TOKYO - Data center construction is accelerating across Japan as artificial intelligence drives demand for computing capacity, creating new business opportunities for domestic companies supplying air-conditioning systems, transformers, measuring equipment, construction machinery, batteries and electrical distribution systems.
While semiconductor makers, optical fiber companies and other high-tech suppliers have attracted much of the attention surrounding data center investment, the expansion of physical facilities is increasingly benefiting companies tied to construction and infrastructure.
One of the largest projects under consideration is in Akita city, where Japanese and U.S. companies are planning what could become one of Japan's biggest AI data centers.
According to a Nikkei report dated August 7, discussions are under way for investment from the United Arab Emirates and other parties, with development costs expected to reach about 2 trillion yen. Major Japanese companies are also expected to participate, with operations targeted for the early 2030s.
Akita Prefecture is emerging as a potential location because of its large offshore wind power resources. More than 2 million kilowatts of offshore wind capacity, equivalent to the electricity use of about 1.5 million households, is expected to be introduced at four locations in the prefecture.
Locating data centers close to renewable power generation could provide the large volumes of electricity they require while reducing transmission losses.
SoftBank is pursuing a separate project in Tomakomai, Hokkaido, where it held a groundbreaking ceremony in April 2025 for what is planned as one of Japan's largest AI data centers.
The facility is intended to operate entirely on renewable energy generated in Hokkaido and is scheduled to begin operations in fiscal 2026. SoftBank plans eventually to expand its power demand to more than 300 megawatts.
The telecommunications company is also planning an AI data center in Sakai, Osaka Prefecture, using facilities at a former Sharp factory. Operations are planned to begin during 2026, allowing the company to make use of existing infrastructure and shorten the period between investment and start-up.
Another regional initiative began in Kagawa Prefecture on August 5 with the establishment of the Kagawa AI Factory Promotion Consortium.
The public-private organization includes Kagawa Prefecture, Nvidia, Shikoku Electric Power and 16 companies and organizations. It aims to promote the use of AI as regional infrastructure while strengthening activity related to data centers.
The central government is also seeking to accelerate the sector's expansion.
Under the Takaichi Cabinet's growth strategy, data centers have been designated as one of 17 strategic fields. The government is targeting a domestic market of 30 trillion yen by 2035.
Public and private investment totaling 32.7 trillion yen is planned through fiscal 2035, including investment in related power infrastructure, with an estimated economic impact of 107.1 trillion yen.
The strategy also calls for greater regional dispersal of data centers, encouraging facilities to be built outside the country's largest metropolitan areas and linking power generation more closely with local consumption.
The expansion is expected to benefit not only semiconductor companies but also a wide range of businesses involved in constructing and operating the facilities.
Hibiya Engineering, listed under securities code 1982, is one such company.
The company specializes in air-conditioning systems and counts NTT as its largest customer. It has particular strength in telecommunications-related projects, including data centers, drawing on experience dating back to work on NTT telecommunications facilities.
Its data center operations include cooling equipment used to manage the large amounts of heat generated by servers, building piping, connections to heat-source equipment and noise-control measures for urban data centers.
For the first quarter of the fiscal year ending March 2027, Hibiya Engineering reported operating profit of 2.169 billion yen, up 34% from a year earlier.
The company said it had steadily secured multiple data center contracts, including large-scale projects.
Under its medium-term plan, Hibiya Engineering is targeting operating profit of 12.5 billion yen for the fiscal year ending March 2029, compared with a forecast of 11 billion yen for the current fiscal year. Its basic strategy specifically includes expanding its business by capturing strong data center demand.
Daihen, securities code 6622, is another company positioned to benefit.
Formerly known as Osaka Transformer, the company specializes in large transformers used in substations and factories.
It plans to double production capacity for large transformers by fiscal 2029 in response to rising demand connected with the data center construction boom.
The company is expected to invest about 10 billion yen to construct new facilities at its Mie plant and expand existing factories.
Electric utilities are reinforcing transmission networks as more data centers are built, contributing to shortages of the large transformers used at substations. Other Japanese companies operating in the same field include Meidensha and Fuji Electric.
Hioki E.E., securities code 6866, is benefiting from another aspect of the expansion.
The company manufactures electronic measuring equipment, including testers used for laboratory and field measurements.
For the first half of its fiscal year ending December, Hioki reported operating profit of 5.053 billion yen, up 54% from a year earlier.
Sales increased 24%, supported by expanding demand for passive electronic components used in data center-related applications.
The company expects full-year operating profit of 9.5 billion yen, representing growth of about 40%.
Its measuring equipment is used across a broad range of data center systems, including cooling equipment, air-conditioning units, heat exchangers, power distribution panels, uninterruptible power supplies and servers.
Kanamoto, securities code 9678, could also benefit from the construction phase.
The Hokkaido-based company operates a nationwide construction equipment rental business.
Large data center projects require significant quantities of construction machinery, creating opportunities not only for equipment manufacturers such as Komatsu and Hitachi Construction Machinery but also for rental companies capable of supplying machinery for limited project periods.
Kanamoto's sales related to data center projects have been increasing steadily. For the fiscal year ending October 2026, the company expects operating profit to rise 8% from the previous year.
PowerX, securities code 485A, is seeking opportunities in energy storage and modular data center systems.
Data centers can experience large differences between peak and low electricity consumption, increasing the value of systems that store electricity when demand is lower and release it when consumption rises.
In February 2026, PowerX announced a containerized data center product called Mega Power DC, applying technology developed through its battery storage business.
The system integrates servers, power supplies, cooling equipment and a large-scale battery storage system into a container. By combining the equipment into a single unit, the company says construction time and costs can be reduced.
The system can also be installed without the large-scale construction work required for a conventional data center, making rapid deployment one of its main features.
In August, PowerX also announced a product designed to make grid connections for battery storage facilities faster and simpler.
Osaki Electric, securities code 6644, is another potential beneficiary.
The company is Japan's leading manufacturer of electricity meters and is expanding its smart-meter business, which automatically measures electricity use and transmits the information digitally to utilities.
Its subsidiary Osaki Electric Systems is active in the data center market and has strengths in power distribution panels used at such facilities.
For the fiscal year ending March 2027, Osaki Electric expects consolidated operating profit to rise 24% to 8.1 billion yen.
More than half of the parent company's sales are related to electric utilities, meaning investment by power companies to support data center expansion can indirectly increase demand for its products.
The company also supplies distribution panels installed above server racks, where they help provide stable electricity to servers and manage the switching and distribution of power.
As Japan's data center market expands, the investment impact is spreading well beyond the semiconductor industry, creating a growing domestic market for companies involved in construction, electrical infrastructure, cooling, energy storage, testing equipment and machinery supply.
Source: 日経CNBC 公式チャンネル
