Indonesia Faces Data Center Shortage as Demand Surges: Danantara

Indonesia Faces Data Center Shortage as Demand Surges: Danantara

Jakarta. Demand for data center capacity in Indonesia is surging, with customers facing waiting periods of six months to a year to secure the capacity they need, an executive at state investment agency Danantara Indonesia said Thursday.

Danantara Chief Technology Officer Sigit Puji Santosa said demand is so strong that newly built data center capacity could be absorbed by the market almost immediately.

“If we build 100 megawatts or 200 megawatts of capacity, it will be taken up immediately,” Sigit said in Jakarta.

He said Indonesia is experiencing a shortage of data center capacity as demand for digital infrastructure continues to grow rapidly.

“Demand for data centers is extraordinarily high, creating a shortage. Customers have to wait six months, or even up to a year,” he said.

Indonesia currently has around 45 large-scale data centers, but existing capacity has yet to keep pace with the country’s growing digital infrastructure needs, according to Sigit.

Danantara is prepared to participate in expanding the sector, including by supporting the technology and other components required by the data center industry, he said.

Beyond data centers, Danantara is also focusing on semiconductor development, particularly artificial intelligence chips, as demand for advanced computing hardware accelerates globally.

Danantara has established a partnership with UK-based semiconductor company Arm to develop chip designs, with several Indonesian state-owned enterprises also involved in the initiative.

Sigit said global demand for AI chips is rising sharply, creating opportunities for Indonesia to develop a broader digital technology ecosystem.

Danantara plans to support the development of digital infrastructure across systems, subsystems, and components to capture opportunities arising from the industry’s growth, he said.

However, Indonesia still faces significant obstacles to expanding its digital infrastructure, including constraints on electricity supply as well as complex processes and regulations.

“The challenges are considerable, but so are the opportunities,” Sigit said.

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