The Data Center Industry will keep growing in Chile to turn the country into the Digital Hub of the Southern Cone
Chile has positioned itself as one of the most attractive geographies in Latin America for Data Center deployment. In fact, the country is the main candidate to become the Digital Hub for the Southern Cone, putting itself as a top player in the region, beside economies like Brazil or Mexico.
Chile’s growth in the data centre industry and forecasts
In the last years, Chile has caught the attention of the main Cloud Service Providers worldwide, announcing consistent investments which have multiplied lately. These announcements have been a strong impulse for the Data Center industry in the country.
As InvestChile informed recently, new Data Center deployments in Chile mean almost a 3,000 million USD investment nationally. This comes hand in hand with an increase in cloud service investment, which has been growing in double-digit figures in the last years.
Forecasts until 2023 keep this tendency stable, so we will be able to see a considerable growth in investments in Chile and Latin America as a whole, as hyperscalers keep deploying new cloud nodes.
Source: InvestChile – Chile: Hub for Data Centers in South America.
The favorable situation that Chile has is no mere coincidence. The country gathers the necessary conditions to be attractive for new investments. Amongst them, we can highlight a strong Telecommunications sector (because of which, Chile will be the first Latin American country to develop a 5G network), and a solid Data Center infrastructure ecosystem with a huge expansion capability.
Another relevant factor is Power availability to deliver new developments rapidly. We must highlight the great proportion in the generation of renewable energy in Chile, having over 1,800 GW of solar energy installed, which helps to develop a more efficient Data Center ecosystem.
Chile’s comparative advantages in the market
In the past years, Chile has consolidated its comparative advantages and fostered a series of measures to increase its attractiveness for investors, highlighting the following:
- The World Bank ranked the country first worlwide in the Doing Business Index, while the Institute for Management Development (IMD) ranks Chile first in Latin America in its Competitivity (38th worldwide) ranking, highlighting the country’s economy as the best to do business in LatAm.
- Chilean economy is considered one of the most opened and connected worldwide, having 30 international accords with 65 economies, which represent 87% of the world’s GDP and 63% of population.
- Chile ranks first in LatAm in Huawei’s Global Connectivity Index, and 30th Projects of Optical Fiber between 2019-2021 include 450 million USD investments to increase the network from 18,000 to 36,000 kilometers.
- The country’s location in the Southern Cone is considered strategic, skirting the shores of the Pacific Ocean, and allowing Chile to be the only Latin American country to extend its connections to three continents: America, Oceania, and Antarctica.
- According to IDC predictions, Latin American IT sector will grow 7,7% in 2021, and it is estimated that 40% of the regions economy will be digitalized by 2022, generating 460 billion USD in IT expenditure between 2020-2023. More than a third part of this investment will be focused on cloud solutions, which means a great opportunity for a leading country in connectivity, like Chile.
Consequently, this general outlook has allowed Chile to be one of the biggest receptors of Colocation demand by hyperscalers. In our experience, Nabiax has executed growth projects which have doubled our capacity in Paine Data Center. In 2022, we will implement new investment projects, with the goal of multiplying our capacity by three, which will be focused on answering to this increasing demand.
Gonzalo Atán, Country Manager Chile