With the data center industry evolving at a rapid pace, it’s no surprise that current location trends for new data center construction are different than last year. Key states like Virginia and Texas continue to experience strong activity, however, the industry is also seeing an expansion of emerging markets outside of the established data center hubs.
Key Regions for Data Center Construction in the U.S.
- Virginia
- Texas
- Midwest
- Arizona
- Louisiana
- North Dakota
What’s Driving Regional Trends?
It’s important to note that site selection still heavily depends on the following criteria:
- Power Supply and Grid Capacity
- Land Availability and Cost
- Network Connectivity
- Cooling and Climate
- Regulatory Environment
- Proximity to Demand
Primary markets for data center construction (i.e. Silicon Valley, Hillsboro), are becoming saturated and hyperscalers are increasingly looking to secondary markets that balance all these factors.
Midwest on the Map
One of the fastest-growing hotspots of data center construction is the Midwest. The city of Columbus, Ohio, and Chicago remain the region’s primary data center markets, however major data center development is occurring from Kansas to Michigan and to other Great Lakes states as well.
The Midwest is an attractive area for data center developers as it offers relatively low land cost, access to multiple power grids, and redundancy across regions. The cooler temperatures also reduce the need for energy-intensive cooling.
Looking to Louisiana
One of the major hyperscalers in the U.S. has officially broken ground on what will be the largest data center in the Western Hemisphere, and this is happening in Richland Parish, Louisiana.
While this build may be the region’s first data center, it probably won’t be the last as companies are increasingly eyeing Louisiana for data center projects. Developers require large, continuous plots of land and access to natural gas and transmission lines, making the Pelican State a prime location for future construction.
Relay to coastal data routes, relatively lower land costs, and strategic location for serving both U.S. and Gulf-coast network path, also make it a very attractive region for further development.
Challenges in Data Center Construction Remain
The industry continues to face many challenges to keep up with demand. Power availability is the most critical issue, as grid capacity and upgrade timelines often lag behind development needs.
On top of this, escalating construction costs, supply chain bottlenecks, and skilled labor shortages further complicate timelines and budgets while developers try to maintain speed to market in an intensely competitive landscape.
Hyperscalers and developers are establishing solutions to mitigate constraints, where possible. For example, in response to the skilled labor shortage, builders are using technology like the Cumulus Quality Execution platform to upskill and guide workers step-by-step through operating procedures to guarantee quality in and eliminate rework.
Data center construction faces complex challenges, but the industry is notorious for problem-solving and will continue to do so by adopting smarter planning, technology, and collaboration strategies.
