Data centres to boost Thai economy with over 320 billion baht

Phongprapha Napapruekchat, a research analyst at Krungthai COMPASS, attributed the rapid expansion to significant investments from leading global technology firms and regional data centre service providers, including Microsoft, Google, TikTok, CtrlS, NEXTDC and Beijing Haoyang.

This wave of development is expected to generate approximately 130 billion baht in revenue for Thai businesses during the construction and setup of data centres, with the construction sector being the primary beneficiaries.

Phongprapha added that revenue from data centre services is forecast to increase from 57 billion baht in 2023 to 150 billion baht by 2028, reflecting an average annual growth rate of 21.3%, driven by the rising demand for AI technology and continued investment in digital platforms.

Additionally, revenue from the installation of cloud infrastructure and utility services for data centres is expected to surge from 21 billion baht in 2023 to 82 billion baht by 2028, representing an impressive average annual growth of 31.7%.

Telecommunications and power generation businesses are poised to benefit most prominently, with projected annual growth rates of 71.6% and 62.2%, respectively.

To enhance Thailand’s competitiveness in attracting further data centre investment, Phongprapha recommended that both public and private sectors work to improve internet connectivity infrastructure and ensure that electricity costs for data centre providers are not higher than the average rates in other ASEAN countries, such as Vietnam and Indonesia.

He cautioned, however, that rising construction costs—exacerbated by ongoing global trade tensions—could dampen investor confidence. Still, he believes the impact will be moderate, mainly affecting imported IT equipment.

Pacharapoj Nantaramas, executive vice president at Krungthai Bank, noted that Thailand’s digital economy is set for continued growth and will play a crucial role in driving the national economy over the next six years. This outlook is supported by ongoing technological development and proactive government policy.

According to projections by leading tech firms and consultancies including Google, Temasek, and Bain & Company, the value of Thailand’s digital economy is expected to grow at an average annual rate of 13.8%, from 1.6 trillion baht in 2024 to 3.5 trillion baht by 2030, he said.

The expansion of digital technology in sectors such as e-commerce, online media, tourism, and logistics is expected to increase Thailand’s data traffic by 1.75 times between 2023 and 2030. This trend underpins the growing demand for data centres to store and process vast volumes of information.

Nevertheless, Pacharapoj pointed out that Thailand currently has relatively few domestic data centres compared to other ASEAN nations. As of 2023, Thailand's data centre capacity was 13.7 times smaller than Singapore’s, 3.2 times smaller than Malaysia’s, and 2.5 times smaller than Indonesia’s.

This gap presents a valuable opportunity to attract leading global data centre providers to invest more heavily in Thailand, he said.