Report: Great Development Potential of Vietnam's Data Center Market

JLL, a leading global corporation specializing in providing commercial real estate and investment management services, has just released the report titled "Vietnam Data Centers: Opportunities on the horizon," featuring many in-depth analyses of the current situation and great development potential of Vietnam's data center market.

According to the report, Vietnam's data center market is currently dominated by large domestic telecommunications companies such as VNPT, Viettel IDC, FPT Telecom, and CMC Telecom. However, the market has begun to witness the participation of many foreign "giants" such as Gaw Capital's 20MW data center in the City Hi-Tech Park (Ho Chi Minh City), 30MW project of Worldwide DC Solution (Singapore) and a joint venture between NTT (Japan) and DQ Tek. Earlier this year, Alibaba (China) also announced plans to build a data center in Vietnam.

Regarding construction costs, JLL's report said that the cost of building data centers in Vietnam ranges from US $6-13 million USD, taking into account many characteristics of construction, localities, and operating costs. The report also noted that colocation prices can fluctuate significantly based on monthly electricity consumption.

Accordingly, amid the growing demand for data and cloud services, energy infrastructure plays an important role in ensuring a stable supply for data centers.

As of April 2024, Alibaba Cloud has 89 data centers in 30 zones around the world. (Photo: VNEconomy)

The Vietnamese Government has approved Power Plan VIII, the report stated, aiming to increase total power capacity to 155 GW by 2030 through diversifying the energy structure, reducing dependence on coal thermal power, and switching to other energy sources.

Regarding the legal environment, the Telecommunications Law 2023 will create a favorable legal framework for the development of the data center and cloud computing industry. This law allows 100% foreign investment in the data center sector, which is expected to attract more foreign investment into Vietnam.

Celina Chua, Director of Data Center Client Solutions for JLL's Asia-Pacific region, emphasized the priority position of Vietnam among the most attractive destinations for investors and operators to build up their market entry strategy.

"Vietnam is ready to take advantage of these opportunities with growing support from the Government and growing demand for digital services, helping shape a promising future for this industry here," said Chua.

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