A modular data center that has shortened the construction period for data centers from more than two years to six months is emerging as a new alternative in the artificial intelligence (AI) infrastructure market. As AI demand surges, a method that assembles factory‑prebuilt small data center modules like Lego blocks to build quickly—rather than spending years constructing an entire data center from scratch—has begun to draw attention. As modular data centers gain traction, more corporations are entering related businesses.
On the 3rd, according to market research firm Fortune Business Insights, the global modular data center market is expected to grow at an average annual rate of 18.6%, from about $42.2 billion (about 63 trillion won) this year to $167.6 billion (about 253 trillion won) in 2034. The greatest strength of modular data centers is that they dramatically reduce the time needed to build data centers.
In the AI market, where the speed of building infrastructure is a key factor that determines competitiveness, delays in securing data centers can hurt a corporation's profitability and market position. Traditional data centers take an average of two to three years from building permits to construction, prompting criticism that there are limits to meeting surging AI demand.
A modular data center assembles container‑type small data center modules prebuilt at factories on site. Each module is a standardized product equipped with core facilities such as power, cooling, and IT equipment, and because it is compact, it can be loaded onto trucks and quickly transported to data center sites. Because there is no need to erect buildings on the site, it is possible to cut the data center build time to three to six months. After installing a concrete pad (floor) on site, the truck‑delivered modules are placed where desired and connected by network.
Because modular data centers are classified as equipment rather than buildings, they are relatively free from regulations such as building permits. They can also respond more flexibly to securing power, which is cited as the biggest obstacle to data center construction.
In Korea, LG CNS has entered the modular data center business. LG CNS plans to build this year at the Busan Global Cloud Data Center site a small AI data center, the "AI Box," that concentrates the core infrastructure needed to run data centers into containers. A single container can accommodate 1.2 megawatts (MW) of server power (IT load) and 576 graphics processing units (GPUs). An LG CNS official said, "It can be operated on a single‑container basis, and by incrementally combining dozens of containers, it can also scale to a hyperscale AI data center."
LG CNS plans to build a large‑scale campus that integrates about 50 AI Boxes on a large site to meet domestic AI infrastructure demand, and then expand the business to global markets such as Southeast Asia and North America.
Homegrown AI corporation Ellice Group is also developing and selling its own "portable modular data center (PMDC)," which integrates servers, power, and cooling devices inside a container. "Ellice Cloud," a cloud service provided based on PMDC, currently accounts for about 40% of the company's revenue.
In addition, global corporations such as Schneider Electric SE, Huawei, and Vertiv are also developing modular data center businesses. Schneider Electric SE of Germany, a leading corporation, produces small data center modules at modular data center production hubs in France, India, and the United States that are equipped with more than 90% of the core facilities needed to operate data centers and also provides related integrated solutions.
SK Telecom recently joined hands with Schneider to jointly develop an integrated solution using a "prefab modular" method that reduces AI data center construction time and expense. An SK Telecom official said, "Based on this, we will proactively respond to global big tech customers' demand for building AI data centers."