Shorter project timelines and multibillion-dollar orders draw firms beyond housing
Korean builders are racing into data centers, chasing multibillion-dollar opportunities as the generative AI boom fuels a global surge in demand for computing infrastructure.
Global real estate consultancy JLL estimates that the data center market will grow at an annual average rate of 14 percent through 2030, while global data center power consumption is expected to nearly double from around 103 gigawatts in 2025 to 200 GW by 2030, led by an infrastructure super-cycle requiring up to $3 trillion in total spending.
According to JLL, the average construction cost of data centers rose 38 percent over five years, from $7.7 million per megawatt in 2020 to $10.7 million in 2025. The figure is expected to climb further to $11.3 million per MW this year, underscoring the rising value of data center construction projects.
Hyundai E&C has the largest data center construction track record among Korean builders, having completed four data center projects in the country. The company is participating in an AI data center project in Saemangeum, North Jeolla Province, and began construction on the 40-MW Ansan Sihwa AI Data Center in June.
Daewoo Engineering & Construction is emerging as a major contender, establishing a dedicated data center-dedicated task force in April to strengthen its design, technology and construction capabilities and develop new projects. The builder also signed a partnership with data center operator KINX in July to connect development, construction, and operations as part of its longer-term strategy to expand from construction into land acquisition, development, operations and eventual asset sales.
Daewoo E&C completed the 40-MW Empyrion Digital AI Campus in Gangnam last year and is participating as both an investor and constructor in the up-to-60-MW Pine Data Center in Jangseong, South Jeolla Province. The builder is also pursuing projects with capacities of 200-300 MW in the Jangseong and Gangjin areas of South Jeolla Province.
Samsung C&T is pursuing orders from global technology giants while looking beyond Southeast Asia to the Middle East and Australia. It won a 40-MW Ansan Global Cloud Center project worth 400 billion won ($283 million) in November 2024 and has also participated in data center projects ordered by Samsung affiliates. For a 2.4-MW data center project in Chuncheon, Gangwon Province, Samsung C&T said it would use modular construction methods designed to shorten construction time and facilitate future expansion.
GS E&C is taking on one of the largest projects in the domestic pipeline, working with the local governments of Gangwon Province and Donghae to develop an AI data center campus with a total planned capacity of 2.4 GW. The first 1.2-GW phase is estimated to require around 10 trillion won, with the groundbreaking targeted for early October.
Having constructed a 20-MW AI data center in Seoul, DL E&C is developing an 80-MW data center project in Gimpo, and DL Construction won a 126.8-billion-won contract for a 9.8-MW AI computing-focused facility in Bucheon in May. SK Ecoplant, which is participating in the construction of the 103-MW SK-Amazon Web Services data center in Ulsan, recently set up an AI data center-dedicated team to better handle the rising demand for AI infrastructure.
The economics of the business offer a lucrative source of revenue for builders. Compared with housing developments, data centers typically have shorter construction periods while offering project values ranging from hundreds of billions of won to several trillion won.
"Construction firms are paying close attention to data centers because they can generate sizable orders within a relatively short construction period," a construction industry official said.
"Once builders expand into land development, equity investment and operations, they can continue generating rental and operating income long after construction is completed."
Policy is adding another layer of momentum as the Korean government laid out plans to support the construction of 8.4 GW of AI data centers by investing 550 trillion won through 2029 in cooperation with the private sector.
According to a recent report by the Korea Research Institute for Construction Policy, AI data centers are increasingly being treated as strategic infrastructure assets rather than simple buildings. Developers are seeking contractors capable of coordinating the entire project lifecycle from grid connections, substations and backup power systems to cooling infrastructure, telecommunications networks and regulatory approvals.
"The capabilities of builders in the future data center market will depend on how effectively they can integrate shorter power procurement lead times, modular prefabrication, parallel construction processes and early commissioning," said Lee Gyu-eun, an associate research fellow at the Korea Research Institute for Construction Policy.
“In the near term, construction companies are likely to focus on strengthening their position in the terrestrial AI data center market. Over the longer term, however, accumulating expertise in modular construction, robotics, remote operations and thermal management could lay the groundwork for entering the emerging space infrastructure market.”
hwkan@heraldcorp.com