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Chinese telecom rack and cabinet manufacturers have experienced a significant rise in exports over the past year, largely driven by the global growth of artificial intelligence and the rapid expansion of data centers worldwide.
“The first quarter saw a revenue increase not seen in years,” stated Wang Lei, senior vice president of Safewell Group Holdings China, during the spring session of the biannual China Import and Export Fair, also known as the Canton Fair.
A recent market research report projects that the global data center rack market will surpass $9.4 billion by 2033, up from $4.5 billion in 2024. The growth is fueled by surging AI demand, the proliferation of hyperscale data centers, and increased focus on data sovereignty, among other factors.
Safewell’s revenue from telecommunications equipment soared by triple digits in the first quarter compared to the previous year. Their cabinets are mainly used in the data centers of major technology companies across the U.S., Europe, and Southeast Asia, Wang explained.
Due to heightened chip prices over the last two years, the industry has become less sensitive to the costs of other infrastructure components such as data racks and cabinets. Instead, buyers are placing greater importance on factors like delivery speed, quality, service, pricing, and customization options, creating new opportunities for Chinese suppliers, according to Yin Yongping, general manager of Safewell’s telecom equipment division.
“A new manufacturing line in China can be completed in just three months, whereas similar projects abroad typically take over a year,” Yin emphasized.
The sales director of a Beijing-based telecom cabinet manufacturer noted that because of the large demand for data center construction abroad, their products are expected to remain highly sought after for at least the next three decades.
Supported by robust global and domestic demand for data center infrastructure, the market for integrated, server, and traditional network cabinets is expanding rapidly. Cabinets designed specifically for AI computing hardware, with ample room for high-speed fiber optic cabling, are in especially high demand, according to Yu Weizu, domestic market director at Otrans Communication Technologies.
In Southeast Asia, cabinet demand primarily stems from new AI data center projects, while in Europe and Latin America, the focus is on upgrading power grids and telecom infrastructure. Fan Ruifang, sales manager at Hangzhou-based Otrans, added that countries like Germany, Switzerland, France, and Italy are seeing notable demand for these products.
Otrans is exploring sites in Malaysia and Vietnam to establish new manufacturing facilities to meet the increasing overseas orders and also plans to partner with high-end brands in the United States, Fan revealed.
Safewell is also considering building a factory in Vietnam. While setting up operations in Southeast Asia offers advantages in labor and raw material costs, it also presents challenges such as shortages of skilled workers, quality control issues, and inconsistent power supplies. Some components and raw materials still need to be imported from China, Yin noted.
“Factories in Southeast Asia cannot operate independently in terms of management, technology, or supply chain logistics without support from their Chinese headquarters,” Yin explained.
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