IMARC Group has recently released a new research study titled “South Korea Data Center Colocation Market Size, Share, Trends and Forecast by Type, Organization Size, End-Use Industry, and Region, 2025-2033”, offers a detailed analysis of the market drivers, segmentation, growth opportunities, trends and competitive landscape to understand the current and future market scenarios.

South Korea Data Center Colocation Market Overview

The South Korea data center colocation market size reached USD 1,381.73 Million in 2024. The market is expected to reach USD 3,525.92 Million by 2033, exhibiting a CAGR of 10.97% during the forecast period 2025-2033. Factors such as rising demand for cost-effective printing, growing adoption of cloud-based services, security concerns, expanding IT infrastructure among SMEs, and government digital initiatives support this growth. Vendors are also leveraging analytics and remote management to enhance operational efficiency and reduce downtime.

Study Assumption Years

• Base Year: 2024
• Historical Year/Period: 2019-2024
• Forecast Year/Period: 2025-2033

South Korea Data Center Colocation Market Key Takeaways

• Current Market Size: USD 1,381.73 Million in 2024
• CAGR: 10.97%
• Forecast Period: 2025-2033
• Increasing interest in AI-optimized infrastructure and facilities tailored for large-scale GPU environments is accelerating market growth.
• Expansion of cloud-backed AI infrastructure is enhancing network reliability, disaster recovery, and regional cloud performance.
• Retail and wholesale colocation are the primary market types.
• Small and medium enterprises as well as large enterprises contribute to market demand.
• Key end-use industries include BFSI, manufacturing, IT and telecom, government, healthcare, retail, among others.
• Major regions covered are Seoul Capital Area, Yeongnam, Honam, Hoseo, and others.

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Market Growth Factors

The South Korea data center colocation market growth is propelled by a rising demand for AI-optimized infrastructure. The country is witnessing new data center deployments designed to handle AI workloads and high-density computing, particularly large-scale GPU environments. This development positions South Korea as a significant player in the AI infrastructure market as companies demand facilities with strong connectivity and technical reliability in urban centers. A notable example is Lambda's partnership with SK Telecom in August 2024 to deploy its AI Cloud platform at SK Broadband's Gasan data center, which supports up to 46MW IT load and thousands of GPUs, boosting AI infrastructure capacity.

Expansion of cloud-backed AI infrastructure is another key growth driver. Providers are investing in advanced data centers equipped to support enterprise AI workloads and critical cloud functions. These facilities improve network reliability, enhance disaster recovery capabilities, and bolster regional cloud performance. Alibaba Cloud's launch of its second South Korea data center in June 2025 to meet AI and cloud services demand exemplifies this trend. It expands local infrastructure capacity and reinforces South Korea's standing as a technology-forward market.

Additional growth factors include rising demand for cost-effective printing, growing adoption of cloud-based services, increased security concerns, and expanding IT infrastructure in small and medium enterprises. Government digitalization initiatives further stimulate the market. Vendors' use of analytics and remote management solutions helps improve operational efficiency and reduce downtime, facilitating further market expansion.

Market Segmentation

Type Insights:

• Retail Colocation: Provides space and resources to multiple tenants, offering flexibility and scalability for small to medium clients.
• Wholesale Colocation: Involves leasing large spaces primarily to single customers needing expansive data center capacity for enterprise-level operations.

Organization Size Insights:

• Small and Medium Enterprises: Demand colocation services to leverage cost-effective IT infrastructure and cloud solutions supporting business growth.
• Large Enterprises: Require extensive colocation services for robust infrastructure, data security, and to support complex digital operations.

End-Use Industry Insights:

• BFSI: Banking, financial services, and insurance companies utilizing data centers for secure and reliable data storage and processing.
• Manufacturing: Industrial firms leveraging colocation services for digital transformation and operational efficiencies.
• IT and Telecom: Providers and enterprises using data center space to host critical IT infrastructure and telecom networks.
• Energy: Companies in energy sectors needing secure and resilient data management solutions.
• Healthcare: Medical and health services requiring compliant and reliable data facilities.
• Government: Public sector agencies deploying digital initiatives supported by colocation infrastructure.
• Retail: Retail businesses utilizing IT for e-commerce and digital customer engagement.
• Education: Educational institutions employing data centers for digital learning platforms and administration.
• Entertainment and Media: Content creators and distributors depending on high-capacity data centers.
• Others: Other sectors requiring colocation services for various digital needs.

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Regional Insights

The dominant region in the South Korea data center colocation market is the Seoul Capital Area. Other key regions include Yeongnam (Southeastern Region), Honam (Southwestern Region), Hoseo (Central Region), and others. These urban hubs offer robust infrastructure, strong connectivity, and are focal points for technological development driving data center demand. The report does not provide exact market share or CAGR by region.

Recent Developments & News

In June 2025, Koramco Asset Management announced plans to invest KRW 10 Trillion (USD 7 Billion) in South Korea’s data center sector by 2032. The firm aims to achieve a 1GW IT-load capacity and become the largest data center operator in the country. Funding strategies include a KRW 5 trillion data center fund, debt financing, and potential REIT listing. This investment is expected to significantly boost colocation capacity and infrastructure development in South Korea.

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