Electricity: The Achilles’ Heel of Vietnam’s AI Data Centers

—With a Look at Global Energy Equipment Manufacturers’ Expansion into Vietnam

Since 2025, Vietnam’s data center market has been growing at a compound annual growth rate of 14%–20%. The complete liberalization of 100% foreign ownership and data localization requirements (PDPL) have driven the deployment of domestic computing power. However, the biggest obstacle to scaling up is not land or regulatory approvals, but electricity.

一、Data shows: Data center capacity in Vietnam is expanding rapidly, but the power grid’s capacity to support this growth is clearly lagging behind

Capacity is surging, but the baseline remains low: According to Savills Vietnam data, Vietnam’s data center design capacity is expected to reach approximately 524.7 MW in 2025 and 950 MW in 2030; the first hyperscale data center is not expected to come online until 2027.
There is a massive investment gap in the power grid: According to estimates by the International Trade and Investment Agency, Vietnam’s power grid will require approximately $128.3 billion in investment by 2030 to meet industrial demand; in the summer of 2025, overloading of Ho Chi Minh City’s power grid led to delays in the deployment of server racks at some data centers and prompted expansion plans to shift to Long An Province.
Low construction costs, high energy consumption: According to a report by Seetao, the cost of building a data center in Vietnam is approximately $6–8 million per MW (only half that of Singapore or Tokyo); however, the power sector requires new projects to build their own 110 kV substations (costing $8–12 million per substation), and AI facilities consume enormous amounts of energy; even if they can purchase green power directly, they still need to pay high prices for grid reserve capacity.
The power market itself is booming: MarkWide Research forecasts that Vietnam’s data center power market will grow from $1.8 billion in 2026 to $8.42 billion in 2035, at a CAGR of 18.7%.

二、 Why Has “Electricity” Become an Achilles’ Heel?

Three Major Constraints:

Insufficient grid capacity + grid connection waiting lists: EVN’s lengthy approval process for high-voltage grid connections extends project development cycles and delays revenue recognition;
The Direct Power Purchase Agreement (DPPA) mechanism is still immature: Unstable green power supply has led companies to widely deploy diesel backup generators, driving up operating costs;
Cumulative approval requirements across multiple stages: Electricity, land, telecommunications, and data compliance are interlinked, and foreign investors place particular emphasis on regulatory stability.

In other words, Vietnam’s advantage of low construction costs is being offset by the “grid bottleneck,” which acts as a hidden ceiling.

Securing a firm power agreement has become the real hurdle for the next wave of investable supply.

三、Global Energy Equipment Manufacturers’ Expansion into Vietnam (Key New Developments)

Facing with surging demand and power supply challenges, UPS、power distribution and liquid cooling manufacturers are accelerating their expansion into Vietnam—and this is precisely the local supply chain that companies and investors operating in Vietnam should leverage.

1) Power Supply and Distribution / UPS: A Cluster of International Giants

2) Heat Dissipation / Liquid Cooling: A Wave of Factory Construction Is Sweeping Through Northern Vietnam

Cooler Master: The Giaphang Industrial Park in Bac Ninh Province has invested $200 million and started production (AI server cooling modules, liquid-cooled CDUs), with plans to add another $2.8 billion over several years.

AVC (Major Cooling Manufacturer): Invested 600 million USD to build a parts factory in the No.1 Industrial Park of Ninh Binh Jinbang, to start production before January 2027, producing cooling fans, cold plates, and liquid cooling systems.

四、Advice for participants in the Vietnamese market

There are three key points to keep in mind for companies investing in and operating data centers and cloud service providers in Vietnam, as well as corporate IT decision-makers:

Electricity availability is the primary criterion for site selection: Priority is given to resource-rich industrial parks located near EVN high-voltage substations and equipped with DPPA and submarine cable landing facilities.
Leverage existing supply chains: Establish local partnerships with Schneider, ABB, Delta, Huawei, Vertiv, and others to shorten delivery times and reduce stranded capacity.
Plan Ahead for Liquid-Cooled and Modular UPS Systems: This is the only way to support high-density cabinets of 30 kW or more and reduce the PUE (target ≤ 1.4).