"Korea Urgently Needs to Build Hyperscale Data Centers to Lead in Data Center Dominance"

[Asia Economy Reporter Ki-min Lee] With the advancement of the 4th Industrial Revolution, including big data, AI, and autonomous vehicles, and the acceleration of Digital Transformation, the data industry is experiencing rapid growth, leading to calls for the urgent establishment of hyperscale data centers to secure market leadership.

The Federation of Korean Industries (FKI) stated on the 23rd that to lead the growing data center market in Korea, the government and companies must actively respond based on advantages such as low electricity costs and excellent IT infrastructure.

As the 4th Industrial Revolution progresses and data production increases, the need for data centers capable of managing, operating, and utilizing vast amounts of data stably 24/7 is also rising. According to a research team from Tufts University in the U.S., Korea ranks fifth globally in data production, following the U.S., the U.K., China, and Switzerland. The number of domestic data centers has grown annually by 5.9%, from 53 in 2000 to 158 last year. During the same period, commercial data centers increased by an average of 7.4% per year, with 43 currently built and operating. Furthermore, commercial data centers are expected to increase by more than 12 over the next three years starting this year.

The data center industry is turning its attention to hyperscale data centers, which can build and operate over 100,000 servers, enabling efficient management of large-scale data and cost reduction. However, Korea is lagging in the hyperscale data center sector. According to Synergy Research Group, as of July this year, there are 541 global hyperscale data centers, with the U.S. (38%), China (9%), and Japan (6%) leading the market. In Korea, KT opened the first data center capable of accommodating 100,000 servers last November.

The FKI emphasized that for Korea to become a data center hub in Northeast Asia, it must increase the total capacity size of data centers, which is a key criterion for a data center hub. In particular, to foster data centers, the government should respect private sector autonomy to the greatest extent possible, along with policies, infrastructure, and location factors. For example, the strengthening of government supervisory and investigative authority in the Basic Act on Broadcasting and Communications Development, which showed signs of amendment in the 20th National Assembly, is an unnecessary regulation and should be reconsidered carefully in the current National Assembly. The proposed amendment aimed to designate private data centers as national disaster management facilities to prepare for emergencies such as natural disasters and allow the government to manage them safely. However, it faced criticism for excessive data submission demands, infringing on industry autonomy and trade secrets. Kim Bong-man, Director of International Cooperation at FKI, said, "For new industries like data centers, companies should be allowed to operate freely through 'negative regulation' or 'regulatory sandbox' systems," adding, "To foster data centers, the government must guarantee private sector autonomy to the fullest extent."

This content was produced with the assistance of AI translation services.