Equinix, Inc. (Nasdaq: EQIX), the world’s digital infrastructure companyTM, today announced the signing of an agreement to form a US$525 million joint venture in the form of a limited liability partnership with GIC, Singapore’s sovereign wealth fund, to develop and operate two xScale data centers in Seoul, Korea.
This new joint venture will bring the global xScale data center portfolio to more than US$8 billion across 36 facilities, and an expected greater than 720 MW of power capacity when completed and fully constructed.
Charles Meyers, President and CEO, Equinix, commented, “More and more organizations are embracing a digital-first strategy to scale their operations, enhance the experiences of their customers, and unlock the value of technologies like 5G, IoT, artificial intelligence (AI) and machine learning (ML). Korea and the broader Asia-Pacific market are both enablers and beneficiaries as organizations prioritize digital transformation.
To address demand for cloud and digital infrastructure, we have continued to invest in the region through the expansion of International Business ExchangeTM (IBX®) capacity and locations, as well as the expansion of our hyperscale program, xScale, in Australia, and now Korea.”
The two facilities under this joint venture, to be named SL2x and SL3x, are expected to provide more than 45 megawatts (MW) of power capacity to serve the unique core workload deployment needs of hyperscale companies, including the world’s largest cloud service providers. With more hyperscale providers expanding in Korea to support businesses’ digital infrastructure needs, the cloud computing market in the country is expected to flourish.
According to IDC Korea, based on its recent publication of ‘Korea Cloud IT Infrastructure Market Forecast, 2021’, the Cloud IT infrastructure market in Korea is expected to reach an average annual growth rate (CAGR) of 15% over the next five years, reaching approximately US$1.86 billion (2.2189 trillion won) in sales by 2025. The Global Interconnection Index (GXI Vol. 5), an annual market study recently published by Equinix, also estimates that Seoul will have the most interconnection bandwidth from hyperscale providers within Asia-Pacific by 2024.
To date, seven xScale data centers have opened globally, with more currently under development. The establishment of xScale data centers in Korea will allow hyperscale providers to add core deployments to their existing access point footprints at Equinix, enabling their growth on a single platform that can immediately span 65 global metros and offer direct interconnection to their customers and strategic business partners.
- Equinix entered the Korean market in 2019 with its first IBX, SL1. At the facility, customers can connect their corporate IT infrastructure to global hyperscale providers, including Alibaba Cloud, Amazon Web Service, Google Cloud, Microsoft Azure and Oracle Cloud, via Equinix FabricTM, for a high-performance solution and enhanced user experience. With this xScale expansion, these hyperscale providers can continue to grow at Equinix, in close proximity to an ecosystem of more than 10,000 customers on its growing platform of more than 235 data centers around the world.
- xScale data centers offer access to Equinix’s comprehensive suite of interconnection and digital services. These services will tie into the hyperscale companies’ existing access points at Equinix, thereby increasing the speed of connectivity to their existing and future enterprise customers.
- The two new xScale facilities in Korea will also align with Equinix’s Future First sustainability strategy and 100% renewable energy goal. Equinix has operated with 100% renewable energy in Korea since 2020. Equinix is also the first in the data center industry to commit to reaching global climate-neutrality by 2030, backed by its science-based targets (SBT) and sustainability innovation agenda. Equinix has continued to make advancements in the way it designs, builds and operates its data centers with high energy-efficiency standards, and all xScale data centers are expected to be LEED certified (or the equivalent regional certification).
- Under the terms of Equinix’s joint venture agreement with GIC, GIC will own an 80% equity interest in the joint venture, and Equinix will own the remaining 20% equity interest. The joint venture is expected to close in Q1 2022, pending regulatory approval and other closing conditions.