet connectivity. This network expansion improves data transmission and supports cloud services, boosting the data center market. The increased demand for cloud computing services across South Korea is another potent driver, as businesses migrate workloads to cloud platforms for flexibility and scalability.
Sustainability and green initiatives play an increasing role. Data centers are widely adopting renewable energy sources and energy-efficient technologies to reduce carbon footprints and comply with governmental regulations. For instance, regulatory authorities in South Korea unveiled plans for a 1-gigawatt (GW) data center hub near Donghae and Gangneung cities, designed to host up to 50 data centers, each averaging 20 megawatts (MW). This hub emphasizes nuclear and coal-fired power plants’ energy utilization while promoting efficiency and sustainability.
Market Segmentation
Breakup by Data Center Size:
- Large
- Massive
- Medium
- Mega
- Small
Large and massive data centers cater primarily to major corporations and cloud service providers, delivering extensive computing and storage capacity. Medium-sized centers serve regional enterprises and service providers. Mega data centers address the growing demand for digital content and cloud services, typically integrating advanced cooling and energy efficiency technologies. Small data centers serve niche industries or local businesses, emphasizing low latency and proximity services.
Breakup by Tier Type:
- Tier 1 and 2
- Tier 3
- Tier 4
Tier 1 and Tier 2 data centers are mostly used by smaller businesses or for less critical applications, providing limited redundancy and lower uptime. Tier 3 centers balance reliability and cost, offering multiple power and cooling paths, crucial for enterprises needing consistent performance. Tier 4 represents the highest security and reliability level, featuring fully redundant infrastructure and fault-tolerant systems designed to prevent 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 data center areas not yet leased or activated. Hyperscale caters to large cloud providers and tech giants with vast capacity requirements. Retail colocation is designed for smaller enterprises seeking flexible and cost-effective solutions. Wholesale colocation targets medium-sized businesses, offering an intermediate scale of services.
Breakup by Region:
- Seoul Capital Area
- Yeongnam (Southeastern Region)
- Honam (Southwestern Region)
- Hoseo (Central Region)
- Others
The Seoul Capital Area is the primary market driver due to favorable data center investment environments. Yeongnam region, including cities like Daegu and Busan, benefits from its proximity to industrial zones. Honam is emerging as an attractive zone for data center development. Hoseo, including Sejong and Daejeon, is recognized for research institutions contributing to market demand.
Regional Insights
The Seoul Capital Area is the dominant region in South Korea’s data center market, supported by its conducive environment for data center investments. This region leads due to its advanced infrastructure and strategic importance. Yeongnam (Southeastern Region) and Honam (Southwestern Region) also contribute significantly, propelled by energy-efficient design trends and eco-friendly adoption, respectively.
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, significantly influencing the market outlook.
In August 2024, South Korea Investment Real Asset Management Co. partnered with Indonesian conglomerate Sinar Mas to establish a joint venture for a hyperscale data center in Jakarta’s central business district, marking a US$300 Million project that broadens market share.
In February 2024, South Korea’s regulatory authorities announced plans for a 1-gigawatt data center hub near Donghae and Gangneung, capable of hosting up to 50 data centers averaging 20 megawatts each, strengthening infrastructure capabilities.
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