Vietnam Data Center Market Outlook to 2030

Vietnam Data Center Market Overview

• The Vietnam Data Center market has shown growth, valued at USD 2.5 billion based on a five-year historical analysis. This growth is driven by the rapid adoption of cloud infrastructure, increasing internet usage, and digital transformation initiatives led by the Vietnamese government. These factors are driving demand for reliable and scalable data center solutions. The growing use of IoT, 5G rollouts, and increased cybersecurity regulations also contribute to this demand, pushing both local and international players to invest in the market.

• In terms of geographic dominance, Ho Chi Minh City and Hanoi are the two main hubs for data centers in Vietnam. Ho Chi Minh City leads in investment due to its role as the country's financial hub, housing the majority of Vietnam's e-commerce and technology businesses. Hanoi, being the administrative center, experiences demand from government-led digitalization programs.
• The Vietnamese government launched the National Digital Transformation Program, which aims to achieve a digital economy contributing at least $50 billion by 2025. This program promotes the establishment of data centers as critical infrastructure to support the growing digital economy and provides incentives such as land allocation and tax rebates for companies investing in data center facilities.

Vietnam Data Center Market Segmentation

By Data Center Type: The market is segmented by data center type into enterprise data centers, colocation data centers, hyperscale data centers, edge data centers, managed services, and modular data centers. Hyperscale data centers are currently dominating the market due to their capacity to handle vast amounts of data, driven by the surge in cloud services and big data analytics. Companies in sectors like IT and telecom are leading adopters, leveraging these large-scale facilities to ensure robust data processing and storage solutions.

By Component: Segmenting by component, the market includes IT infrastructure, electrical infrastructure, mechanical infrastructure, and general construction. IT infrastructure dominates the component segment, particularly due to the increased focus on cloud services, which demand advanced servers, storage systems, and network infrastructure. The growing need for scalable, efficient data processing has accelerated investment in high-performance hardware solutions.

Vietnam Data Center Market Competitive Landscape

The market is dominated by a mix of local and international players. Key local companies like CMC Telecom and Viettel IDC have gained traction, alongside international firms like FPT Telecom and NTT Global Data Centers.

Vietnam Data Center Market Analysis

Market Growth Drivers

• Increasing Foreign Direct Investments (FDI) in Data Center Infrastructure: Vietnam has witnessed a rise in Foreign Direct Investments, with the Ministry of Planning and Investment reporting over $10 billion in new FDI commitments for IT and telecommunications projects by the end of 2024. This influx is driving the development of data center infrastructure to support large multinational companies entering the market.
• Expanding E-commerce and Digital Services: Vietnam's e-commerce sector continues to experience exponential growth, with total sales projected to exceed $50 billion by 2025. This rapid expansion is fueling the demand for robust data centers to store, process, and analyze the large amounts of data generated by online transactions.
• Growing Internet Penetration and Usage: As of 2024, Vietnams internet user base reached over 80 million, with over 75% of the population actively using digital platforms for communication, banking, and education. This significant rise in internet usage is pushing businesses, especially in the banking and retail sectors, to invest in data centers for cloud computing, data storage, and cybersecurity needs.

Market Challenges

• High Operational Costs and Power Consumption: Power consumption for data centers remains one of the largest operational costs in Vietnam. With the average data center consuming millions of kilowatt-hours annually, and electricity rates increasing, data center operators face significant financial burdens.
• Insufficient Skilled Workforce: Vietnam is currently facing a shortage of skilled professionals in the data center and IT infrastructure space. Despite producing around 50,000 IT graduates annually, the number of professionals with the specific expertise required for data center operations falls short.

Vietnam Data Center Market Future Outlook

Over the next five years, the Vietnam Data Center industry is expected to experience strong growth, driven by increased cloud adoption, ongoing 5G deployments, and government initiatives focused on digital infrastructure.

Future Market Opportunities

• Rapid Expansion of Edge Data Centers: Over the next five years, the demand for edge computing in Vietnam is expected to rise, driven by the need for low-latency services in smart cities, autonomous vehicles, and IoT applications. By 2029, it is projected that at least 100 new edge data centers will be constructed across the country, particularly in emerging industrial zones.
• Adoption of Renewable Energy-Powered Data Centers: Vietnam will see a shift towards renewable energy-powered data centers, with government mandates and corporate sustainability goals pushing the industry in this direction. By 2028, it is expected that over 30% of data centers in Vietnam will operate on renewable energy sources such as solar or wind, reducing their carbon footprint and operational costs associated with electricity consumption.