Key Facts
The repurposing of unused industrial sites, such as factories and steel mills, into data centers is gaining momentum in Japan. This trend is driven by the growing demand for data processing capabilities fueled by the widespread adoption of artificial intelligence (AI). These sites often have existing high-voltage power infrastructure, making redevelopment more feasible and cost-effective.
Major Projects Underway
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Mitsubishi Corporation and JFE Holdings: The companies are planning to transform the site of the former blast furnace at JFE’s East Japan Works Keihin District in Kawasaki City, which ceased operations in 2023. The project, estimated to cost between ¥120 billion and ¥180 billion, aims to begin construction of a data center by 2026. Mitsubishi Corporation, already operating eight data centers through its subsidiary, is poised to create one of Japan’s largest data centers if the plan materializes.
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SoftBank and KDDI: Both companies are repurposing the former Sharp LCD panel factory in Sakai City, which halted production last summer. SoftBank has acquired approximately 60% of the site for ¥100 billion and plans to launch operations by 2026. KDDI has purchased a smaller portion for ¥10 billion, targeting a 2025 operational start.
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Mitsui Fudosan: The company has acquired part of the land adjacent to Hino Motors’ headquarters in Hino City, Tokyo. The underutilized site will be converted into a data center, aligning with Hino Motors’ strategy to optimize its resources.
Market Growth and Future Prospects
The demand for data centers is surging due to the rapid development of generative AI technologies, which require high-performance servers for processing. According to Fuji Chimera Research Institute, Japan’s data center service market is projected to grow by 34% from 2024 levels, reaching ¥5.4 trillion by 2029. The peak of new data center construction is expected in 2026.
Broader Applications
Unused industrial land is also being considered for other purposes, such as automated cold storage facilities to meet the rising demand for ready-to-eat meals and semiconductor manufacturing to strengthen domestic supply chains. The Ministry of Economy, Trade, and Industry supports these initiatives, citing the practicality of repurposing sites with existing infrastructure before it deteriorates.
Summary
The transformation of unused industrial sites into data centers is accelerating in Japan, driven by the increasing demand for data processing due to the rise of artificial intelligence (AI). These sites often feature existing high-voltage power infrastructure, making redevelopment cost-effective. Major projects include Mitsubishi Corporation and JFE Holdings’ plan to convert a former blast furnace site in Kawasaki City into one of Japan’s largest data centers by 2026, with an estimated cost of ¥120–180 billion. SoftBank and KDDI are repurposing a former Sharp LCD factory in Sakai City, with operations expected to begin in 2026 and 2025, respectively. Mitsui Fudosan is also converting underutilized land near Hino Motors’ headquarters in Tokyo into a data center.
The data center market is projected to grow by 34% from 2024 levels, reaching ¥5.4 trillion by 2029, with construction peaking in 2026. Additionally, unused industrial land is being considered for automated cold storage facilities and semiconductor manufacturing to address growing demand and strengthen domestic supply chains. The Ministry of Economy, Trade, and Industry supports these initiatives, emphasizing the practicality of repurposing sites with existing infrastructure before deterioration.
