Joshua Robinson, CEO of Quantum DC Advisory, believes Thailand’s data center capacity could grow 17 times, from 120 MW to 2GW, in the next five to seven years.
Maybank Investment Bank, which hosted Robinson, mentioned in a report that Robinson believes this growth will be driven by demand from Thailand’s 72 million people and businesses and favorable supply conditions. These factors could lead to a 2% to 3% higher return on investment, with an added boost from artificial intelligence (AI).
Robinson also believes that since other ASEAN markets are already well-developed, Thailand could become a key market that meets the demand from neighboring countries like the Philippines, Cambodia, Laos, Myanmar, and Vietnam (CLMV).
He also mentioned that the risk of having too many data centers in Thailand is low for the next ten years, as the market is just starting.
He stated that Thailand’s data center market differs from Indonesia’s, which has been developing for ten years.
He said, “The current increase in supply has given a somewhat misleading view of capacity, but I expect this to be fully used up within 12 to 16 months.”
“Thailand’s buildout and absorption cycles will likely be much shorter than in more mature markets, with Thailand requiring significant catch-up development to meet growing demand,” he said.
With the current capacity at around 120MW, he is highly optimistic and believes that Thailand’s capacity could surpass 2GW in about five years.
He believes the high vacancy rate shows that the market is changing, with recent expansions outpacing the current demand.
This is a positive sign, as it shows enough capacity to support future growth.
He also pointed out that Thailand has active colocation markets in Bangkok and development opportunities in southern areas like Chonburi, where subsea cables connect.
He expects vacancy rates to drop to single digits within three to five years as demand matches the supply.
Robinson also mentioned that Thailand is unique because it serves both regional and domestic markets.
With over 70 million people in Thailand and the second largest economy in Southeast Asia, he said there are plenty of business opportunities for companies like AWS and TikTok.
“These platforms come to Thailand to better support their users, both within the country and in neighboring countries like Vietnam and the Philippines.”
“There is room for a lot more enterprise use cases as Thai cities have roughly a 20m population with a vibrant retail colocation market and vast amounts of subsea cables,” he said.
With strong growth signals and many new developments, he is very confident that Thailand will grow quickly in the next three to five years.
He added that Thailand’s ongoing shift to digital is creating strong demand for retail colocation services, which are more profitable than hyperscale services, even though they are smaller in size.
According to the note, Thailand is experiencing significant hyper scaler investments (Google USD1B, AWS USD5B over 15 years, and ByteDance $9 billion), supported by government
incentives such as Thailand 4.0 and the Eastern Economic Corridor initiative.
Unlike Singapore, which is too expensive, and Johor, which mainly caters to Chinese hyperscalers, Thailand offers opportunities for regional and local markets, with a population of 70 million.
Thailand has several advantages over its neighbors, including its central location, stable environment with low risk of earthquakes, relatively stable politics, affordable land, and the possibility of lower power costs.
Additionally, Thailand is at an earlier stage of data center development than Indonesia or Malaysia, giving it more room for growth.
Land is more affordable in Thailand, and tax breaks on capital equipment could boost the return on investment (IRR) by 2.5% to 3% over the next five years.
Construction costs in Thailand are around $8 million to $8.5 million per megawatt, while in Indonesia, they are over $10 million.
“Thailand can serve neighboring markets like Vietnam and the Philippines, which have historically been served from Singapore,” said Robinson.
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