Vietnam tech group CMC to build hyperscale data center

Hanoi-headquartered CMC Corporation, among the leading tech companies in Vietnam, has established a subsidiary in a bid to build a hyperscale data center amid strong demand in the country.

The new subsidiary, CMC AI Digital Infrastructure Limited Company, or CMC ADI Co., Ltd., will have initial charter capital of VND300 billion ($11.8 million) and be based in District 7, Ho Chi Minh City.

Its capital base will be incremented as per the scale and financial plans of the project, CMC said in a filing to the State Securities Commission and Ho Chi Minh Stock Exchange.

Nguyen Trung Chinh, chairman of CMC Corporation, will hold the positions of chairman, director, and legal representative of CMC ADI.

The corporation will submit the project for approval at its upcoming AGM, slated for July 25.

Vietnam is home to 33 data centers, with four domestic players – VNPT, FPT Telecom, CMC Telecom, and Viettel IDC – commanding 97% of the market, according to property service firm Savills Vietnam.

The data center market in Vietnam is forecast to reach $1.04 billion by 2028, up from $561 million in 2022, representing a CAGR of 10.7%.

Besides modest participation of foreign players such as GDS, Telehouse, and NTT, other foreign companies are exploring locations to build data centers in the Southeast Asian country.

Amazon Web Services announced the launch of frontier data centers in Hanoi and HCMC in August 2022. China’s Alibaba also plans to invest $1 billion in a data center project in Vietnam, Savills Vietnam said in a report last month.

Hyosung, the third largest South Korean investor in Vietnam after Samsung and LG, plans to build a large data center in HCMC, Hyosung’s vice chairman and chief operations officer, told Deputy Prime Minister Le Minh Khai in Hanoi in May.

The Ministry of Information and Communications has proposed a draft decree guiding the implementation of the 2023 Telecommunications Law, effective from July 1, 2024. Under the proposed decree, foreign companies will be allowed to invest and wholly own companies that provide data center, Over the Top (OTT), and computing cloud services.