South & Central America Data Center Equipment Market Size and Forecast (2021-2031), Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Equipment Type [Servers, Storage Devices, Cooling Equipment, Power Distribution Units (PDUs), Ra

The South & Central America (SAM) data center equipment market is poised for significant growth, with projections indicating that it will reach approximately US$ 20,294.38 million by 2031, up from US$ 9,175.78 million in 2024. This growth trajectory reflects a compound annual growth rate (CAGR) of 12.1% from 2025 to 2031, driven by increasing demand for digital infrastructure and advancements in technology.

Executive Summary and Market Analysis

The SAM data center equipment market is primarily segmented into Brazil, Argentina, and the Rest of South & Central America. The surge in artificial intelligence (AI) applications has prompted both governmental and private sector investments in digital infrastructure, positioning the region to capitalize on the ongoing Fourth Industrial Revolution. Data centers have emerged as one of the fastest-growing asset classes in commercial real estate, particularly in emerging markets like those in SAM.

A notable example of this trend is the recent collaboration between the government of Rio Grande do Sul in Brazil and Scala Data Centers, which aims to establish Scala AI City, a groundbreaking digital infrastructure project. This initiative underscores the increasing importance of data centers in supporting cloud computing, data localization regulations, and the trend of nearshoring —the practice of relocating business operations closer to the target market.

Strategic Insights

Market Segmentation

The South & Central America data center equipment market can be analyzed through two key segments: equipment type and tier type.

1. Equipment Type: The market is divided into several categories, including servers, storage devices, cooling equipment, power distribution units (PDUs), racks, enclosures, and others. In 2024, the servers segment dominated the market, reflecting the critical role of servers in data center operations.
2. Tier Type: The market is also segmented by tier classification, which includes tier 1, tier 2, tier 3, and tier 4 data centers. The tier 3 segment held the largest market share in 2024, indicating a preference for more robust and reliable data center infrastructures.

Market Outlook

The data center industry is facing a growing challenge regarding electronic waste (e-waste), which has reached alarming levels. According to the Global E-waste Monitor, 61.9 million metric tons of e-waste were generated in 2022, with an annual increase of 2.6 million tons. Furthermore, data centers are responsible for approximately 2% of global greenhouse gas emissions. The International Energy Agency (IEA) reported that data centers consumed nearly 460 terawatt hours (TWh) of electricity in 2022, with projections suggesting this could rise to 1000 TWh by 2026.

To mitigate these environmental impacts, businesses and governments are intensifying efforts to combat climate change and reduce carbon footprints. Data center operators are increasingly adopting sustainable and energy-efficient technologies to comply with regulatory requirements and meet environmental goals. For instance, Microsoft introduced a new data center design in December 2024 that optimizes AI workloads while consuming zero water for cooling, thereby avoiding the need for over 125 million liters of water annually per data center. Similarly, Amazon Web Services (AWS) announced new components designed to enhance energy efficiency and support the next generation of AI innovations.

Country Insights

The SAM data center equipment market is significantly influenced by the geographic and economic landscape of its countries. Brazil, in particular, holds the largest market share as of 2024. The country's strategic location provides advantages for data center operations, especially for AI applications that require low latency and high reliability, thanks to its access to major submarine cable systems connecting the Americas, Europe, and Africa.

The Brazilian government has also implemented initiatives to bolster AI investments, such as the Informatics Law, which offers tax incentives for research and development in information and communication technology (ICT), and the National Internet of Things Plan aimed at fostering IoT and AI development. These initiatives are driving demand for advanced data center infrastructure, including high-performance servers and AI-compatible equipment, as industries increasingly adopt AI technologies.

Company Profiles

Key players in the South & Central America data center equipment market include ABB Ltd, Legrand SA, Schneider Electric SE, Rittal GmbH and Co KG, Eaton Corp Plc, Dell Technologies Inc, Honeywell International Inc, Vertiv Group Corp., Delta Electronics Inc, and Cisco Systems Inc. These companies are actively pursuing strategies such as expansion, product innovation, and mergers and acquisitions to enhance their market presence and deliver innovative solutions to their customers.

In conclusion, the South & Central America data center equipment market is on a robust growth path, driven by technological advancements, increasing demand for digital infrastructure, and a strong focus on sustainability. As the region continues to invest in its digital future, the opportunities for growth in this sector are substantial. Show more