Market Size of south america data center Industry
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Study Period | 2017 - 2029 |
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Market Volume (2024) | 1.15 Thousand MW |
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Market Volume (2029) | 1.81 Thousand MW |
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Largest Share by Tier Type | Tier 3 |
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CAGR (2024 - 2029) | 9.37 % |
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Largest Share by Country | Brazil |
Major Players |
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*Disclaimer: Major Players sorted in no particular order |
South America Data Center Market Analysis
The South America Data Center Market size is estimated at 1.15 thousand MW in 2024, and is expected to reach 1.81 thousand MW by 2029, growing at a CAGR of 9.37%. Further, the market is expected to generate colocation revenue of USD 5,009.1 Million in 2024 and is projected to reach USD 8,524.7 Million by 2029, growing at a CAGR of 11.22% during the forecast period (2024-2029).
USD 5,009.07 Million
Market Size in 2024
USD 8,524.6 Million
Market Size in 2029
18.0%
CAGR (2017-2023)
11.2%
CAGR (2024-2029)
IT Load Capacity
1,154 MW
Value, IT Load Capacity, 2024
The IT load capacity of the data center market will have steady growth and is expected to reach 1,806.4 MW by 2029. Digitalization in Chile, Brazil, Argentina and other countries in the region would increase DC market demand.
Total Raised Floor Space
Sq. Ft. 5.09 M
Volume, Raised Floor Space, 2024
The total raised floor area in the region is expected to increase to 7.8 million sq. ft by 2029. Upcoming data centers by Scala Data Centers, Nabiax, and Ascenty Data Centers across various countries in region would drive the market.
Installed Racks
254795
Volume, Installed Racks, 2024
The total number of installed racks is expected to reach 392,072 units by 2029. Brazil is expected to house the maximum number of racks by 2029. Fiber connectivity investments are increasing with data center construction trends.
# of DC Operators & DC Facilities
85 and 206
Volume, DC Facilities, 2024
There are 206 colocation data center facilities in South America. The increasing reliability in power supply, and high demand for data center services from end users are increasing the DC construction region.
Leading Market Player
26.3%
Market Share, Ascenty (Digital Realty Trust, Inc.), Inc.)
Ascenty (Digital Realty Trust Inc.) holds the highest market share of 26.3% compared to its other competitors in the market. The company operates at an IT load capacity of 185.37 MW and is expected to increase its capacity in future.
Tier 3 data centers accounts for majority market share in 2023, Tier-4 is the fastest growing in forecasted period
- The Tier 3 segment currently has a majority share in the South American market due to the major advantage of its features. This tier type has a high redundancy level and multiple paths for power and cooling. These data centers have an uptime of around 99.982%, translating into a downtime of 1.6 hours per year. With the increasing adoption of edge and cloud connectivity, the growth in the Tier 3 segment is expected to increase further.
- Brazil hosts the maximum number of Tier 3 data centers in the region. In 2022, 58 data centers in Brazil had Tier 3 certification. In 2022, Sao Paulo hosted the maximum number of Tier 3 data centers in the country, with a market share of 77.9% and Rio de Janeiro with 27.2%. Among other hotspots (Ceara, Cascavel, Curitiba, Ribeirao Preto, and others), the share was 14.8%. The Tier 3 segment is expected to grow from 649 MW in 2023 to 987.67 MW in 2029, at a projected CAGR of 7.25%.
- The Tier 4 segment is expected to record the highest CAGR of 20.94% during the forecast period. Various developed countries, such as Brazil, are focusing on adopting the Tier 4 certification to be completely fault-tolerant and redundant for every component. This is the major reason why even the developing regions are adopting the Tier 4 type. Major players in the market are expected to expand their facilities, which include Scala Data Centers (366 MW) with 17 facilities and ODATA (24 MW) with one facility during the forecast period.
- The Tier 1 & 2 segment is expected to showcase significant growth in developing countries, with a low GDP rate index in under-developed countries with a high expense burden. These countries include Bolivia, Paraguay, Suriname, and Ecuador, which have the majority of SMEs that cannot afford Tier 3 and 4 facilities.
Brazil holds the major share and expected to continue the dominance during the study period
- Brazil and Chile hold the largest shares in the South American data center market. The Brazilian government provides incentives through the Regime Especial de Tributação do Programa Nacional de Banda Larga (REPNBL) program, which includes incentives for purchasing infrastructure that help improve colocation services in the country. Brazil has witnessed an absolute growth of 40% in investments from the 2021 values due to investments from colocation providers such as Ascenty, Scala Data Centers, and ODATA and telecom operators such as GlobeNet Telecom, Ava Telecom, and Embratel. Sao Paulo, Brazil's significant financial capital, serves as the primary data center hub. Other cities, such as Rio de Janeiro and Fortaleza, are major investment locations in Brazil.
- Chile has competitive energy prices, primarily fueled by plans to take advantage of its natural renewable energy generation potential over the coming years. Energy costs have dropped to one-third of what they were five years ago, mainly based on renewable energy that now makes up 46% of the total produced. Chile traditionally has some of the region's best telecommunications infrastructure, and two major fiber projects are underway to ensure it will have a fully redundant fiber backbone. These include the state-funded Fibra Optica Austral (FOA) submarine cable connecting the deep south and Gtd's 3,500 km north-south submarine cable. In 2022, colocation operators, such as Scala Data Centers, ODATA, Ascenty (Digital Realty), and EdgeConneX, were the major investors in the Chilean data center market.
