The Japan colocation market is anticipated to reach a market size of US$20.058 billion in 2030 from an initial value of US$12.310 billion in 2025, and the market is set to grow at a CAGR of 10.26%.
Japan is one of the leading APAC nations where technical advancement and digitization are on the rise. Moreover, the country is experiencing significant growth in its internet penetration and 5G adoption, which has increased its overall data traffic, which has provided a major scope for the development of advanced infrastructure for data stacking and processing. According to the GSMA’s “Mobile Economy Asia Pacific 2023” report, in 2022, 5G accounted for 26% of Japan’s internet subscriptions, and as per the same source, 5G subscriptions are expected to reach 92% by 2030.
Significant growth in digital transformation and the establishment of data protection are driving the demand for colocation data centers in Japan for effective data processing and security. For instance, the Japanese government's “Digital Agency” aims to improve the online services and infrastructure of the country’s public sectors.
Additionally, to tackle the growing cyber threats and unauthorized data access, the Japanese government is implementing various schemes and data protection policies. For instance, in April 2022, the amended “Protection of Personal Information Law” came into effect in Japan, which aimed to bolster personal data privacy and cybersecurity. Such rules and policies will bolster colocation infrastructure development in Japan as they offer high data processing security.
The introduction of 5G has created a boom in the volume of data transmission over the years, which has created a demand for more data centers. Colocation data centers employ up-to-date servers and network technology, which optimizes the overall data processing and storage functions, thereby improving the overall scalability.
Japan is actively investing in 5G technologies through various collaborations and launches to provide users with an effective connectivity and browsing experience. For instance, in May 2024, KDDI Corporation and SoftBank Corp agreed to expand their 5G network in Japan through their joint venture “5G Japan Corporation”. Through the expansion, the companies will establish 100,000 base stations by 2030.
Japan's colocation market, by enterprise size, is analyzed as small, medium, and large, where the large enterprise holds a considerable market share and is projected to show significant growth during the forecast period.
Strategic investments undertaken by the companies to boost digital infrastructure, followed by collaboration with major data centers and colocation service operators in major sectors such as healthcare, BFSI, and private services, are acting as major driving factors for the segment's growth. For instance, in June 2022, Salesforce Japan Co, Ltd and Fujitsu Limited announced their collaboration for the development of a new digital solution for the Japanese healthcare sector.
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Report Metric | Details |
| Market Size Value in 2025 | US$20.058 billion |
| Market Size Value in 2030 | US$12.310 billion |
| Growth Rate | CAGR of 10.26% from 2025 to 2030 |
| Study Period | 2020 to 2029 |
| Historical Data | 2020 to 2023 |
| Base Year | 2024 |
| Forecast Period | 2025 – 2030 |
| Forecast Unit (Value) | USD Billion |
| Segments Covered |
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| Companies Covered | |
| Customization Scope | Free report customization with purchase |
Japan Colocation Market Segmentation: