Strategy to Bolster Japan's International Network Connections

Data moving to or from massive-volume data centers² run by content providers like Google and Meta accounted for some 64 percent of traffic flowing through the world’s subsea cables in 2019. According to estimates, this holds for data travelling between the US and Japan as well, and it is a factor behind moves by content providers to lay their own networks of undersea cables, separate from those of communications vendors.

Chinese companies, too, are more and more frequently involved in projects to lay intra-Asian submarine cables, reflecting how many have landing points in China (chiefly Hong Kong).

For economic security, marine cable connections should be made multi-route to enhance redundancy, and whenever possible laid by domestic or friendly-country entities. This necessitates more-strategically assembled consortiums of multiple vendors to guarantee optimal cable routings. A project to link Japan with North America and Northern Europe via the Arctic Ocean is already afoot, and it can be characterized as an instance of such multi-routing.

Content providers like Google and Meta embarking on laying their own undersea cables is an indicator of the advantages of controlling their services with their own cable systems. Further, there’s much to be gained from considering together the siting of data centers and cable landing-points. For instance, most cables landing in Japan connect to Internet exchanges in Tokyo or Osaka—which means that over 80 percent of Japan’s data centers are concentrated in the outskirts of Tokyo and Osaka.

A further issue that dogs data centers is that of power. For example, Singapore—typical of areas with high concentrations of data centers in Asia—has begun limiting their new construction because of problems like their burden on electricity supply. Data center siting is also influenced by many other factors, including other communications infrastructure, energy costs, the availability of renewable energy, natural disaster risk, and political stability.

Hong Kong also has a high concentration of data centers, but the environment for doing business has changed since its return to China. With the search on for alternatives, Japan, Taiwan, and Indonesia have emerged as leading candidates, but as things stand each entails its own set of advantages and disadvantages. To enhance Japan’s advantages while making the most of its being a data traffic hub, the country needs to bring users and all other stakeholders together to strategically address two principal issues: power and dispersion.

As gleaned from the Singaporean situation, data-center siting is closely tied to the energy landscape. This relationship makes clear the move globally to erect data centers in countries with low power costs.

Given the now-key social demand that data centers utilize renewable energy, access to such sources is also a determining factor when looking for suitable sites, and sometimes a consideration for dealing with skyrocketing fossil-fuel prices. This all makes huge hurdles out of Japan’s comparatively high electricity costs and limited number of vendors able to supply renewable power in the volumes data centers require.

Natural disasters pose a huge risk: Japan is without a doubt one of the world’s most earthquake-prone countries. No one can afford to be unprepared for quakes at and exceeding magnitude-7 levels, especially given the Tokyo area’s vulnerability to a direct-hit and the imminence of a massive event facing the western region of Japan.

Dispersing data facilities to sites outside of urban centers brings big advantages from the energy perspective³ as well: Whereas sourcing renewable energy for them can be problematic in urban settings, the countryside provides more numerous possibilities. Though costs often surpass demand right now for data centers in the provinces, the imminent data explosion, sparked by generative-AI uptake and other similar developments, could well create demand for siting data centers in out-of-the-way places.