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Bu Shuqing
Morgan Stanley expects Asia to attract more than $100 billion in artificial intelligence and data centre infrastructure investment over the next 10 years, when Southeast Asia will become a centre of growth. Due to the high reliability, high infrastructure speed and low electricity price of Asian power grid, the AI demand of Asian power grid is much faster than that of the United States.
As the main position of the global artificial intelligence competition, the fierce wave of infrastructure investment in the United States has given birth to a huge demand for electricity, driving the national power industry to speed up the pace of reform, and American power stocks soared collectively; at the same time, investors should also see that Asia is rapidly becoming a hot place for AI infrastructure investment, and the demand for electricity is also huge.
Earlier this week, a team of analysts led by Morgan Stanley Mayank Maheshwari reported that Asia will attract more than $100 billion in artificial intelligence and data centre infrastructure investment over the next 10 years, when Southeast Asia will become the centre of growth. Due to its high reliability, high infrastructure speed and low electricity price, the AI demand of Asian power grid is much faster than that of the United States, so it is an ideal destination for the construction of global data centers. The big motorcycle wrote:
It only takes about 1-2 years to build a new data center in Asia-much faster than in the United States-which benefits grid operators and transformer / wire / grid equipment suppliers as power investment is expanding. Power grids in many Asian countries are also more reliable than those in the United States.
The price of electricity in Asia is about $60 per megawatt hour, which is competitive with the United States, and the price of clean electricity is much lower than in the United States. Due to the higher ambient temperature, the power intensity per megawatt in Asia is higher.
According to Morgan Stanley, data center capacity in the United States and Asia is expected to grow at a compound annual growth rate of 20% in both the United States and Asia from 2023 to 2027, and data center electricity demand in Asia is expected to triple by 2027.
Over the next three years, non-AI data centers will contribute more to electricity demand in Asia than in the United States. Even so, ultra-large companies in the United States are still the key to the expansion of data centers in Asia.
Southeast Asia-- the Center of AI Investment growth in Asia
Morgan Stanley expects Asia, including Japan, to account for more than 1/3 of global data center capacity by 2027, with potential investment of $100 billion this decade. Malaysia, Japan and Singapore are expected to be the main destinations for these investments, mainly for new data centres and general artificial intelligence infrastructure.
Data centers consume a lot of electricity. Morgan Stanley estimates that total data center capacity in Asia will triple to 60GW by 2030, which will boost electricity demand in all Asian markets by 2-4 times. Where:
Electricity demand growth in Malaysia is expected to double, Japan is reversing its decades-long decline, and electricity markets in Australia and Singapore are becoming more tight.
Southeast Asia is becoming the most attractive destination for data centres / AI infrastructure in Asia (lower electricity and land costs, as well as faster access to electricity), with an estimated $50 billion of investment over the next five years, according to Morgan Stanley.
It is expected that by 2027, Southeast Asia will become the world's second largest provider of non-US data centers after China.
Among them, Malaysia has received applications and investment plans for data center projects equivalent to 11GW power demand, which is equivalent to nearly all of Malaysia's current power demand 12GW. This means that demand from data centres will double Malaysia's electricity demand over the next three years.
AI narration in Japan is changing
Morgan Stanley believes that Japan has sufficient power supply capacity to meet the future demand growth of the data center and semiconductor industry.
According to the Interregional Coordination Organization of Japanese Transmission operators (OCCTO), new data centers and semiconductor factories will increase Japan's electricity demand by as much as 4.82 million kilowatts by 2030, which will end the decline in electricity demand in the past few years.
A large number of data centers are being built in Kansai Power supply area of Japan, and the new data center capacity of 3GW will directly benefit Kansai Electric Power. Japanese semiconductor equipment maker Disco and power electronics and grid transformer maker Fuji Motor will all benefit.
Overall, Morgan Stanley believes that in the data center supply chain, power grid operators, power generation companies, data center operators, power electronic equipment suppliers and so on will benefit from this wave of investment.
In addition, with the rapid increase in the installation of renewable energy in Asia and the decline in the cost of natural gas power generation, clean power growth will also become an important demand for data centers, creating opportunities for related equipment manufacturers.
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