Thailand’s Data Center Market Gathers Pace as SE Asia’s Digital Economy ExpandsThailand’s Data Center Market Gathers Pace as SE Asia’s Digital Economy Expands

Thailand’s data center market is gaining momentum thanks to private investment, government support, and the country’s position at the heart of Southeast Asia’s rapidly expanding digital infrastructure landscape.

According to a recent report from JLL, Thailand’s strategic location in Southeast Asia makes it an ideal hub for connecting ASEAN markets to the global economy.

Bangkok has become a focal point for data center activity, with significant developments in nearby areas such as Chonburi, as well as to the north and east of the capital, all offering strong connectivity and infrastructure.

These sites provide excellent access to power and connectivity while remaining close to urban infrastructure.

A recent transaction facilitated by JLL secured real estate along Bangkok’s Bangna-Trat Road for “one of the world’s largest digital infrastructure companies.”

Krit Pimhataivoot, head of capital markets at JLL Thailand, said the $500 million investment underscores the nation’s growing appeal as a data center destination.

“Thailand is enticing thanks to its strategic geographic position, rising data consumption, and supportive government policies,” Pimhataivoot told Data Center Knowledge.

Bangkok’s position as a regional hub makes it an ideal location for the growth of data centers. (Image: Alamy)

Thailand is currently home to around 50 data centers, primarily clustered around Bangkok, with major players including TCC Technology, True IDC, and CAT Telecom all maintaining a presence in the region.

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John Dinsdale, chief analyst at Synergy Research Group, said international companies including NTT and KDDI are also expanding their footprint in Thailand’s data center market, while global cloud providers like Google, Microsoft, and Amazon are set to significantly increase their presence.

“Thailand’s market may be nascent, but its forecast growth rate is among the highest in the region,” he told Data Center Knowledge.

Dinsdale said a host of companies also have big plans for opening data centers over the coming years, including Equinix, GDS, Chindata, CtrlS, NTT, and Empyrion.

Southeast Asia’s Growing Data Center Industry

The expansion of Thailand’s data center market comes as the wider Southeast Asia region is witnessing a data center boom fueled by rapid digital transformation, booming e-commerce, and increasing cloud adoption.

Across the Southeast Asian market, data center capacity has doubled in a year, from 2,500 MW in 2022 to 5,000 MW in 2023.

Jabez Tan, head of research at Structure Research, explained that Singapore played a central role in Southeast Asia’s data center development.

“This is largely due to its extensive subsea fiber-optic networks, stable regulatory environment, and status as a regional financial and logistics center,” he said.

Related:Tracking the Explosive Growth of India’s Data Center Market

Around 50 data center are currently in operation across Thailand. (Image: Alamy)

However, the island nation faces growth constraints due to its limited real estate and power availability, which has pushed global operators to consider neighboring countries.

Amid this bottleneck, global operators are increasingly considering neighboring countries like Thailand, which, while still behind regional leaders like Indonesia with 79 data centers and Malaysia with 55, is catching up.

“Thailand, Malaysia, and Indonesia are benefiting from demand that Singapore can no longer support,” Dinsdale said.

Thailand Data Centers: Challenges and Opportunities

Despite several factors being in its favor, Thailand faces challenges in competing with its neighbors. Chief among these hurdles is its regulatory environment.

“Indonesia’s large population and Malaysia’s strong infrastructure give them an edge,” Pimhataivoot noted. “In Thailand, zoning and regulations for data centers, particularly in Bangkok, are still catching up.”

Thailand’s advantages include abundant power supply, improving telecommunications infrastructure, and government incentives such as the Board of Investment’s freehold land ownership allowances for foreign investors.

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Pimhataivoot added that the cost of power and fiber connectivity in Thailand is higher than in neighboring countries, which could deter some investors.

Tan noted that each country in Southeast Asia has different regulations concerning land acquisition, power usage, and environmental standards.

“Navigating these varying regulatory landscapes requires significant time and resources, often necessitating collaboration with local experts,” he explained. “Without careful management, these complexities can lead to delays and increased costs when building data centers.”

He noted that infrastructure readiness also varies across the region. While countries like Thailand and Malaysia have made significant progress, others may face issues such as inconsistent power supplies or limited access to renewable energy sources.

“These factors can impede the development of reliable and sustainable data center operations, where consistent power and efficient cooling are critical,” Tan said.

Sustainability Prospects for Data Centers in Thailand

Sustainability is becoming a focal point for Thailand’s data center expansion. Companies are exploring green technologies and renewable energy to meet global and local environmental standards.

“The shift toward green and sustainable data center designs aligns with global trends,” Pimhataivoot said, predicting greater emphasis on environmentally conscious builds by 2025.

Looking ahead, edge computing and distributed data centers are expected to gain traction as emerging technologies demand localized data processing.

Special economic zones like the Eastern Economic Corridor (EEC) are likely to play a significant role in this growth.

“The EEC and other zones will enhance Thailand’s connectivity with ASEAN countries, boosting its regional competitiveness,” Pimhataivoot added.

Thailand Data Center Market in 2025 and Beyond

In 2025, Thailand is expected to attract more international players and further integrate into the region’s digital infrastructure network.

“Thailand’s potential to emerge as a regional data hub is undeniable, though it will likely still trail larger markets in capacity,” Pimhataivoot said. “The key lies in balancing growth, sustainability, and connectivity.”

Dinsdale said that with investments rising and strong government support, Thailand is poised to play a critical role in Southeast Asia’s data-driven future, thanks to its location.

“It is in the heart of Southeast Asia, which is a region that’s attracting a lot of attention,” he said. “The economies are growing, and there is a lot of potential for strong growth well into the future.”

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Companies like AWS, Microsoft, and Google are making significant investments in Thailand, alongside an influx of Chinese hyperscalers like Alibaba, Tencent, Baidu, Damac, and ByteDance, which are expanding to serve the region’s Chinese-speaking companies and consumers.

Tan noted that the Thai government’s initiatives focused on smart cities and digital transformation are creating a supportive environment for data center investment.

“When combined with the region’s push toward renewable energy and sustainability, Thailand has positioned itself as a strong contender for data center growth within Southeast Asia,” he said.