Equinix, GIC form Japanese hyperscale data center joint venture

April 21, 2020
The more than $1.0 billion initial joint venture will begin with three xScale data centers, one in Osaka and two in Tokyo.

Equinix, Inc. (NASDAQ: EQIX) said it has signed a joint venture agreement with Singaporean sovereign wealth fund GIC to create a joint venture that will focus on the creation of hyperscale data centers in Japan. The more than $1.0 billion initial joint venture will begin with three xScale data centers, one in Osaka and two in Tokyo. The new joint venture complements a 2019 joint venture between the two parties that focuses on Europe (see "Equinix, GIC joint venture targets European xScale hyperscale data centers").

The new facilities will enable large-scale companies, including cloud service providers, to add core deployments to their existing access point footprints at Equinix. The additions will enable such customers to immediately span connectivity to 55 global metro markets and offer direct interconnection to their customers and strategic business partners, Equinix said. The three facilities will add approximately 138 MW of power capacity to the Osaka and Tokyo markets when fully built-out. Equinix currently operates 13 International Business Exchange (IBX) data centers in Japan and has more than 500 employees in the country.

The agreement, when fully consummated, will see GIC own 80% of the joint venture in exchange for the cash to fund the venture, to which Equinix will transfer its current Tokyo TY12 and Osaka OS2 development assets, along with development rights and the land for an additional data center in Tokyo. In addition to the 20% stake in the venture, Equinix said it will realize net cash proceeds of more than $100 million. The parties expect the joint venture agreement to close in the second half of 2020, pending regulatory approval and other closing conditions.

"Japan is a strategic country for regional hyperscale expansion, and the demand for data center capacity in the Tokyo and Osaka markets has outstripped supply,” commented Jabez Tan, head of research at Structure Research, via an Equinix press release. “Through this new joint venture, Equinix and GIC will be a top provider of new data center capacity for the world's largest hyperscale companies seeking to expand in these two strategic markets – leveraging Equinix for both their core workload and interconnection requirements. This expansion aims to accelerate the adoption of hybrid and multi-cloud architectures by companies throughout the region."

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.

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