Japan's data center market faces significant supply limitations, which will determine competition and growth prospects in the sector, S&P Global Ratings said in a recent release.
Construction of large data centers has been time-consuming due to the required power capacity and grid networks, appropriate land, and construction resources, S&P said.
The rating agency forecasts only a modest supply expansion over the next several years due to power availability and land acquisition restrictions.
Current data center operator majors such as local telecoms will likely continue with their competitive edge over future players, S&P said.
Investments will shape the country's data center market if near-term limitations are addressed, with sufficient financial ability and new facilities serving as key factors, the rating agency said.