Latin America Data Center Construction Market - Industry Outlook and Forecast 2022-2027

Latin America Data Center Construction Market - Industry Outlook and Forecast 2022-2027

  • June 2022 •
  • 298 pages •
  • Report ID: 6288153 •
  • Format: PDF
The Latin America Data Center Construction market is expected to grow at a CAGR of 6.99% during 2022-2027

The following factors are likely to contribute to the Latin America data center construction market growth during the forecast period:

• Adoption of Cloud, IoT & Big Data
• Construction of Modular Data Centers
• Increased Deployment of Submarine Cables
• Thriving Digital Economy in Latin America
• Tax Incentives Enhancing Data Center Investments

Latin America Data Center Construction Market Opportunities

• Some of the major construction parameters and standards on which data centers in Latin America are built include Uptime Institute’s Tier standards, LEED Certification, TIA 942, and ANSI/BICSI 002-2019 certifications
• There is an increase in the construction of data centers built to cater to increasing demand by hyperscale and cloud service providers such as Microsoft, Amazon Web Services, Google, IBM, Huawei, and Tencent, among others, which will also drive the market, especially for wholesale colocation
• Brazil is the market leader, contributing over 50% of the investment to Latin America, followed by other countries such as Mexico, Columbia, Chile, and Uruguay. Modular data center deployment is popular in other Latin American countries such as the Caribbean and Paraguay, among others
• Scala Data Centers, a hyperscale developer in Brazil, has created the region’s Center of Excellence in Engineering (CoE). The CoE will manage the end-to-end design and construction process of data centers built by Scala Data Centers in Latin America, with a focus on energy and operational efficiencies

Market Segmentation
• Electrical Infrastructure
o UPS Systems
o Generators
o Switches & Switchgears
o PDUs
o Other Electrical Infrastructure
• Mechanical Infrastructure
o Cooling Systems
o Rack Cabinets
o Other Mechanical Infrastructure
• Cooling Systems
o CRAC and CRAH Units
o Chillers Units
o Cooling Towers, Condensers, and Dry Coolers
o Other Cooling Units
• Cooling Techniques
o Liquid-Based
o Air-Based
• General Construction
o Core & Shell Development
o Installation & commissioning Services
o Building & Engineering Design
o Fire Detection & Suppression Systems
o Physical Security
o Data Center Infrastructure Management (DCIM)
• Tier Standard
o Tier I & Tier II
o Tier III
o Tier IV
• Geography
o Brazil
o Mexico
o Colombia
o Chile
o Rest of Latin America

KEY TRENDS DRIVING THE MARKET

5G Deployments Enabling Edge Data Center Deployments

• Latin American countries are working toward digital transformation to attract foreign investments. 5G network deployment fuels digital transformation, IoT, smart cities, and the fourth industrial revolution
• In February 2021, Chile completed the first 5G spectrum tender in Latin America. In November 2021, Brazil raised around $8 billion investment to deploy and operate 5G data networks
• The increasing deployment and coverage of 5G will lead to the development of edge data center facilities, thereby creating investment opportunities in the market

Adoption of Cloud, IoT, and Big Data Driving Wholesale Colocation

• In Latin America, one of the major drivers for the increasing construction of hyperscale facilities is the increase in cloud computing services, driven by the digitalization of enterprises, and the shift to private, public, or a hybrid cloud architecture
• For providing high quality and low latency cloud-based services across Latin America, the major cloud service providers are expanding their reach across the region via cloud regions/cloud-on-ramps/Points of Presence (PoPs)

Deployment of Submarine Cables Fueling Data Center Construction

• In Latin America, countries having submarine cable connectivity include Brazil, Colombia, Chile, Peru, Uruguay, and Mexico, among others, connecting the region internally as well as to other regions such as Africa, Europe, North America, and APAC
• Many submarine cables, such as the Firmina cable, and the Caribbean Express (CX cable), among others, are expected to be operational in the next two to three years and will connect the region further with the rest of the world
• Investments in submarine cables in the region have grown considerably over the years with the help of enterprises and governments, which continuously strengthen fiber infrastructure for better connectivity with other countries
• Hyperscale operators and telecommunication providers are also investing in submarine cables to improve network connectivity in various Latin American countries

Tax Incentives Boosting Data Center Construction

• Various countries are providing tax incentives to investors based locally or even global investors, which will aid in increased construction of data centers
• The majority of these tax incentives provided by provinces and countries are based on jobs, land taxes, capital, and the lower power price needs of data center investments across regions
• A free trade zone is provided in Columbia as a suitable location for mission-critical facilities enabling tax incentives for the data center developers. Similarly, the southern region of Patagonia, an upcoming digital hub in Chile, is planning to provide tax incentives for data center growth

COMPETITIVE ANALYSIS
• Some of the major vendors involved in theLatin America data center construction market are AECOM, Constructora Sudamericana, Fluor Corporation, and Jacobs Engineering, among others
• These vendors are collaborating with data center operators to provide reliable construction solutions. For instance, ZFB Group is looking to invest around $90 million in the Zetta DC data center based on Tier IV standards
• Core & shell development retains the highest share in construction. In Latin America, the cost of core & shell is lower in countries such as Mexico and Colombia while highest in Chile & Argentina
• In recent years, there has been an immense focus on reducing the energy consumption and carbon emission levels of data centers to improve their green credentials

Key Support Infrastructure
• ABB
• Alfa Laval
• Assa Abloy
• Axis Communications
• Bosch Security Systems
• Caterpillar
• Cummins
• Delta Electronics
• Daikin Applied
• EATON
• Generac Power System
• Honeywell International
• Johnson Controls
• Legrand
• Mitsubishi Electric
• Munters
• Piller Power Systems
• Panduit
• Rittal
• Rolls-Royce
• Schneider Electric
• STULZ
• Siemens
• Vertiv

Prominent Construction Contractors
• AECOM
• Aceco TI
• Constructora Sudamericana
• Fluor Corporation
• Holder Construction
• Jacobs Engineering
• Quark
• ZFB Group

Key Data Center Investors
• Ascenty
• Ava Telecom
• Amazon Web Services (AWS)
• CloudHQ
• EdgeConneX
• Equinix
• Google
• Globenet
• HostDime
• InterNexa
• Lumen Technologies
• Microsoft
• Nabiax
• ODATA
• Scala Data Centers
• Telmex
• Tigo (MALLICOM)
• Quantico
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