Sufficient, reliable power supply key for FDI inflow into Vietnam data centers
Sufficient and reliable power supply will be a crucial factor in attracting foreign direct investment (FDI) for developing data centers as Vietnam looks to tap the growing global demand for such facilities, experts say.
These days, the Saigon High-Tech Park (SHTP) in Ho Chi Minh City has caught the eye of many tech players looking to develop data centers.
For instance, in May-June 2024, South Korea’s Hyosung Group informed the HCMC People’s Committee that it was interested in investing in a three-hectare data center of tier-3 standards with a capacity of 1,500-4,000 racks.

Inside a data center in Ho Chi Minh City, southern Vietnam. Photo courtesy of Saigon Times.
Several other data center projects have already got the green light from Vietnam, including Hong Kong-headquartered Gaw Capital’s 20MW facility at SHTP, Singapore-based Worldwide DC Solution’s 30MW data center in Thu Duc city, and a project jointly developed by Japanese telecom giant NTT and South Korea’s DQ Tek.
China’s Alibaba has also announced a plan to build a data center in Vietnam. Hathor DC Vietnam Holdings Pte. Ltd – a subsidiary of Singapore’s SEvolution Data Centers Group, has asked for approval from the HCMC government to become a strategic investor in the SHTP Data Center project.
Alongside the race for data center development, an equally compelling competition is unfolding in the semiconductor industry.
In early July, a business mission from U.S. chip giant Nvidia visited HCMC to explore investment opportunities. Nvidia officials said they aimed to establish a research, development and training center focused on artificial intelligence; install a supercomputer system; and move some of its GPU production for supercomputers to Vietnam.
Another U.S. tech giant, Marvell Group, is also accelerating the expansion of its chip design centers in Vietnam. In mid-May 2024, Marvell launched a new chip design center in the central city of Danang, complementing two existing centers in HCMC.
Other key factors
On November 24, 2023, the National Assembly, Vietnam’s parliament, passed the Law on Telecommunications. Effective July 1, 2024, the new law is considered another key factor in attracting foreign investment for developing and operating data centers in Vietnam.
David Jackson, CEO of Avison Young Vietnam, told The Investor that besides the Telecommunications Law, there was a growing effort to spare industrial land for high-tech industries.
With an increasingly open and competitive market, Vietnam was poised to attract more investors into the high-tech sector, he added.
Cleared land (with all site clearance formalities completed) and reliable energy infrastructure were crucial factors for attracting foreign investment, Jackson said, noting that data centers required large and stable power supply.
He recommended that Vietnam in general and HCMC in particular continue to refine legal policies to guide the data center market towards sustainable and green development.
Celina Chua, director of Data Center Client Solutions (APAC) at JLL, a Singapore-based real estate investment advisory firm, remarked that Vietnam’s Telecommunications Law permits 100% foreign investment in data center services. However, market access restrictions will apply if the data center service provider also offers network connectivity services, she said.
Chua also said that Vietnam ranked high among countries that investors and operators were planning market entry strategies for. The country was becoming a key destination in the Asian data center market thanks to its strategic geographical location, dynamic economic policies, tech-savvy young population, and increasing demand for data localization, she added.
She also said that construction and operational costs gave Vietnam a relative advantage, with building data centers in the country costing $6 million to $13 million per megawatt.
Furthermore, under its latest Power Development Plan (PDP VIII), Vietnam aims to raise total power generation capacity from around 80 GW to 155 GW by diversifying the energy structure, reducing dependence on coal power and shifting to more sustainable energy sources.
Chua said that this transition will be crucial for ensuring stable and reliable energy supply to meet increasing demands of the rapidly expanding, energy-intensive data center sector in Vietnam.
Vietnam now has 33 data centers, mostly in Hanoi and HCMC, far below mature markets like mainland China, Hong Kong, and Singapore.
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