South Korea – Telecom Giants Ramp Up Data Center Expansion Amid AI Demand Surge
In the rapidly evolving landscape of digital transformation, South Korea’s major telecom companies are intensifying their efforts to expand data center infrastructure, driven by the burgeoning demand for AI technology. As of April this year, KT, LG Uplus, and SK Telecom collectively operate 35 data centers across the nation, with KT leading the pack with 14 centers, followed by LG Uplus with 13, and SK Telecom with 8.
The push for expansion is largely fueled by the increasing need for cloud services, as businesses and public institutions accelerate their digital transformation efforts. This trend is prompting telecom companies to secure the latest GPUs and enhance their data processing capabilities. SK Telecom CEO Yoo Young-sang mentioned at last month’s regular shareholders’ meeting that they would adopt Blackwell for data center GPUs to strengthen data center infrastructure.
KT is particularly aggressive in its expansion plans through its subsidiary kt cloud, with new data centers slated to open in Seoul Gasan and Gyeongbuk Yecheon within the year, and another in Bucheon by 2026. The company plans to launch subscription-based GPU services (GPUaaS: GPU as a Service) to solidify its position in the domestic AI infrastructure market. The securities industry projects that kt cloud will achieve mid-800 billion won in annual data center revenue, including existing data centers, following the opening of the new centers.
LG Uplus, on the other hand, is focusing on hyperscale facilities, having completed the Pyeongchon 2 Center in 2023 and planning the Paju IDC for completion in 2027. The company is anticipated to secure GPUs through its collaboration with AWS, aiming to create a robust AI cloud ecosystem.
SK Telecom’s subsidiary SK Broadband has been active in the data center sector, launching GPU services at the Gasan Data Center in July 2021 and completing the Yangju Data Center in February this year. The company’s strategic focus on data center infrastructure is part of a broader effort to diversify beyond traditional telecommunications services.
The competitive landscape in South Korea’s telecommunications industry is marked by these strategic expansions, as companies seek to leverage their existing infrastructure and expertise in network management to tap into new revenue streams. As the telecom giants continue to expand their data center capabilities, the industry is poised for further advancements in AI technology, driven by the integration of cutting-edge GPUs and strategic partnerships. The ongoing developments underscore the critical role of data centers in supporting the digital transformation and AI-driven future of South Korea’s telecommunications sector.
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