US Data Center Construction Market 2024–2033

Reports Description

As per the current market research conducted by the CMI Team, the US Data Center Construction Market is expected to record a CAGR of 8.7% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 41,475.8 Million. By 2033, the valuation is anticipated to reach USD 87,874.1 Million.

The data center construction market involves the design, building, and maintenance of facilities that house computer systems and related components, such as telecommunications and storage systems. These centers support various functions, including data storage, processing, and distribution for businesses and online services.

Key components include electrical systems, cooling solutions, security, and physical infrastructure. The market is driven by the growing demand for cloud services, IoT, big data, and edge computing. Companies and colocation providers invest in new data centers or upgrade existing ones to enhance performance, efficiency, and sustainability, meeting the rising global digital and data storage needs.

US Data Center Construction Market – Significant Growth Factors

The US Data Center Construction Market presents significant growth opportunities due to several factors:

• Rising Demand for Cloud Services: Increased adoption of cloud computing by businesses and individuals has created a substantial need for new and expanded data centers to handle growing data storage and processing requirements.

• Expansion of IoT and Big Data: The proliferation of IoT devices and the generation of vast amounts of data necessitate robust data center infrastructure to process, store, and analyze this information efficiently.

• Advancements in AI and Machine Learning: The integration of AI and machine learning in various applications require significant computational power, driving the demand for high-performance data centers.

• Adoption of Edge Computing: The shift towards edge computing, driven by the need for reduced latency and improved performance, has led to the construction of smaller, localized data centers closer to end-users.

• Sustainability and Green Data Centers: There is a growing emphasis on building environmentally sustainable data centers that utilize renewable energy sources and energy-efficient technologies, presenting opportunities for companies to lead in green construction practices.

• Expansion into Emerging Markets: Expanding data center infrastructure into less developed regions or underserved areas within the US provides opportunities to tap into new markets and meet the rising digital demands of these areas.

• Adoption of Modular and Prefabricated Data Centers: The increasing acceptance of modular and prefabricated data centers offers opportunities for faster deployment, scalability, and cost savings. These solutions allow for quicker responses to market demands and more efficient use of space and resources, appealing to a wide range of clients seeking rapid and flexible data center expansion.

US Data Center Construction Market – Key Developments

The US Data Center Construction Market has seen several key developments in recent years, with companies seeking to expand their market presence and leverage synergies to improve their product offerings and profitability. Some notable examples of mergers and acquisitions in the US Data Center Construction Market include:

• In 2024, Prime Data Centers proposed a USD 1.3 billion data center complex in Caldwell County, near Austin, Texas. This significant investment is expected to drive demand for data center construction players, reflecting growing opportunities in the US data center construction market.

• In 2023, Digital Realty announced plans to develop ROM1, a Tier 4 facility in Rome, Italy, starting in Q4/2023. This expansion underlines their PlatformDIGITAL strategy, enhancing critical infrastructure deployment for customers. The site’s strategic location near the coast enables future subsea cable landings, reinforcing interconnections and meeting Italy’s increasing data center needs.

These key developments have helped companies expand their product offerings, improve their market presence, and capitalize on growth opportunities in the US Data Center Construction Market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

US Data Center Construction Market – Significant Threats

The US Data Center Construction Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Supply Chain Disruptions: Global supply chain disruptions, such as shortages of critical materials or components due to geopolitical factors or natural disasters, can significantly delay construction projects and increase costs, impacting project timelines, contractual obligations, and profitability.

• Rising Construction Costs: Escalating costs of labor, materials, and regulatory compliance, exacerbated by economic fluctuations and inflationary pressures, can squeeze profit margins and deter new investments in data center construction projects, affecting overall project viability and return on investment.

• Cybersecurity Risks: Increasing cyber threats and breaches targeting data centers pose significant risks to data security, potentially leading to substantial financial losses, reputational damage, regulatory fines, and legal liabilities, necessitating robust cybersecurity measures and continuous monitoring to mitigate risks effectively.

• Regulatory and Permitting Challenges: Complex and evolving regulatory requirements, including stringent zoning laws, environmental regulations, and building codes, can create hurdles in obtaining necessary permits and approvals for data center construction projects, resulting in delays, additional costs, and operational disruptions.

• Competition and Market Saturation: Intense competition among data center providers and construction firms, coupled with market saturation in key regions, may lead to heightened pricing pressures, reduced profit margins, and increased difficulty in securing new projects, requiring differentiation strategies and innovative approaches to sustain growth in a competitive landscape.

Category-Wise Insights:

By Infrastructure Type

• Electrical Infrastructure: Involves power distribution, UPS systems, and backup generators. Trends include the increasing adoption of renewable energy sources and advanced power management systems to enhance efficiency, reliability, and resilience against power disruptions.

• IT Infrastructure: Comprises servers, storage systems, and networking equipment. Trends include the shift towards hyper-converged infrastructure (HCI) and software-defined networking (SDN) for greater scalability, flexibility, and integration with cloud services.

• PD and Cooling Infrastructure: Includes precision cooling units, airflow management, and power distribution (PDUs). Trends focus on energy-efficient cooling solutions like liquid cooling and containment systems to optimize cooling efficiency, reduce operational costs, and minimize environmental impact.

• Mechanical Infrastructure: Encompasses racks, raised floors, and fire suppression systems. Trends include modular construction methods and innovative fire suppression technologies such as clean agent systems and early detection systems to improve space utilization, safety standards, and operational reliability.

