September 25-26, 2024 The Wynn Las Vegas, NV More information

Q4 2023: APAC Infrastructure Quarterly Report

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Executive Summary

The infrastructure services market in APAC continues to push forward in a landscape that features many moving parts. Hyperscale self-builds, China’s struggles and slower public cloud growth continues to impact the demand profile for colocation, while macroeconomic headwinds persist.

Despite the conditions, there are plenty of dynamics providing an offsetting effect. Webscale providers have expanded into the region and major content platforms like ByteDance are building out more infrastructure and consuming in multi-MW increments. This has supplemented the softening of demand caused by self-builds and the lower levels of growth coming from hyperscale public clouds.

But other areas of the market are still emerging that will help boost demand for infrastructure. AI has not quite materialised in APAC yet, but the planning is well underway, and GPU cloud providers as well as hyperscale clouds, are set to expand aggressively into the region. There are already locations suitable to accommodate this demand, like Johor in Malaysia, but much of the region does not lack space and power, and it is entirely possible that AI builds will start to pop up in other markets. The demand profile for the sector is not going to taper off, but it is clearly shifting.

The strategic landscape in APAC has also moved around in the past several months. The telco divestment wave has slowed, but there are signs that data centre assets could be found in other places. Meanwhile, joint ventures continue to be established, combining both global and local players, and specialists in the various parts of the hyperscale data centre value chain.

This report takes a closer look at the most noteworthy themes and developments that took place in the infrastructure services market in 4Q23. It is a regional supplement to Structure Research’s other quarterly update reports.