The total addressable market size of servers in South Korea, in terms of enterprise spending opportunity, is poised to grow at a compound annual growth rate (CAGR) of 5% between 2020 and 2025, driven by the acceleration in digital transformation initiatives among enterprises in the country, and the subsequent rise in their demand for high computing power, says GlobalData, a leading data and analytics company.

GlobalData Market Opportunity Forecasts to 2025: ICT in South Korea reveals that rising adoption of disruptive technologies like artificial intelligence, IoT, and big data as a part of their digital transformation efforts to improve operational efficiencies, enhance services and gain competitive advantage, is also encouraging enterprises to upgrade their technology infrastructure, including servers to support such workloads.

Saurabh Daga, Technology Analyst at GlobalData, comments: “Several enterprises in the country are accelerating their remote working, online service, cloud computing and e-commerce strategies to emerge stronger from the COVID-19 inflicted disruptions and are hence upgrading their compute and storage infrastructure to support these implementations. This will help enterprise server spending in South Korea to grow from US$1bn in 2020 to US$1.3bn in 2025.”

KT Corp, for instance, launched a new Internet data center in southwestern Seoul in May 2021. LG Uplus Corp. is investing KRW318.1bn (US$267.63m) to build a new Internet data center by the end of 2023. In July 2021, Digital Reality, a global provider of cloud and carrier-neutral data center and interconnection solutions, announced that it would build its second data center (64MW) in South Korea, scheduled for delivery in Q1-2023. The company is already engaged in the construction of its first data center, which is expected to go online in Q4-2021.

Among all the server hardware segments, low-end servers will account for the largest share of total revenue opportunity through the forecast period 2020-2025 due to their low-cost performance benefits. Enterprise spending on mid-range servers, on the other hand, is set to grow at the fastest CAGR of 8.1% over the forecast period.

Mr Daga concludes: “While the large (1,001-4,999 employees) & very large (5,000+ employees) enterprise segments will jointly account for largest share of the total server spending in South Korea through the forecast period, the combined spending from micro (1-50 employees), small (51-250 employees) and medium (251-1000 employees) enterprises will increase at a marginally faster CAGR of 5.1% over the forecast period.

“The ICT ministry’s technology support for small & medium enterprises (SME), and The Ministry of SMEs and Startups’ KRW1.5 trillion (US$1.4bn) investment in startups will especially drive growth of this segment.”