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Market Overview

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The Latin America data center power market exhibited a valuation of USD 389.9 million in 2021, and it is projected to reach USD 586.3 million by 2027, displaying a compounded annual growth rate (CAGR) of 7.03%. This region experienced considerable investments in data centers from telecommunication service providers and both regional and global colocation operators. Furthermore, prominent cloud service providers such as Google, Amazon Web Services, Microsoft, Oracle, IBM, and Tencent have also invested in this market. These cloud service providers are expanding their presence in the region throughout the forecast period. Additionally, several countries including Chile, Uruguay, Brazil, Colombia, Argentina, Mexico, and Peru have deployed 5G networks on both commercial and trial bases. The adoption of cloud services, the Internet of Things (IoT), the deployment of 5G networks, and the increasing utilization of data are among the primary drivers for the data center industry’s growth in Latin America.

The market is experiencing substantial growth in the adoption of lithium-ion UPS systems, as well as emerging interest in battery technologies such as Nickel-zinc and Prussian sodium among service providers for data centers.

The COVID-19 pandemic has had a positive impact on the industry, as it has accelerated digital transformation initiatives across Latin America. This, in turn, has led to increased demand for data center services and higher utilization of data center capacity within colocation facilities.

Data centers are now investing more in power infrastructure with a minimum of N+1 redundancy. For power infrastructure, most data centers are equipped with N+N or 2N redundancy, with greater redundancy for UPS and generator systems.

Moreover, the market is expected to receive a significant boost in growth due to the emergence of edge facilities. These facilities will typically include single-phase lithium-ion UPS systems and monitored and switched PDUs.

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Market Segmentation

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The market is segmented based on various factors, including power infrastructure, ups systems, generator systems, tier standards, and geography.

Segmentation by Power Infrastructure
UPS Systems
Generators
PDUs
Transfer Switches & Switchgears
Other Electrical Infrastructure

Segmentation by UPS Systems
Less than or equal to 500kVA
500-1,000kVA
Greater than 1,000 kVA

Segmentation by Generator Systems
0- less than 1.5 MW
1.5-3 MW
Greater than or equal to 3 MW

Segmentation by Tier Standards
Tier I & II
Tier III
Tier IV

Segmentation by Geography
Brazil
Mexico
Colombia
Chile
Rest of Latin America

Among the power infrastructure segment, UPS systems contribute the most to incremental growth, accounting for USD 77 million, followed by transfer switches and switchgear, as well as PDUs, which together exhibit an absolute growth of 50.36%. UPS systems also hold the largest share of USD 180 million during the forecast period.

In modular data center deployments, generators with a power capacity of 0-1.5 MW are predominantly adopted. These generators are also being used by small data centers with a total power capacity of 2 MW in Tier II/III markets, as they offer cost-effective solutions on an on-demand basis. The market is also witnessing growth in the use of portable generators, contributing to the overall revenue of the generator segment throughout the forecast period.

The Latin American region has seen more investments in data center power systems with a capacity of less than 10 MW. Additionally, there are over five data center facilities with a capacity exceeding 10 MW, further driving the market.

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Competitive Landscape

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The presence of vendors in Latin American countries is increasing, which is expected to contribute to revenue growth. This is primarily driven by the construction of large data centers in countries such as Brazil, Chile, Colombia, and Mexico.

Leading market players in UPS and rack PDU infrastructure include ABB, Eaton, Legrand, Schneider Electric, and Vertiv. Cummins and Caterpillar have a strong market presence in terms of generators. Huawei Technologies is also a significant player in the market.

In March 2021, Microsoft announced the introduction of new availability zones in São Paulo as part of its More Brazil plan. Furthermore, the company has plans to expand its zone coverage by the end of 2021.

Major cloud service providers in Latin America include Oracle, Microsoft, Amazon Web Services, Google, IBM, and Tencent. These providers will collocate their workloads with existing colocation operators and collaborate with new entrants in the market to offer cloud-based services.

Key companies profiled in this report include ABB, Caterpillar, Cummins, Eaton, Legrand, Mitsubishi Electric, Rolls-Royce, Schneider Electric, Vertiv, AEG Power Solutions, Aggreko, AMETEK Powervar, Artesyn Embedded Power (Advanced Energy), Aten, Black Box Network Services (AGC Networks), Bloom Energy, Canovate, Chatsworth Products, Cisco Systems, Cyber Power Systems, Delta Electronics, EAE Elektrik, Fuji Electric, Generac Power Systems, General Electric, Hewlett Packard Enterprise (HPE), Hitachi Hi-Rel Power Electronics, HITEC Power Protection, Huawei Technologies, KEHUA Data (KEHUA Tech), KOHLER, Marathon Power, Panduit, Piller Power Systems, PRAMAC, Rittal, Saft, Siemens, SolarEdge Technologies, Tripp Lite (Eaton), Toshiba, Virtual Power Systems, Yanmar (HIMOINSA).

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Recent Industry Developments

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In October 2019, Amazon Web Services (AWS) purchased 140 hectares of land in Argentina with plans to develop three data centers. The investment for this project is estimated to be around USD 800 million over a ten-year period.

In December 2021, Scala Data Centers announced its intention to construct two hyperscale data center facilities in Brazil, namely SP4 and SP5. These facilities will have power capacities of 18 MW and 9 MW respectively, and are expected to be operational by April 2022 and September 2022.

In November 2021, HostDime acquired a three-acre land in Guadalajara, Mexico, with plans to build a 70,000 square feet data center boasting a power capacity of 6 MW. This facility is expected to be online by the fourth quarter of 2023, facilitating the company’s growth.

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Key Questions Answered

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What is the market size of the data center power market in Latin America?

The Latin America data center power market was valued at USD 389.9 million in 2021 and is projected to reach USD 586.3 million by 2027, with a compound annual growth rate (CAGR) of 7.03%.

What are the factors driving the growth of the data center power market in Latin America?

The growth of the data center power market in Latin America is driven by several factors, including the adoption of cloud computing, the Internet of Things (IoT), and big data. Additionally, there is continued investment in data centers, supported by the thriving digital economy in the region, government initiatives that enhance data center investments, the impact of the COVID-19 pandemic driving demand for data centers, and an increase in power outages, which highlights the need for reliable power solutions.

What are some of the latest trends that will shape the future of the data center power market in Latin America?

Several trends will shape the future of the data center power market in Latin America. These include the deployment of 5G networks, which will drive the demand for edge data centers. There is also a growing rack power density, necessitating advanced power solutions. Sustainability initiatives by data center operators, including the implementation of renewable energy sources, are becoming more prevalent. The adoption of automation and artificial intelligence (AI) technologies in data centers is also on the rise. Furthermore, sustainable innovations in data center power technology are emerging as a significant trend in the industry.

Who are the prominent vendors in the data center power industry in Latin America?

Prominent vendors in the Latin America data center power industry include ABB, Caterpillar, and Cummins.

Which country has the largest market share in the data center power market in Latin America?

Brazil holds the largest market share in the data center power market in Latin America, accounting for USD 263.7 million during the forecast period.