Vietnam’s data center market is witnessing a dramatic rise, reflecting the country’s rapid digital transformation and innovation-friendly environment. With projections predicting the market to reach US$ 1.75 trillion by 2030, up from US$ 654 million in 2024, this swift growth is attributed to a compelling mix of government policies, investment influx, and cost advantages. These positive trends combine to make Vietnam an attractive venue for domestic and international firms looking to expand their data center operations.
Favorable Government Policies and Investments
Strategic Government Initiatives
Vietnam’s government has been pivotal in fostering a conducive environment for the burgeoning data center industry. Policies promoting digital transformation and foreign investments have significantly contributed to this sector’s expansion. In a landmark move, the government permitted full foreign ownership of data centers starting in July 2024, removing barriers for international investors and accelerating market entry. Additionally, ambitious plans to establish ten new submarine cables by 2030 reaffirm the government’s commitment to enhancing national and global connectivity.
Increasing Investments in Infrastructure
The influx of investments, both local and international, plays a crucial role in propelling the data center market. Significant opportunities exist in areas like IT infrastructure, cooling systems, power supply, and general construction services. Notably, the construction costs in Vietnam—ranging between US$ 5.5-8.5 million per megawatt—make it one of the most cost-effective destinations in Southeast Asia. Comparatively lower land and construction costs enhance Vietnam’s appeal, with suburban land prices in key cities like Ho Chi Minh City and Hanoi averaging US$ 209 per square meter.
Embracing Energy-Efficient Technologies
Renewable Energy and Sustainability Goals
One of the defining features of Vietnam’s data center market is its focus on sustainable and energy-efficient infrastructure. The Vietnamese government’s target to achieve 39% renewable energy by 2030 has spurred the industry to embrace green technologies. Data centers are increasingly implementing advanced systems like liquid cooling and renewable energy sources to reduce their carbon footprint. Viettel’s green AI-ready data center, which launched in April 2024 with a 30MW power capacity, epitomizes this shift towards sustainability.
Role of AI and Advanced Technologies
The adoption of advanced technologies such as artificial intelligence (AI) and machine learning further drives the need for resilient and efficient data centers. With enterprises across Vietnam increasingly digitizing and integrating AI into their operations, demand for high-performing and energy-efficient infrastructure is soaring. Besides, the growing colocation market and requirements from fintech services and AI-driven applications necessitate robust investments in modernizing data center facilities to cater to these high-demand sectors.
Future Prospects and Challenges
Current Landscape and Future Expansion
Vietnam currently hosts around 26 operational data centers, with an additional 11 in the pipeline, indicating rapid growth and market potential. Data centers in strategic locations like Ho Chi Minh City and Hanoi are experiencing surging demand, driven by heightened requirements for cloud computing and digital services. New entrants like Epsilon Telecommunications (KT Corporation), Gaw Capital, and Infracrowd Capital are expanding their footprint, attracted by Vietnam’s strategic location, cost efficiency, and supportive government policies.
Addressing Infrastructure and Cybersecurity Concerns
Vietnam’s data center market is experiencing substantial growth, mirroring the country’s rapid digital transformation and innovation-driven climate. Predicted to soar to US$ 1.75 trillion by 2030 from US$ 654 million in 2024, this remarkable expansion can be attributed to a synergistic blend of government policies, increased investments, and cost-efficient advantages. The Vietnamese government has been proactive in creating an environment conducive to digital investments, instituting favorable policies, and providing incentives to attract foreign investments. Additionally, the affordable operational costs in Vietnam make it a competitive destination for businesses aiming to optimize their expenditure. This positive climate encourages both domestic and international firms to view Vietnam as a fertile ground for scaling up their data center operations. Consequently, the country’s strategic positioning in the Southeast Asian region is further solidified, making it a hotspot for technological advancements and large-scale digital infrastructure projects. Thus, Vietnam stands out as a prime location for data center growth, offering an attractive proposition for firms worldwide.