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Q1 2023: APAC Infrastructure Quarterly Report

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Executive Summary

The infrastructure services market in APAC continues to push forward amid weak macroeconomic conditions. The current weakness of the Chinese hyperscalers continues to depress demand and operators are looking to other verticals and segments. The good news is that there is more beyond the top tier of public cloud platforms. Subscale and edge providers are expanding globally and using colocation to enter and build across APAC, while the region is home to scaled gaming and social media platforms that run on proprietary infrastructure. This demand is able to offset some of the softness found in other parts of the markets.

There are other reason to be optimistic. China is going through a painful period, but will start to emerge from this sluggish period, while new workloads around AI will eventually land in the region and push demand for data centre infrastructure capacity. Meanwhile, young markets across the region continue to mature and are supported by exceedingly favourable fundamentals that ensure long runways of growth and expansion.

The strategic landscape in APAC continues to be dynamic as it responds to the various currents within the sector. Scaled and listed operators are the target of investors for take-private transactions and investors oriented to long-term investments continue to flock to the sector and support new operating platforms and projects.

This report takes a closer look at the most noteworthy themes and developments that took place in the infrastructure services market in 1Q23. It is a regional supplement to Structure Research’s other quarterly update reports.