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.
KEY HIGHLIGHTS
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.
SEGMENTATION INSIGHTS
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.
GEOGRAPHICAL ANALYSIS
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.
VENDOR ANALYSIS
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.
Key Attributes:
Report Attribute | Details |
No. of Pages | 558 |
Forecast Period | 2022 - 2028 |
Estimated Market Value (USD) in 2022 | $20.21 Billion |
Forecasted Market Value (USD) by 2028 | $28.56 Billion |
Compound Annual Growth Rate | 5.9% |
Regions Covered | United States |
MARKET DYNAMICS
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
Market Restraints
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:
Facility Type
Colocation
Hyperscale
Enterprise Data Centers
Infrastructure
Electrical Infrastructure
Mechanical Infrastructure
General Construction
Electrical Infrastructure
Uninterruptible Power Supply (UPS) Systems
Generators
Power Distribution Units
Transfer Switches & Switchgear
Other Electrical Infrastructure
Mechanical Infrastructure
Cooling Systems
Racks
Other Mechanical Infrastructure
Cooling Systems
CRAC & CRAH Units
Chiller Units
Cooling Towers, Condensers, & Dry Coolers
Economizer & Evaporative Coolers
Other Cooling Units
Cooling Techniques
Air-based Cooling Techniques
Liquid-based Cooling Techniques
General Construction
Core & Shell Development
Installation & Commissioning Services
Engineering & Building Design
Fire Detection & Suppression
Physical Security
Data Center Infrastructure Management (DCIM)/Building Management Systems (BMS)
Tier Standards
Tier I & II
Tier III
Tier IV
Major Vendors
Key Data Center Support Infrastructure Providers
ABB
Caterpillar
Cummins
Delta Electronics
Eaton
Legrand
Rolls-Royce
Schneider Electric
STULZ
Vertiv
Key Data Center Contractors
AECOM
Arup
Corgan
DPR Construction
Fortis Construction
Holder Construction
Jacobs
Rogers-O'Brien Construction
Syska Hennessy Group
Turner Construction
Key Data Center Investors
Apple
Amazon Web Services (AWS)
CyrusOne
DataBank
Digital Realty
Equinix
Google
Meta (Facebook)
Microsoft
NTT Global Data Centers
Other Data Center Support Infrastructure Providers
Airedale
Alfa Laval
Asetek
Bloom Energy
Carrier
Condair
Cormant
Cyber Power Systems
Data Aire
Enlogic
FNT Software
Generac Power Systems
Green Revolution Cooling (GRC)
HITEC Power Protection
Johnson Controls
KOHLER
KyotoCooling
Mitsubishi Electric
Natron Energy
NetZoom
Nlyte Software
Rittal
Siemens
Trane (Ingersoll Rand)
Tripp Lite
Yanmar (HIMOINSA)
ZincFive
Other Data Center Contractors
AlfaTech
BlueScope Construction
Brasfield & Gorrie
CallisonRTKL
Clark Construction Group
Climatec
Clune Construction
EMCOR Group
EYP MCF
Gensler
Fluor Corporation
Gilbane Building Company
HDR
HITT Contracting
Hoffman Construction
JE Dunn Construction
kW Engineering
kW Mission Critical Engineering
Linesight
M+W Group (Exyte)
Morrison Hershfield
Mortenson
Rosendin
Salute Mission Critical
Sheehan Nagle Hartray Architects
Skanska
Southland Industries
Sturgeon Electric Company
Structure Tone
The Mulhern Group
The Walsh Group
The Weitz Company
TRINITY Group Construction
Other Data Center Investors
Aligned
American Tower
CloudHQ
Cologix
Compass Datacenters
COPT Data Center Solutions
CoreSite
Cyxtera Technologies
DartPoints
DC BLOX
EdgeCore Internet Real Estate
EdgeConneX
EdgePresence
Element Critical
Evoque
Flexential
fifteenfortyseven Critical Systems Realty (1547)
GIGA Data Centers
H5 Data Centers
HostDime
Iron Mountain
Netrality Data Centers
Novva Data Centers
Prime Data Centers
QTS Realty Trust
Sabey Data Centers
Skybox Datacenters
Stream Data Centers
STACK Infrastructure
Switch
T5 Data Centers
TierPoint
Vantage Data Centers
Vapor IO
New Entrants
AUBix
Corscale Data Centers
Edge Centres
iMCritical
PowerHouse Data Centers
Quantum Loophole
Yondr
For more information about this report visit https://www.researchandmarkets.com/r/dtaace
About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
Attachment
CONTACT: CONTACT: ResearchAndMarkets.com Laura Wood,Senior Press Manager press@researchandmarkets.com For E.S.T Office Hours Call 1-917-300-0470 For U.S./ CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900
