Research and Analysis of the 2024 China Data Center Industry Chain Map

According to a report by China Business Intelligence Network, data centers are specialized networks of interconnected equipment that facilitate the transmission, acceleration, presentation, computation, and storage of data across the Internet infrastructure. With the rapid advancement of artificial intelligence and information technology, data centers—serving as the core infrastructure underpinning digital transformation—are increasingly emerging as the foundational “base” of new-quality productive forces driving economic and social development.

I. Industrial Chain

The upstream segment of the data center industry chain comprises equipment and software, including IT hardware, power supply systems, precision air-conditioning units, diesel generators, DCIM solutions, and infrastructure monitoring systems. The midstream segment encompasses data center integration services, data center operations and maintenance services, cloud service providers and solutions, and telecom operators. The downstream segment serves industries such as the internet, finance, manufacturing, software, and government agencies.

Image source: China Business Industry Research Institute

II. Upstream Analysis

1. Server

(1) Market Size

With the rapid development of cloud computing, the Internet, and artificial intelligence, China’s demand for servers has continued to expand, driving sustained growth in the market. According to the “2024–2029 China Server Industry Demand Forecast and Development Trend Outlook Report” released by the China Business Industry Research Institute, China’s server market size grew from RMB 131.86 billion in 2019 to RMB 198.08 billion in 2022, representing a compound annual growth rate of 14.5%. In 2023, the market size was approximately RMB 223.15 billion. Analysts at the China Business Industry Research Institute forecast that the server market will reach RMB 245.61 billion in 2024.

Data sources: Compiled by IDC and the China Business Industry Research Institute.

(2) Competitive Landscape

In terms of market share, Inspur Information ranked first in 2022, with a 28.1% share. H3C’s server market share stood at 17.2%, significantly outpacing its competitors. Following closely were Sugon, Ningchuan, ZTE, Dell, and Lenovo, with market shares of 10.1%, 6.2%, 5.3%, 5.1%, and 4.9%, respectively.

Data sources: Compiled by IDC and the China Business Industry Research Institute.

1. router

(1) Market Size

A router is a hardware device that connects two or more networks, serving as a gateway between them. It is a specialized, intelligent networking device that reads the address in each data packet and determines the optimal path for its transmission. According to the “2024–2029 China Router Industry Outlook Forecast and Strategic Investment Opportunity Analysis Report” released by the China Business Industry Research Institute, the global router market size declined by 0.42% year on year in 2023, reaching US$16.45 billion. Analysts at the institute forecast that the router market will grow to US$16.84 billion in 2024.

Data source: Compiled by the China Business Industry Research Institute.

(2) Competitive Landscape

Leading companies in China’s router manufacturing sector include Huawei, H3C, Cisco, and Ruijie. Huawei and H3C hold the largest market shares, at 49.6% and 31.4%, respectively. Cisco and Ruijie Networks rank third and fourth, with market shares of 7.3% and 5.5%, respectively.

Data source: Compiled by the China Business Industry Research Institute.

1. Switch

(1) Market Size

The application of information technologies such as cloud computing, big data, 5G, and the Internet of Things has created new growth opportunities for the network equipment industry. At the same time, the Chinese government has continuously introduced and supported IT-driven development through industrial policies—including “Internet Plus,” Industry 4.0, and New Infrastructure—thereby fostering favorable conditions for the sector’s expansion. According to the “2024–2029 China Switch Market Outlook Survey and Investment & Financing Strategy Research Report” published by the China Business Industry Research Institute, switches account for the vast majority of the Chinese network equipment market, with the market size reaching approximately RMB 59.1 billion in 2022, up 17.96% year on year, and about RMB 68.5 billion in 2023. As switches are increasingly deployed across diverse downstream network environments—including data center networks, campus networks, and the industrial internet—analysts at the China Business Industry Research Institute project that the Chinese switch market will grow to RMB 74.9 billion in 2024.

Data source: Compiled by the China Business Industry Research Institute.

(2) Competitive Landscape

In the Chinese market, the switch industry is highly concentrated, with a handful of companies—namely Huawei, H3C, and Ruijie Networks—accounting for the vast majority of market share, at 35.8%, 32.4%, and 14.6%, respectively, thus exhibiting an oligopolistic competitive landscape. Cisco and ZTE hold market shares of 4.8% and 2.1%, respectively.

Data source: Compiled by the China Business Industry Research Institute.

1. Optical module

(1) Market Size

Optical modules are composed of optoelectronic components, functional circuits, and optical interfaces, with the optoelectronic components comprising both transmitting and receiving sections. According to the “2024–2029 China Optical Module Industry Market Outlook Forecast and Future Development Trends Research Report” published by the China Business Industry Research Institute, the global optical module market was valued at approximately US$9.6 billion in 2022, representing a year-on-year growth of 9.09%. Analysts at the institute forecast that the global optical module market will reach US$9.9 billion in 2023 and is expected to surpass US$15.6 billion by 2027.

Data source: Compiled by the China Business Industry Research Institute.

(2) Analysis of Key Enterprises

The trend toward higher data rates, lower power consumption, and greater integration in optical modules is creating numerous new opportunities. Major optical-module manufacturers are actively deploying resources in the 800G segment, with varying degrees of progress across both conventional 800G modules and silicon-photonics–based 800G solutions, as illustrated in the figure.

