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The trend towards increasingly large-scale data centers (DCs) is gaining serious traction, highlighted by Tsukuba’s first hyperscale data center project, which drew significant attention during its bidding phase. This initiative is spearheaded by Australia’s Goodman Group. In 2022, the company successfully acquired approximately 45 hectares of land in response to a public call for proposals conducted by Tsukuba City as part of its industrial promotion strategy. This region, developed as a “Science City,” already possesses well-established infrastructure, including telecommunications, power, and water, along with excellent accessibility from the Tokyo metropolitan area. Furthermore, it offers significant potential for further development, making it one of the few locations in Japan equipped to host hyperscale data centers.

The Full Scope of the 1GW Hyperscale DC Development

In January 2024, Goodman formally announced the “Goodman Tsukuba Data Center Campus.” The vision is for a campus-style data center envisioned to have a maximum power capacity of up to 1GW (1000MW) – a scale unprecedented in Japan. The first phase, a 50MW facility, is currently under construction and slated for completion in 2026. Notably, preliminary agreements with key anchor tenants are already in place, highlighting its alignment with current market demand. Goodman also operates a data center cluster exceeding 300MW in Inzai City, Chiba, and Tsukuba is set to become its next flagship location.

Next-Generation Infrastructure Driven by Global Strategy and Environmental Commitment

Goodman’s data center strategy is global, with developments also underway in other key global cities such as Hong Kong, Los Angeles, Sydney, and Melbourne. In February 2025, Goodman announced it had secured approximately USD 4 billion (around JPY 600 billion) for data center development. The company is projecting up to USD 80 billion in development opportunities over the next 5 to 7 years and has already secured a total power capacity of 4GW.

The company is also at the forefront of environmental sustainability. Through low-carbon building design and the proactive integration of renewable energy, Goodman is strengthening its adherence to ESG (Environmental, Social, and Governance) criteria. This is a significant draw for global cloud providers and AI operators that prioritize sustainability.

A Project Redefining Japan’s Role in the Mega Data Center Era

Thus, the 1GW-class data center development in Tsukuba stands as a landmark project, heralding a new phase for Japan’s domestic data center industry. This plan, achieved through a collaboration between public and private sectors, not only enhances the value of the region but is also garnering considerable attention as an initiative poised to redefine Japan’s standing in the age of mega data centers.

Large factories once supporting Japan’s rapid economic growth, such as steelworks and electronics manufacturers, are now successively transforming into data centers (DCs) in response to the demands of the digital age. A prominent example drawing attention is the DC project in Kawasaki City by Mitsubishi Corporation and JFE Holdings.

Former Manufacturing Bases Evolve into the Heart of the AI Era

The two companies are moving forward with a plan to invest 100 to 150 billion yen to construct a large-scale data center on the site of the JFE Steel East Japan Works Keihin District (Kawasaki coastal area), where blast furnace operations ceased in 2023. A feasibility study is slated for completion by fiscal year 2025, with operations scheduled to begin as early as fiscal year 2030. If realized, it will be the largest DC operated by the Mitsubishi Corporation Group, with an anticipated power consumption of 60,000 to 90,000 kilowatts.

This plan reflects a symbolic paradigm shift from manufacturing to information industries. The Kawasaki steelworks was a crucial base that supported Japan’s steel industry for approximately 90 years, dating back to the Japan Steel Tube era. However, intense global competition led to the cessation of blast furnace operations. Now, this very site is set to transform into a state-of-the-art information infrastructure that meets the demands of AI and cloud computing.

In particular, the widespread adoption of generative AI has rapidly increased the need for infrastructure capable of high-speed processing of large volumes of data. Demand for servers using high-performance semiconductors from US-based Nvidia is also rising, prompting companies to seek new DC locations. Former factory sites, with their expansive land and robust power infrastructure, offer ideal conditions to meet these requirements.

Sakai, Kawasaki, and Across Japan: Redefining Former Factory Sites

Similar movements are becoming evident in other regions. In Sakai City, Osaka Prefecture, the Sakai Factory, known for Sharp’s LCD panel manufacturing, is undergoing a transformation plan to become a DC under the hands of major telecommunications companies SoftBank and KDDI. What was once a “monozukuri (manufacturing) hub” is now poised to evolve into an “information processing hub.”

According to forecasts by research firm Fuji Keizai, Japan’s domestic DC market is expected to reach 5,403.6 billion yen in 2029, a 34% increase compared to 2024. Consequently, not only traditional office buildings and suburban facilities, but also industrial zones in urban peripheries are gaining attention as DC locations.

The repurposing of industrial land is a topic that concerns not only real estate development but also energy policy and regional revitalization. Data centers, in particular, consume massive amounts of electricity, making the introduction of renewable energy and the establishment of local production and consumption power supply systems key for the future.

Factory complexes that once drove the Japanese economy are once again in the spotlight as foundational infrastructure for the digital society. From heavy industries to information industries—the demands of the times and technological evolution are fundamentally reshaping urban landscapes and land values.