Internet data centre (IDC) in Hòa Lạc Hi-Tech Park. This is the largest IDC in Việt Nam, invested by VNPT. — Photo VNPT

HCM CITY — Việt Nam is assessed as one of the fastest-growing data centre markets globally, driven by the digitalisation efforts of domestic small- and medium-sized enterprises (SMEs), tech-savvy young population, the advent of 5G, demand for self-sufficient digital infrastructure, and data localisation.

The Vietnamese market surged to over US$1 billion last year, nearly double the figure logged in 2022. Currently, most of those participating in the local data centre segment are domestic telecommunications companies.

According to the real estate consultancy firm Savills Vietnam, there are 28 data centre projects nationwide with a combined capacity of 45MW. The market sees involvement of 44 service providers. Notably, in August 2022, Amazon Web Services (AWS) announced the launch of data centres in Hà Nội and HCM City.

Similarly, a study by Cushman & Wakefield Vietnam reveals that compared to mature markets like Singapore, Tokyo, Sydney, Beijing and Shanghai, Việt Nam remains relatively "young". While major international cloud service providers have yet to establish a significant presence, some international telcos have entered through partnerships with domestic peers. Projects of small and medium scales undertaken by domestic firms are underway in both HCM City and Hà Nội.

According to Trang Bùi, CEO of Cushman & Wakefield Vietnam, the nation is experiencing rapid population growth – particularly in the middle class, along with urbanisation, high internet penetration, and active digital adoption in banking and business operations.

However, despite its advantages, Việt Nam currently lacks data centre infrastructure on a global scale to match its population ratio. This may pressure domestic investors in terms of construction challenges, scarcity of experienced labour and supply chain logistics.

Cushman & Wakefield Vietnam's expert suggests investors continue to eye this sector, particularly focusing on larger-scale projects rather than building numerous small facilities.

The CEO analysed that southern provinces could become favoured destinations thanks to abundant land reserves, readily available electricity within industrial zones, and major national submarine cable landing stations in Quy Nhơn, Đà Nẵng and Vũng Tàu. Additionally, renewable energy accounts for a quarter of the national energy mix.

Data centres are expected to play a crucial role in supporting Việt Nam's digital transformation. Therefore, despite being in the nascent stage, many foreign investors anticipate effective investment-attracting policies in the near future. — VNS