Investing tens of trillions of VND.
Viettel Group is rapidly constructing a data storage and high-tech research and development center at Tan Phu Trung Industrial Park (Cu Chi District, Ho Chi Minh City).
In mid-May 2023, Vice Chairman of the Ho Chi Minh City People's Committee Vo Van Hoan presented the Investment Registration Certificate for this center project to Viettel with an investment capital of VND 14,700 billion, implemented on an area of 40,000 m² . Phase 1 is expected to be operational from Q4 2025 and Phase 2 from Q1 2028.
This project, in the field of digital infrastructure, realizes the investment memorandum between Viettel and the Ho Chi Minh City People's Committee in supporting digital transformation goals at the Investment Promotion Conference in Hoc Mon and Cu Chi districts in April 2022. A Viettel representative stated that the project serves as a data hub attracting foreign businesses to Vietnam, such as Microsoft, Google, and Amazon, and provides broadband connectivity from Ho Chi Minh City to destinations worldwide .
Not only Viettel Group, but many other technology companies in Ho Chi Minh City are also investing thousands of billions of VND in building data centers. A prime example is the CMC Data Center Tan Thuan (District 7, Ho Chi Minh City), with an investment of 1,500 billion VND, which is one of the most modern and secure data centers in Vietnam and Southeast Asia. CMC Data Center Tan Thuan was designed by B-Barcelona Singapore, adhering to the strictest standards for a modern data center such as PCI DSS, ISO 27001:2013, ISO 9001:2015…
“The center serves Ho Chi Minh City's development goal of becoming a high-quality, technologically advanced service city by 2030, leading in digital economic and social development. To achieve that goal, the direct participation of powerful technology companies is crucial. The commissioning of CMC Data Center Tan Thuan also marks a new step in bringing Vietnam closer to its chosen goal of becoming a Digital HUB for the Asia-Pacific region,” said Mr. Nguyen Trung Chinh, Chairman of the Board and CEO of CMC Technology Group.
Similarly, VNG is also building a new data center in Tan Thuan Export Processing Zone (District 7, Ho Chi Minh City) with a scale of 7,800m² , usable floor area of 2,400m² , providing 410 racks (server installation cabinets) and is expected to expand to 1,600 racks to flexibly and promptly meet the strong growth in Vietnam's digital transformation process. VNG uses the most advanced technologies in the data center industry, including a dual redundant power system to ensure stable power supply and a customized DCIM system used for automatic operation and monitoring to minimize human errors, quickly detect and correct technical faults.
Previously, a number of businesses such as Viettel, VNPT, and MobiFone… had invested in data centers in many provinces and cities. MobiFone has invested in four data centers in Hai Phong City, Da Nang City, Ho Chi Minh City, and Dong Nai province. MobiFone aims to own seven new data centers by 2025 and expand the scale of its existing data centers to meet the digital transformation needs of its corporate and business customers.
The potential is still great.
Currently, the country has 33 data centers operated by 48 service providers, with an estimated total capacity of approximately 80MW – as of Q1 2024. The main data center clusters are located in Hanoi and Ho Chi Minh City. The Vietnamese data center market generated revenue of US$685 million in 2023 and is expected to increase to US$1.44 billion by 2029, with a compound annual growth rate of 13.1%.
Data centers are receiving increasing investment as many foreign e-commerce businesses set up servers in Vietnam to meet regulations and cater to the growing customer base here.
Government Decree 53/2022/ND-CP stipulates that foreign businesses providing services in Vietnam must store information and data of Vietnamese users domestically. The wave of foreign investment has also led to increased demand for data storage and processing from multinational corporations.
According to the latest report from Viettel – CHT Co., Ltd. (Viettel IDC), the global data center market is worth approximately US$321 billion, with an average growth rate of 7.3% per year. The Asia-Pacific region is one of the most dynamic data center markets, projected to grow by 19% per year until 2028. The market size in Vietnam is forecast to reach US$1.266 trillion by 2030, with an average growth rate of 10.8% per year.
However, according to Ms. Trang Bui, General Director of Cushman & Wakefield Group, the data center market in Vietnam is still in its nascent stage with a modest growth rate. With competitive construction costs and land prices, and a prime geographical location, Vietnam is an emerging market that is always on the radar of investors. This is quite consistent with statistics from international organizations that note that Vietnam's data center market is still small compared to Southeast Asian countries such as Singapore and Malaysia.
Leaders of the Ministry of Information and Communications believe that the demand for data centers will continue to increase in the coming time. The strong investment by Vietnamese businesses in data centers affirms the view that Vietnamese data is a resource and asset of Vietnam, and therefore must be stored and processed in Vietnam or under Vietnam's permission. This also shows that national digital sovereignty is closely related to Vietnam's digital infrastructure, because digital infrastructure is not only the infrastructure of information and communication, but also the infrastructure of the digital economy, promoting digital transformation.
BA TAN
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