SoftBank to Construct Data Center in Hokkaido and Its Purpose

We have previously reported on the trend of decentralizing data centers to regional areas.

This time, we will look at the movements of SoftBank, which plans to construct a data center in Hokkaido.


Meeting between SoftBank President Miyakawa and Hokkaido Governor Suzuki


SoftBank has officially decided in November to gradually develop Japan’s largest data center in Tomakomai City for use in generating AI and other applications, with the government also deciding on a subsidy of up to 30 billion yen for construction costs.


On November 24, Junichi Miyakawa, President of SoftBank, visited the Hokkaido Government Office and met with Governor Suzuki.


President Miyakawa, who has been discussing with Governor Suzuki for about two and a half years, mentioned the advantages such as significant savings in electricity costs for cooling servers due to the cool climate of Hokkaido. He also addressed the disadvantages, such as being slightly away from data-needy areas like Tokyo and Osaka, which could lead to communication delays.


They plan to overcome geographical challenges by using the data center primarily for purposes such as internet backbone line development and AI training models that are less affected by communication delays. They also plan to develop power sources like storage facilities and hydroelectricity to supply renewable energy even at night.


Regarding the development of generative AI at the data center, which is scheduled to open in three years, Miyakawa expressed his ambition to “learn from urban data and build service models that can be used in various regions.”


Governor Suzuki responded by saying, “Rapidus, aiming for domestic production of advanced semiconductors, is also moving in. We want to realize an integrated complex base for research and talent development in Hokkaido. With the decision of this construction plan, we want to accumulate functions as a ‘Data Center Park’.”


Hokkaido and SoftBank plan to sign a comprehensive collaboration agreement to solve regional issues.


Will the Data Center Business Revitalize the Region?


The development of generative AI at the data center, along with the realization of a base for research and talent development, could have an immeasurable impact on the local economy and more. Will the data center business hold the key to regional revitalization? We will continue to pay attention to SoftBank’s movements in constructing the data center in Hokkaido.



Trend Towards Regional Distribution of Data Centers

Amid the issues of centralization of data centers becoming apparent, the government is working on decentralizing data centers to regional areas. Several ministries have already started projects and considerations in this regard.


Data Center Construction Revealed in Mihara City, Hiroshima Prefecture


It has been revealed that a Tokyo-based company is constructing a large-scale data center in the Hongo Industrial Park in Mihara City, Hiroshima Prefecture, to speed up data processing and enhance stability. This company is said to be a group company of the American IT giant Google. The Hongo Industrial Park, funded by Hiroshima Prefecture and Mihara City, has a 275,000 square meter site developed two years ago, and the land was sold for about 5.8 billion yen in a contract concluded on November 17. The investment for the development of the data center is expected to be around 100 billion yen.


Reasons for Choosing Hongo Industrial Park


According to Hiroshima Prefecture, the Hongo Industrial Park was chosen for several reasons: the data center handles a vast amount of information, so a location with less disaster risk was preferred. Also, it is located about 15 minutes by car from Hiroshima Airport and is close to a highway interchange, which is advantageous for maintenance, inspection, and equipment updates.

The company plans to develop the facility in stages, with all facilities expected to be operational around 2033. The prefecture, in cooperation with Mihara City, plans to provide necessary support going forward.


Ministry of Economy, Trade and Industry Supports Regional Distribution of Data Centers


The Ministry of Economy, Trade and Industry announced that it would subsidize up to 30 billion yen for a new data center to be built by SoftBank in Tomakomai City, which will be used for developing AI, including generative AI.


As data centers in Japan are concentrated around Tokyo and Osaka, distributing them to regional areas aims to prepare for large-scale disasters and alleviate regional imbalances in electricity load caused by their massive power consumption.


Economy, Trade, and Industry Minister Nishimura said in a press conference after a Cabinet meeting on November 7, “We want to continue to support the regional distribution of data centers as it also promotes the use of renewable energy available in rural areas.”


Focus on the Trend Towards Regional Distribution of Data Centers


With the remarkable evolution of AI like ChatGPT, it is essential to ensure a good communication environment as the foundation for data exchange. If there are issues with the communication environment, it could cause significant stress to users due to the large amount of data exchanged. From the perspective of maintaining urban functions, the concentration of data centers in certain areas raises concerns about the potential strain on urban electricity. Therefore, the regional distribution of data centers is crucial for risk diversification.

The construction of data centers could potentially revitalize local economies. It is important to pay close attention to the ongoing trend of regional distribution of data centers.