United States Data Center Construction Market Outlook Report 2023-2028: Surge in M&A and JV Activities & Shift to Cloud and Colocation Bodes Well for the Sector
U.S. Data Center Construction Market
Dublin, March 20, 2023 (GLOBE NEWSWIRE) -- The "U.S. Data Center Construction Market - Industry Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.
The U.S. data center construction market is expected to reach a value of $28.56 billion by 2028 from $20.21 billion in 2022, growing at a CAGR of 5.93% from 2022 to 2028
The U.S. market is the most mature and is witnessing continuous growth in development and operations. The growing popularity of IoT, the emergence of 5G networks, the adoption of cloud-based services, and the demand for streaming online entertainment content at high speeds are the major factors driving the growth of the U.S. data center construction market. Also, the availability of tax incentives, free cooling, and renewable energy in the region is likely to attract more investors to the market.
Some of the preferred locations by operators in the U.S. include Virginia, California, Texas, Illinois, Oregon, Nevada, Georgia, Arizona, Ohio, and others. Virginia and Texas are the top states in data center investments in 2022 owing to the major investment by the hyperscalers such as Amazon Web Services, Microsoft, Google, and Meta (Facebook).
However, the hyperscalers are less likely to develop and invest in the North-Eastern region due to location and land constraints. The region will witness more deployment of edge data centers.
The U.S. government will promote data center investments through various initiatives, such as increasing the availability of land for development, reducing electricity tariffs, and enabling the procurement of renewable energy. Thus, such initiatives will drive the growth of the U.S. data center construction market during the forecast period.
Digitalization across businesses will contribute to a surge in data center investments by colocation, cloud, Internet, and telecommunication providers. Telecom companies such as AT&T, T-Mobile, CenturyLink, and Qualcomm are responsible for deploying and introducing 5G services in the U.S.
The trend of procuring renewable energy to power the facilities will likely continue during the forecast period. Several operators are signing power purchase agreements with renewable energy companies.
The U.S. data center construction market will likely witness new players' entry. In 2022, some new entrants included AUBix, Edge Centres, Corscale Data Centers, Yondr, Quantum Loophole, and others. However, these new players will face competition from local and established global players.
Supply chain disruption, increasing inflation rates, shortage of skilled workforce, and political disturbance with Russia are likely to impact the industry negatively.
Incorporating modular power infrastructure will likely provide higher OPEX savings for data centers over time as they are more efficient, require lower maintenance, and reduce space. The importance of monitoring is growing with the adoption of intelligent real-time monitoring software with automation and AI. These features can predict maintenance requirements, component failures, and automatic switchovers for uninterrupted operations.
In terms of cooling systems, free cooling techniques have grown significantly over the last few years across regions with favorable climatic conditions that can use evaporative/adiabatic coolers for data center cooling purposes.
Innovative designs such as district heating are expected to grow among data centers developed in states with colder climatic conditions. The average general construction cost across the US in 2022 was between USD 8 - USD 9 million per MW. However, the cost might change based on locations, increase in commodity price, inflation, and supply chain constraints.
Apart from the construction, installation, and commissioning services, data centers also invest in improving physical security, monitoring, and management of facilities through data center infrastructure management (DCIM) in real time.
The South-Eastern region has North Virginia as a location that is considered the world's data center capital and has the highest concentration of facilities.
Virginia, Texas, California, and Georgia are among the top states which are attractive locations for hyperscale investments. Operators such as Microsoft, Amazon Web Services, Meta (Facebook), Switch, QTS Realty Trust, and others are building large data centers in these states. Further expansion of these facilities is also expected to be in the pipeline in the coming years.
Arizona State offers various incentives to companies operating in the Foreign Trade Zone. Businesses in a trade zone are eligible for up to a 72.9% reduction in state real and personal property taxes.
The North-Eastern region did not receive any hyperscale development in 2022 owing to space constraints in building hyperscale facilities, especially in regions with traditionally high demand, such as New York and New Jersey. Expansions are taking place in large-scale colocation facilities in the region.
The IT, cloud, entertainment & media, and retail sectors were major contributors to the overall demand in Salt Lake City, with IT & cloud contributing to over 35% of the overall demand. Chicago is currently touted as one of the fastest-growing markets globally and is expected to witness further significant growth in the coming years.
