United States Data Center Construction Market Report 2023: A $28.56 Billion Market by 2028 - Continued Investments by Hyperscale Operators

DUBLIN, March 20, 2023 /PRNewswire/ -- 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.

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

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/urw3w2

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