SK Telecom Expands Global Data Center Infrastructure Amid AI and Connectivity Growth

SK Telecom is making a bold move to establish itself as a global leader in data infrastructure and artificial intelligence (AI). The South Korean telecom giant recently announced plans to expand its current data center in Ulsan, South Korea, and build an entirely new facility in Vietnam. These efforts align with the company’s strategy to capitalize on the growing demand for data infrastructure, AI technologies, and connectivity solutions in Asia and beyond.

Ulsan Data Center Expansion: A Gigawatt Initiative

During SK Telecom’s AI Summit on November 3, the company revealed its ambitious plan to increase the Ulsan data center capacity to 1GW, a significant leap from the original goal of 103MW. This expansion is part of an MoU signed with Ulsan Metropolitan City, with preliminary construction starting in September. The site, previously used by the company’s chemicals division, reflects a collaborative venture with Amazon Web Services (AWS). While early plans scheduled part of the facility to be operational by 2027 and completed by February 2029, the updated capacity may prompt revisions to the timeline. The South Korean Ministry of Science has backed the expansion with a sizable $5.11 billion budget, showing that the nation is betting on data infrastructure as a key to digital transformation.

Vietnam and Regional Growth Plans

Beyond South Korea, SK Telecom is also eyeing growth in Southeast Asia with plans to construct a data center in Vietnam powered by LNG energy sources. While details about the size and specific location remain under wraps, the move reflects a growing trend among Korean companies investing in Vietnam’s digital infrastructure. Samsung, LG, and KT have all signed agreements with Vietnamese firms to foster local tech capabilities, AI solutions, and data centers. SK Telecom’s new CEO, Jung Jaihun, has also hinted at possible expansions into Malaysia and Singapore, signaling that the company is preparing for a pan-Asian presence in data and AI ecosystems.

Rising Competition and Industry Transformations

The data center expansion is taking place amidst growing competition and shifting market dynamics. SK Telecom recently reported poor third-quarter earnings due to a significant cyberattack in April, which caused over 300,000 customers to switch providers. However, the company’s AI segment provided a silver lining, showing a 32.2% increase in revenues. Concurrently, South Korea is witnessing an AI-driven wave of industry transformation. Companies like SK Hynix and Nvidia are dedicating resources to hyperscale computing, AI chips, and broader technology innovation. For instance, Nvidia recently committed to supply over 250,000 GPUs to hyperscale and government facilities in South Korea.

AI’s Role in Driving Data Center Demand

The rising demand for AI computing is fueling an unprecedented wave of new data center projects across the globe. Companies like Naver and AWS have announced significant investments in South Korean data centers, further solidifying the nation as a technology hub. SK Telecom’s investments indicate that the company not only aims to improve connectivity and AI solutions for its enterprise sector but also to establish itself as a major player shaping the future of telecommunications and cloud computing. Moving forward, these expansions may redefine how industries incorporate AI solutions and leverage scalable infrastructure on a global scale.