With the recent explosive development of artificial intelligence (AI) technology, the global data center market is growing rapidly. But what about our country? Unfortunately, Korea is lagging behind in this important trend. Let's take a look at why this is happening and what the problem is. Personally, I think this issue is very important.
Did you know that global big tech companies such as Google, AWS, Microsoft, and Apple are racing to build large-scale data centers in Asia? In particular, Malaysia and Taiwan stand out in this competition. Apple announced that it would build a data center worth 4.3 trillion won in northern Taiwan, and Google has already invested 1.7 trillion won. AWS is also said to be investing billions of dollars over the next 15 years.
But why did these companies choose Taiwan rather than Korea? The reason is simple. This is because Taiwan is responsible for a significant portion of the world's semiconductor production and occupies a key position in the global semiconductor supply chain. In addition, the Taiwanese government is attracting these companies through active policies such as the 'Asia Silicon Valley Development Plan'.
So why is our country falling behind in this competition? The problem is multiple.
First, there is a power supply problem . Although Korea's power infrastructure is said to be well-equipped, it is actually insufficient to handle the rapidly increasing power demand from data centers. It is said that data center power consumption will more than double by 2026[5], but there are limits to current power supply capabilities. In particular, in metropolitan areas such as Seoul and Gyeonggi-do, electricity demand is already saturated, making it difficult to build additional large-scale power consumption facilities.
Second, there is the issue of securing land . In Korea, the land area is small and the population density is high, so it is not easy to find land to build a large-scale data center. As everything is concentrated in the metropolitan area, it has become more difficult to build a data center in an appropriate location.
Third, there is a regulatory environment issue . Our country's data management and personal information protection regulations are more stringent than other countries. This is what is holding global companies back.
Lastly, the biggest problem is the ‘network fee’ system.Network usage fees in our country are ridiculously high compared to other countries. This is clearly demonstrated by the fact that Twitch revealed that network fees in Korea are 10 times higher than in other countries. Twitch eventually withdrew from the Korean market because of this.
If this situation continues, our country will have no choice but to continue to lag behind in the competition for core infrastructure in the AI era. Then what should I do?
First of all, the government must urgently pursue power infrastructure expansion and regional distribution policies. In addition, we must establish active support policies to attract data centers and improve the regulatory environment to meet global standards. In particular, the network usage fee issue must be resolved immediately. We need to create a reasonable network usage fee system that meets international standards and establish a balanced cooperative relationship between global companies and domestic telecommunications companies.
Data centers in the AI era are not just corporate assets. It is an important infrastructure that is directly related to national competitiveness. In order for our country to become an AI powerhouse, the government, businesses, and academia must join forces to develop and implement a comprehensive strategy. Otherwise, we will have no choice but to fall into a peripheral country in the AI era.
To blame labor costs, there is nothing to say about data centers being built in Taiwan and Japan, and to talk about land prices or infrastructure, there is nothing more to say about them being built in countries such as Malaysia and Thailand, which have relatively weaker infrastructure than Korea. If geopolitical reasons are the problem, there are actually Taiwan, which is under threat from China, and Malaysia and Vietnam, which are friendly with China and Russia.
But wait a minute: is attracting a data center always a good thing? Looking at Singapore's case, I have doubts. Although Singapore has over 70 data centers, it is restricting new data center permits. Why is that so? Data centers use enormous amounts of electricity and water.
Reporter Lee Bong-ryeol's special article shows that in Singapore, data centers consume 7% of total electricity consumption. In addition, although data centers occupy a large area of land, they do not require many people to operate, so the employment effect is not significant.
Because of these problems, Ireland, the US state of Virginia, and the European Union are also strengthening regulations on data centers. Korea Electric Power Corporation is also preventing new data centers from being built in the metropolitan area starting this year.
What choice should we make in this situation? Rather than unconditionally attracting data centers, a cautious approach seems necessary. The government must step in and set regulations related to data centers and distinguish between what is essential for domestic information security and what is unnecessary. In addition, measures must be taken to ensure that the energy used to operate data centers is renewable energy rather than fossil fuels.
Personally, I still think that it is necessary to attract data centers domestically. Even if it is not necessarily an attraction, I think that at least a domestic company or a national level can at least benefit from this competition if it is made to meet global standards. There are various reasons, such as environmental reasons and institutional reasons, but what can we do? You should think about it once.
(Of course, there are small regions in Korea such as Amazon/Google/Meta. However, they are very small in scale and most of them ‘exist’ due to personal information protection laws, etc.)