Source: Compiled by the China Business Industry Research Institute

1. Transformer

(1) Production

A transformer is a device that uses the principle of electromagnetic induction to change alternating-voltage levels, and it comprises two main categories: power transformers operating on the transmission grid and distribution transformers serving end-use applications. According to the “2024–2029 China Transformer Industry Development Research Report” published by the China Business Industry Research Institute, transformer output in 2022 was approximately 1.948 billion kVA, up 5.1% year on year, while in 2023 it reached about 2.075 billion kVA. With the successive implementation of ultra-high-voltage projects across China, the country’s power-transformer market is expected to continue expanding in the coming years. Analysts at the China Business Industry Research Institute forecast that transformer output will exceed 2.1 billion kVA in 2024.

Data sources: Compiled by the China Machinery Industry Federation and the China Business Industry Research Institute.

(2) Analysis of Key Enterprises

Currently, the Chinese transformer industry exhibits low market concentration and a relatively fragmented market structure. The major players include TBEA Shenyang Transformer Group Co., Ltd., Qingdao Transformer Group Co., Ltd., Jiangsu Huapeng Transformer Co., Ltd., XJ Electric Co., Ltd., Baoding Tianwei Baobian Electric Co., Ltd., Jiangsu Huachen Transformer Co., Ltd., Sanbian Technology Co., Ltd., and Shandong Jinshida Transformer Co., Ltd. Specific details are shown in the figure.

Source: Compiled by the China Business Industry Research Institute

III. Midstream Analysis

1. Global market size

With the expanding application of information technologies such as cloud computing, big data, the Internet of Things, and artificial intelligence, the global data center market continues to grow in size. According to the “2024–2029 Global and China Data Center Market Status and Future Development Trends Report” released by the China Business Industry Research Institute, the global data center market was valued at approximately US$82.2 billion in 2023, representing a year-on-year increase of 10.04%. Analysts at the institute forecast that the global data center market will reach US$90.4 billion in 2024.

Data source: Compiled by the China Business Industry Research Institute.

1. China's market size

Driven by national policies such as new infrastructure development, digital transformation, and the vision and goals of Digital China, China’s data center market has maintained rapid growth. According to the “2024–2029 China Data Center Construction Market Demand Forecast and Development Trend Outlook Report” released by the China Business Industry Research Institute, the size of China’s data center market in 2023 was approximately RMB 240.7 billion, representing a year-on-year increase of 26.68%. Analysts at the institute forecast that the market will reach RMB 304.8 billion in 2024.

Data source: Compiled by the China Business Industry Research Institute.

1. Data center rack scale

In recent years, the scale of data center racks in China has grown steadily. According to the “2024–2029 China Data Center Construction Market Demand Forecast and Development Trend Outlook Report” released by the China Business Industry Research Institute, as of the end of 2023, the three major basic telecommunications operators had a total of 970,000 internet data center racks in service for the general public, representing a net increase of 152,000 for the year. Analysts at the China Business Industry Research Institute forecast that the number of data center racks in China will reach 1.09 million in 2024.

Data sources: Compiled by the Ministry of Industry and Information Technology and the China Business Industry Research Institute.

1. Investment and Financing Situation

In recent years, the number of investment deals in China’s data center industry has remained relatively stable, while the total investment amount has been on a downward trend. In 2023, there were 18 data center investment deals in China, with disclosed funding totaling RMB 4.192 billion. From January to March 2024, the number of such deals stood at 3, with disclosed funding reaching RMB 350 million.

Data sources: Compiled by IT Juzi and the China Business Industry Research Institute.

1. Analysis of Key Enterprises

Currently, China has a large number of listed companies in the data center industry. Among them, the top 50 companies by revenue are primarily concentrated in Beijing and Guangdong Province, with seven firms in each. Jiangsu Province and Zhejiang Province each have six firms, ranking third.

Source: Compiled by the China Business Industry Research Institute

1. Enterprise Heat Map

Source: Compiled by the China Business Industry Research Institute

IV. Downstream Analysis

1. Downstream Application Status

Downstream applications of data centers in China are primarily concentrated among internet service providers, accounting for 60% of the total—more than half. The financial sector follows, with a 20% share; government agencies account for 10%; and manufacturing represents 3%.

Data source: Compiled by the China Business Industry Research Institute.

1. Internet

In 2023, the internet and related services sector demonstrated a stabilizing and improving development trend. Revenue from internet operations continued to accelerate, total profits remained on an upward trajectory, and R&D spending declined slightly. According to data from the Ministry of Industry and Information Technology, in 2023, China’s large-scale internet and related services enterprises recorded internet business revenue of RMB 1.7483 trillion, up 6.8% year on year. Analysts at the China Business Industry Research Institute forecast that in 2024, such enterprises’ internet business revenue will grow to RMB 1.827 trillion.

Data sources: Compiled by the Ministry of Industry and Information Technology and the China Business Industry Research Institute.

1. Online Government Services

In 2023, China’s top-level design for online government services was further refined, and its underlying institutional framework was strengthened, thereby providing solid support for the steady advancement of high-quality digital governance. According to the Statistical Report on Internet Development in China, as of December 2023, the number of users of online government services in China reached 972.81 million, an increase of 47.01 million from December 2022, accounting for 89.1% of the total internet user population.

Data sources: Compiled by CNNIC and the China Business Industry Research Institute.