- In Argentina, Buenos Aires is the major investment destination, with the identified third-party facilities in the city contributing to over 90% of the existing power capacity. Most existing data centers are smaller facilities built over a limited area. The International Renewable Energy Agency (IRENA) stated that renewable energy contributed to around 33% of the overall electricity capacity in 2020 in Argentina, and the country aims to generate 20% of the electricity via renewable sources by 2025. The country aims to be one of the largest data center hubs in the coming time period.
South America Data Center Industry Segmentation
Large, Massive, Medium, Mega, Small are covered as segments by Data Center Size. Tier 1 and 2, Tier 3, Tier 4 are covered as segments by Tier Type. Non-Utilized, Utilized are covered as segments by Absorption. Brazil, Chile are covered as segments by Country.
- The Tier 3 segment currently has a majority share in the South American market due to the major advantage of its features. This tier type has a high redundancy level and multiple paths for power and cooling. These data centers have an uptime of around 99.982%, translating into a downtime of 1.6 hours per year. With the increasing adoption of edge and cloud connectivity, the growth in the Tier 3 segment is expected to increase further.
- Brazil hosts the maximum number of Tier 3 data centers in the region. In 2022, 58 data centers in Brazil had Tier 3 certification. In 2022, Sao Paulo hosted the maximum number of Tier 3 data centers in the country, with a market share of 77.9% and Rio de Janeiro with 27.2%. Among other hotspots (Ceara, Cascavel, Curitiba, Ribeirao Preto, and others), the share was 14.8%. The Tier 3 segment is expected to grow from 649 MW in 2023 to 987.67 MW in 2029, at a projected CAGR of 7.25%.
- The Tier 4 segment is expected to record the highest CAGR of 20.94% during the forecast period. Various developed countries, such as Brazil, are focusing on adopting the Tier 4 certification to be completely fault-tolerant and redundant for every component. This is the major reason why even the developing regions are adopting the Tier 4 type. Major players in the market are expected to expand their facilities, which include Scala Data Centers (366 MW) with 17 facilities and ODATA (24 MW) with one facility during the forecast period.
- The Tier 1 & 2 segment is expected to showcase significant growth in developing countries, with a low GDP rate index in under-developed countries with a high expense burden. These countries include Bolivia, Paraguay, Suriname, and Ecuador, which have the majority of SMEs that cannot afford Tier 3 and 4 facilities.
| Data Center Size | |
| Large | |
| Massive | |
| Medium | |
| Mega | |
| Small |
| Tier Type | |
| Tier 1 and 2 | |
| Tier 3 | |
| Tier 4 |
| Absorption | |||||||||||||||||
| Non-Utilized | |||||||||||||||||
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| Country | |
| Brazil | |
| Chile | |
| Rest of South America |
South America Data Center Market Size Summary
The South America data center market is experiencing significant growth, driven by the increasing demand for cloud and edge connectivity. The market is characterized by a diverse range of data center types, with the Tier 3 segment currently holding a dominant position due to its high redundancy and reliability features. Brazil stands out as a key player in this market, hosting the majority of Tier 3 data centers, particularly in Sao Paulo and Rio de Janeiro. The country's favorable government policies and substantial investments from colocation providers and telecom operators have further bolstered its market position. Meanwhile, Chile is emerging as a competitive market due to its low energy costs and robust telecommunications infrastructure, attracting major investments from colocation operators.
The market landscape is fragmented, with several key players such as Ascenty, Scala Data Centers, and ODATA leading the charge. These companies are expanding their facilities to meet the growing demand, particularly in Brazil and Chile. The Tier 4 segment is anticipated to grow at the highest rate, as countries like Brazil focus on achieving fault tolerance and redundancy. In contrast, Tier 1 and 2 segments are expected to see growth in developing countries with limited financial resources. Argentina is also positioning itself as a potential data center hub, with Buenos Aires being the primary investment destination. The region's transition to 5G and the increasing digital usage, especially in Brazil, are further propelling the demand for data centers, highlighting the market's dynamic nature and potential for future expansion.
South America Data Center Market Size - Table of Contents
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1. MARKET SEGMENTATION (INCLUDES MARKET SIZE IN VOLUME, FORECASTS UP TO 2029 AND ANALYSIS OF GROWTH PROSPECTS)
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1.1 Data Center Size
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1.1.1 Large
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1.1.2 Massive
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1.1.3 Medium
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1.1.4 Mega
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1.1.5 Small
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1.2 Tier Type
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1.2.1 Tier 1 and 2
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1.2.2 Tier 3
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1.2.3 Tier 4
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1.3 Absorption
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1.3.1 Non-Utilized
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1.3.2 Utilized
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1.3.2.1 By Colocation Type
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1.3.2.1.1 Hyperscale
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1.3.2.1.2 Retail
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1.3.2.1.3 Wholesale
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1.3.2.2 By End User
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1.3.2.2.1 BFSI
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1.3.2.2.2 Cloud
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1.3.2.2.3 E-Commerce
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1.3.2.2.4 Government
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1.3.2.2.5 Manufacturing
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1.3.2.2.6 Media & Entertainment
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1.3.2.2.7 Telecom
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1.3.2.2.8 Other End User
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1.4 Country
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1.4.1 Brazil
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1.4.2 Chile
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1.4.3 Rest of South America
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South America Data Center Market Size FAQs
What is the current South America Data Center Market size?
The South America Data Center Market is projected to register a CAGR of 9.37% during the forecast period (2024-2029).
Who are the key players in South America Data Center Market?
Ascenty (Digital Realty Trust Inc.), Lumen Technologies Inc., Scala Data Centers, SONDA SA and Terremark (Verizon) are the major companies operating in the South America Data Center Market.
