Samsung C&T Collaborates on Constructing $1.3 Billion Data Center in Vietnam
Vietnam is making waves in the data center industry, offering some of the lowest development costs in the region. According to Cushman & Wakefield, the average cost per megawatt (MW) in Vietnam is approximately $7.1 million, significantly lower than the Asia-Pacific average of $10.1 million.
This competitive pricing is particularly noticeable when compared to Japan, where the cost per MW stands at $16.1 million. This cost difference could potentially attract more investments in data center construction in Vietnam.
The lower development costs, combined with strong government support and growing demand for digital infrastructure, position Vietnam as a rising data hub in Southeast Asia. The country ranks second in Southeast Asia for data center investment returns, with a yield on cost (YoC) of 17.5–18.8%, just behind Singapore's 21–23%.
Vietnam's government has introduced policies to support the growth of its digital infrastructure, which aids in attracting investments. The country is experiencing a surge in digital demand, driving the need for more data centers.
One notable project is the collaboration between Samsung C&T and CMC Corp. to build a data center hub in Ho Chi Minh City. The total investment for the project is $1.3 billion, with the initial phase involving a $250 million investment for a 30-megawatt data center.
Samsung C&T, a part of South Korea's biggest conglomerate, has worked on major landmark projects, including Dubai's Burj Khalifa and Singapore's Marina Bay Sands. Nguyen Trung Chinh, chairman of CMC, stated that the project will be a leading digital infrastructure project in the region.
CMC, established in 1993, is among Vietnam's largest technology companies, providing IT services, digital infrastructure, and AI solutions. The company stated that the project will help make Vietnam a data and AI hub in the Asia-Pacific region.
The project will be developed in two phases. The second phase will involve about $1 billion for a 100-megawatt data center. This lower cost of developing data centers in Vietnam compared to other Asian countries is contributing to Vietnam becoming a data center hotspot in the region.
In conclusion, Vietnam's competitive costs, strong government support, and growing demand for digital infrastructure make it an appealing location for data center investments. With its strategic position and potential for high returns, Vietnam is poised to become a major player in the global data center landscape within the next decade.
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