KT Cloud is moving aggressively into the modular data center market, starting with an artificial intelligence data center project in Gunsan, Jeonbuk State. The company has set a goal of building 1 gigawatt of data center capacity by 2031, and concluded that conventional construction methods cannot keep pace with market demand. KT Cloud plans to carry over the expertise it has built in data center construction and operations into the modular segment.
"We are not insisting on modular designs for every new data center, but delivering capacity quickly is not possible with the legacy approach we use now," Park Jae-woo, managing director of KT Cloud's data center business, said in a recent interview with the Seoul Economic Daily at the company's office in Gangnam, Seoul. "Data centers need an innovative approach as well." KT has previously said it would secure 1GW of AI data center capacity by 2031. A portion of that is likely to be delivered as modular data centers to get capacity to customers faster.
The reasoning is that modular data centers are well suited to the current surge in demand. A modular data center is built by assembling standardized components, or modules, in a prefabricated fashion. Unlike a conventional data center, where a building goes up on a site first and servers, racks and cooling equipment are installed inside afterward, a modular data center is completed by assembling these elements like blocks. "In the past, it took three to five years to take a data center from planning and design through construction to the operational stage," Park said. "A modular data center can deliver the same quality within one to two years."
Another advantage is that modular designs can be engineered around the rapidly advancing performance of graphics processing units. The power and cooling infrastructure of existing data centers cannot handle the high-density power draw and heat generated by the latest AI GPUs. "Power density per rack was 10 to 20 kilowatts as recently as 10 years ago, and now it is 140 to 220 kilowatts, more than a tenfold increase," Park said. "Even if the number of racks stays the same, you need cooling systems and generators to support the added power."
KT Cloud has announced plans to build a 60-megawatt modular data center at the Gunsan AI data center in Jeonbuk State. Construction is scheduled to begin late this year, with full operations starting in the first quarter of 2028. The project will use a "modular and skid solution," a prefabricated approach in which power and cooling equipment, including liquid cooling systems, is manufactured in advance at a factory as container-type modules and then assembled on site. "Building container-type modular data centers requires a wide site, because you cannot stack them vertically," Park said. "Non-metropolitan areas are more favorable than the greater Seoul area for building modular data centers."
KT Cloud says it will focus on proving that it can run modular data centers reliably, drawing on the expertise it has accumulated at conventional facilities. "What matters is whether you can deliver the service level customers actually want, without outages, once the modular data center is built," Park said. "Many companies are entering the modular data center business as the market shifts, and KT Cloud will stay out in front."