• General Construction: Covers building design, structural components, and physical security. Trends emphasize sustainable construction practices, LEED certification, and advanced security systems integrating biometrics and AI-driven surveillance to meet stringent regulatory requirements, enhance operational efficiency, and reduce environmental footprint.

• Others: Encompasses specialized infrastructure like telecommunication networks and data center management systems. Trends include the integration of AI and automation for predictive maintenance, real-time monitoring, and optimization of infrastructure performance to ensure seamless operations and meet growing demands for data processing and connectivity.

By Tier Standards

• Tier I: Basic infrastructure with a single path for power and cooling. Typically used by small businesses or for non-critical applications where uptime requirements are minimal.

• Tier II: Adds redundancy with some backup components. Suitable for small to medium-sized enterprises needing improved reliability, offering better uptime than Tier I but with potential for downtime during maintenance.

• Tier III: N+1 redundancy with concurrent maintainability. Popular for colocation facilities and larger enterprises, ensuring high availability and operational resilience. Allows for scheduled maintenance without disrupting operations.

• Tier IV: Fault-tolerant design with 2N redundancy. Ideal for mission-critical applications requiring minimal downtime and maximum reliability. Provides the highest level of uptime assurance, suitable for enterprises demanding continuous operation without any interruptions.

By Data Center Type

• Enterprise Data Centers: Designed for a single organization’s exclusive use, typically to support their internal IT infrastructure. Trends include increasing adoption of hybrid cloud solutions and emphasis on security and scalability.

• Colocation Data Centers: Facilities where multiple organizations house their servers and networking equipment. Trends include demand for high-density hosting, connectivity options, and energy efficiency to reduce operational costs.

• Hyperscale Data Centers: Massive facilities designed to support cloud services at scale. Trends include modular construction for rapid deployment, use of renewable energy sources, and advancements in cooling technologies for energy efficiency.

• Edge Data Centers: Small facilities located closer to end-users to reduce latency and improve performance for edge computing applications. Trends include deployment in urban areas, integration with 5G networks, and focus on compact, modular designs.

• Others: This category can include specialty data centers like telecom data centers, disaster recovery centers, and research facilities. Trends vary widely based on specific industry needs, ranging from stringent security requirements to specialized environmental controls and compliance standards.

By End-User Industry

• IT and Telecommunications: This sector demands robust data centers to support cloud services, 5G networks, and network infrastructure, driving high-density and scalable data center designs that accommodate rapid data growth and ensure low latency.

• BFSI (Banking, Financial Services, and Insurance): BFSI requires secure and compliant data centers for data storage, transaction processing, and regulatory reporting, emphasizing stringent security measures, regulatory compliance such as PCI DSS and GDPR, and resilience against cyber threats and operational disruptions.

• Government: Government sectors prioritize data centers for secure data storage, citizen services, and disaster recovery, with a focus on resilient and compliant facilities that meet stringent government regulations and standards for data security and continuity.

• Healthcare: Healthcare relies on data centers for electronic health records (EHRs), medical imaging, telemedicine, and genomic research, necessitating HIPAA-compliant infrastructure, high availability, and robust disaster recovery capabilities to ensure patient data privacy and operational continuity.

• Energy: Energy sectors require data centers for monitoring and managing grid operations, renewable energy integration, and predictive analytics, emphasizing energy efficiency, sustainability in data center designs, and real-time data processing capabilities to optimize operations and ensure grid reliability.

• Retail: Retailers leverage data centers for e-commerce platforms, customer data analytics, inventory management, and supply chain optimization, emphasizing scalable, agile infrastructure that supports omnichannel retail strategies and handles seasonal demand fluctuations efficiently.

• Others: Various industries, including education, media, manufacturing, and transportation, increasingly rely on data centers for digital transformation initiatives, IoT deployments, content delivery, and industrial automation, driving diverse and specialized data center requirements tailored to specific operational needs and technological advancements.

Report Scope

Competitive Landscape – US Data Center Construction Market

The US Data Center Construction Market is highly competitive, with a large number of manufacturers and retailers operating in the US. Some of the key players in the market include:

• Turner Construction Company
• Holder Construction Group LLC
• DPR Construction
• Mortenson Construction
• Whiting-Turner Contracting Company
• Structure Tone
• Hensel Phelps Construction Co.
• Gilbane Building Company
• Clark Construction Group LLC
• JE Dunn Construction Group
• Fortis Construction Inc.
• AECOM
• McCarthy Building Companies Inc.
• The Walsh Group
• Balfour Beatty Construction US
• Others

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships.

New players entering the data center construction market are often adopting innovative approaches such as modular construction, prefabricated components, and sustainable designs to differentiate themselves. These strategies allow them to offer cost-effective and scalable solutions amidst growing demand.

Key players like Turner Construction, DPR Construction, and Mortenson Construction dominate the market by leveraging extensive experience, strong industry relationships, and proven track records in delivering large-scale, high-security data center projects. They maintain leadership through technical expertise, adherence to stringent quality standards, and the ability to handle complex regulatory and operational challenges efficiently.

The US Data Center Construction Market is segmented as follows:

By Infrastructure Type

• Electrical Infrastructure
• IT Infrastructure
• PD and Cooling Infrastructure
• Mechanical Infrastructure
• General Construction
• Others

By Tier Standards

• Tier I
• Tier II
• Tier III
• Tier IV

By Data Center Type

• Enterprise Data Centers
• Colocation Data Centers
• Hyperscale Data Centers
• Edge Data Centers
• Others

By End-User Industry

• IT and Telecommunications
• BFSI (Banking, Financial Services, and Insurance)
• Government
• Healthcare
• Energy
• Retail
• Others