A recent report has revealed that Singapore accounted for a whopping 15% ($ 2.7 billion) of Nvidia’s revenue for the third quarter (Q3) of 2023, which ended October.
Revenue from the island country in SouthEast Asia, in the third quarter, soared by 404%, from the $562 million in revenue recorded in the same period a year ago. This reportedly outpaced Nvidia’s overall revenue growth of 205.5% from a year ago.
Singapore trailed behind the United States (34.77%), Taiwan (23.91%), and China (22.24%) in Nvidia’s third-quarter sales rankings.
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Analyst at Maybank Securities, Jarick Seet, stated that Singapore accounted for a significant part of Nvidia’s third quarter result because the country has quite a lot of data centers and cloud service providers.
Also speaking on this, former Executive at Global Investa Capital (GIC), Sang Shin, via a LinkedIn post said that the ongoing establishment of data centers in Singapore was what saw it account for a significant portion of Nvidia’s revenue.
He wrote,
“Woah! A whopping 15% of Nvidia’s global revenues came from SG, what’s a tiny city-state doing w/all those chips? Building data centers, of course! But why in a hot environment with no land to spare? Because the nation is stable and secure, there is a lot of talent, the digital infrastructure is solid, and the government policies are conducive to digital and data services. That’s why.
“This Nvidia financial statement is proof to me that Singapore is correctly pivoting away from what worked so well for it the past 50 years into a new digital world that will work well for it in the next 50 years”.
Citi analysts in a report written in November 2023, disclosed that in Singapore, a certain consumer Internet company purchased data center solutions in Q3, further noting that the country is also a growing area of specialized CSPs standing up data centers in the region.
Singapore is placed strategically in the heart of South East Asia, which has been a key driver of its data center boom and allows the country to act as a digital bridge between the East and West. This central location ensures data centers in Singapore can serve a wide range of countries efficiently, making it an ideal hub for businesses aiming to expand their services in the region.
As of January 2022, there were more than 70 operational data centers in Singapore. Tech giant company, Google, already has three data centers in Singapore.
The island country in Southeast Asia emerged third globally and first in the Asia Pacific in terms of data center marker rankings. Analysts predict that the demand for Data centers in Singapore will remain high with the rapid growth of digital apps, e-commerce, internet of things, artificial intelligence, cryptotrading, blockchain activities, online gaming, etc.
At a regional level, data centers across Asia Pacific are growing in scale, and new markets are being evaluated for expansion as operators anticipate increased demand from continued digitization and wider adoption of artificial intelligence.
Notably, COVID-19 is reported to have accelerated the demand for data centers as businesses need to leverage Al and modern automation technology to support their business needs as well as to keep their staff and users safe.
This includes migrating to the cloud, virtualizing resources and processes, and more, as hybrid work arrangements, will be set to stay in the coming years, and possibly become the norm moving forward.