Vendors such as Schneider Electric, Rittal, Hewlett Packard Enterprise, and Delta Power Solutions provide infrastructure based on OCP design. This will aid in the market revenue growth for these vendors, as many organizations prefer solutions such as 48V DC UPS systems.
S. colocation providers are undertaking the construction of facilities in a phased manner, depending on the market demand. Over the next few years, there is expected to be more demand for higher capacity systems in the redundancy configuration of 2N for power infrastructure across multiple facilities.
The surge in data center activities across the country will be a major source of revenue for construction contractors. Some prominent construction contractors in the U.S. data center construction market include AECOM, Arup, Corgan, DPR Construction, Fortis Construction, Holder Construction, Jacobs, Turner Construction, and others.
The major hyperscale operators investing in the U.S. data center construction market include Amazon Web Services (AWS), Microsoft, Meta (Facebook), and Google. The major colocation operators active in the market include Equinix, Digital Realty, Switch, QTS Realty Trust, Iron Mountain, DataBank, Vantage Data Centers, CyrusOne, Compass Datacenters, and others.
The U.S. data center construction market also witnessed several new entrants, such as AUBix, Corscale Data Centers, Edge Centres, iMCritical, Yondr, PowerHouse Data Centers, and Quantum Loophole.
No. of Pages
2022 - 2028
Estimated Market Value (USD) in 2022
Forecasted Market Value (USD) by 2028
Compound Annual Growth Rate
Market Opportunities & Trends
Sustainability Measures Adopted by Data Center Operators
5G Leading to Edge Data Center Developments
Adoption of Advanced Ups Batteries
Rise in Rack Power Density
Sustainable and Innovative Data Center Technologies
Ai & Hpc Applications Driving Liquid Immersion & Direct-To-Chip Cooling
Deployment of Microgrids in Data Centers
Market Growth Enablers
Significant Development of Data Center Facilities
Continued Investments by Hyperscale Operators in the US
Surge in M&A and Jv Activities
Tax and Sales Incentives
Adoption of Cloud-Based Services
Connectivity Improvements Boosting the Data Center Market
Shift from On-Premises to Cloud and Colocation
Big Data & IoT Driving the Data Center Market
Supply Chain Disruptions Hampering Growth
Skilled Workforce Shortages & Discrimination
Site Selection Hindrances to Data Center Development
Security Challenges Impacting Data Center Growth
Power and Water Consumption by Data Centers
Concerns Over Carbon Emissions from Data Centers
The report includes the investment in the following areas:
Enterprise Data Centers
Uninterruptible Power Supply (UPS) Systems
Power Distribution Units
Transfer Switches & Switchgear
Other Electrical Infrastructure
Other Mechanical Infrastructure
CRAC & CRAH Units
Cooling Towers, Condensers, & Dry Coolers
Economizer & Evaporative Coolers
Other Cooling Units
Air-based Cooling Techniques
Liquid-based Cooling Techniques
Core & Shell Development
Installation & Commissioning Services
Engineering & Building Design
Fire Detection & Suppression
Data Center Infrastructure Management (DCIM)/Building Management Systems (BMS)
Tier I & II
Key Data Center Support Infrastructure Providers
Key Data Center Contractors
Syska Hennessy Group
Key Data Center Investors
Amazon Web Services (AWS)
NTT Global Data Centers
Other Data Center Support Infrastructure Providers
Cyber Power Systems
Generac Power Systems
Green Revolution Cooling (GRC)
HITEC Power Protection
Trane (Ingersoll Rand)
Other Data Center Contractors
Brasfield & Gorrie
Clark Construction Group
Gilbane Building Company
JE Dunn Construction
kW Mission Critical Engineering
M+W Group (Exyte)
Salute Mission Critical
Sheehan Nagle Hartray Architects
Sturgeon Electric Company
The Mulhern Group
The Walsh Group
The Weitz Company
TRINITY Group Construction
Other Data Center Investors
COPT Data Center Solutions
EdgeCore Internet Real Estate
fifteenfortyseven Critical Systems Realty (1547)
GIGA Data Centers
H5 Data Centers
Netrality Data Centers
Novva Data Centers
Prime Data Centers
QTS Realty Trust
Sabey Data Centers
Stream Data Centers
T5 Data Centers
Vantage Data Centers
Corscale Data Centers
PowerHouse Data Centers
For more information about this report visit https://www.researchandmarkets.com/r/dtaace
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