Bangkok: As the conflict in the Middle East between Iran and the Strait of Hormuz continues into its 60th day, the global energy supply chain faces significant disruptions. This has particularly affected energy shipments through the Strait of Hormuz. Assoc. Prof. Dr. Danuwat Sakarik highlights that Thailand's ambition to become a regional data center hub is being tested by the volatile energy costs that may become a long-term trend.
According to Thai News Agency, data centers, which are central to the digital economy and AI, are heavily reliant on energy. The majority of their operating costs stem from electricity usage. As global energy prices become increasingly volatile and are expected to rise, investors must weigh energy security and future costs carefully.
In the ASEAN region, Thailand faces tough competition from its neighbors in attracting global tech investments. Malaysia benefits from a lower electricity pricing structure and reduced vulnerability to external factors. Singapore is known for its high system reliability, while Vietnam's rapid growth is fueled by proactive policies and renewable energy expansion. Assoc. Prof. Dr. Danuwat sees Thailand as occupying a "middle ground" position. Despite supportive policies from the Board of Investment (BOI), Thailand lacks a distinct competitive edge in several areas.
Thailand's energy infrastructure readiness for supporting data centers is rated at 70 out of 100 by Assoc. Prof. Dr. Danuwat. He argues that addressing the remaining 30 points is vital for Thailand to emerge as an "AI Hub." Key areas needing improvement include energy source diversification, expansion of clean energy initiatives, and the establishment of clear and concrete policies, like fixed long-term electricity pricing and streamlined business establishment processes.
Assoc. Prof. Dr. Danuwat emphasizes that becoming a data center hub requires more than IT technology competitiveness; it also demands advancements in energy and environmental infrastructure. He concludes that Thailand could become a second-layer hub or regional center if it adapts its energy strategy to address cost, stability, and environmental concerns. In an era where information demand is ever-increasing, energy will be the decisive factor in the digital competition. If Thailand can adapt swiftly, it could convert investor interest into actual investments.