In a significant move set to bolster Japan’s AI capabilities, SoftBank announced plans to construct a substantial AI data center at Sharp Corporation‘s LCD panel plant in Sakai City, Osaka Prefecture. The data center, which will cover an extensive land area of 750,000 square meters and boast a power capacity exceeding 150 megawatts (MW), is slated for full-scale operations by 2025.
The project is part of a larger strategy by SoftBank to enhance its computational infrastructure for generative AI (GenAI) and related AI businesses, a vision underscored by its recent memorandum of understanding (MoU) with Sharp.
On Friday, the two Japanese companies revealed their strategic collaboration, detailing SoftBank’s acquisition of approximately 60% of the total land area of Sharp’s Sakai Plant. This acquisition includes taking over critical resources such as the plant’s buildings, electric power supply facilities, and cooling systems, enabling a rapid construction timeline for the data center.
Despite the magnitude of this acquisition, neither SoftBank nor Sharp has disclosed the financial terms of the agreement.
- Construction Start: Autumn 2024
- Full-Scale Operations: 2025
- Investment: ¥170 billion (US$1.1 billion) by 2025
SoftBank plans to commence construction of the data center in the autumn of 2024, with full operational capacity expected in 2025. This investment is part of a broader ¥170 billion (US$1.1 billion) initiative to enhance its AI and computational infrastructure across Japan, with the Sakai plant data center serving as a pivotal hub for the Kansai region.
SoftBank’s new data center will cater primarily to its own GenAI development needs, but the company also aims to lease data center space to external entities, including universities, research institutions, and private companies engaged in AI application development.
- Generative AI Development: SoftBank’s primary use
- Support for External Entities: Available space for universities, research institutions, and companies
- Future Expansion: Plans to increase power capacity to over 400MW
- Environmental Considerations: Focus on integrating clean energy sources to minimize environmental impact
SoftBank is particularly focused on expanding the data center’s power capacity beyond 400MW in the future, with a strong emphasis on utilizing clean energy sources to minimize the environmental footprint.
The MoU also opens the door for future collaboration between SoftBank and Sharp in AI-related business ventures. This potential partnership could leverage both companies’ strengths in technology and infrastructure, paving the way for innovative AI solutions and applications.
In a related development, Sharp disclosed its ongoing discussions with KDDI and partners Super Micro Computer and Datasection to build another AI data center at the Sakai Plant. This initiative underscores Sharp’s strategic pivot towards AI, amidst challenging market conditions in the LCD panel sector.
| Companies Involved | Roles and Responsibilities |
|---|---|
| Sharp Corporation | Providing the site and infrastructure for the AI data center |
| KDDI | Managing network infrastructure and operating the AI data center |
| Super Micro Computer | Implementing a platform capable of efficiently managing heat generation |
| Datasection | Supporting the operation and development of the AI data center |
According to KDDI, this facility is poised to become the “largest AI data center in Asia” and will be equipped with Nvidia’s cutting-edge AI computing platform. The collaboration aims to accelerate the construction process and begin operations as soon as feasible.
The Future of the Sakai Plant and Sharp’s Strategic Shift
Sharp’s decision to repurpose its Sakai plant for AI data centers marks a significant shift from its previous focus on LCD panel manufacturing. The plant, which cost approximately JPY400 billion (US$2.55 billion) to build in 2009, has struggled to compete with lower-cost rivals from China and South Korea. As a result, Sharp announced in May that it would cease LCD panel production at the Sakai facility by September.
- Historical Investment: Built in 2009 with a JPY400 billion (US$2.55 billion) investment
- Market Challenges: Struggled against competitive pressures from Chinese and Korean manufacturers
- Closure Announcement: LCD panel production to end by September
- Strategic Repositioning: Shift towards AI data center development
SoftBank’s ambitious plan to develop an AI data center at Sharp’s Sakai plant underscores Japan’s growing focus on AI infrastructure and capabilities. This partnership not only aligns with SoftBank’s strategic objectives but also represents a critical pivot for Sharp, as it navigates the competitive landscape of the technology industry.
With significant investments and a commitment to clean energy, both companies are set to play a pivotal role in advancing AI development and applications in Japan and beyond.
- SoftBank to build a 750,000 square meter AI data center at Sharp’s Sakai Plant.
- Facility to start full-scale operations in 2025 with a 150MW power capacity.
- Potential to expand power capacity to over 400MW in the future.
- SoftBank to invest ¥170 billion (US$1.1 billion) by 2025 in its AI infrastructure.
- Sharp also in talks with KDDI to build a separate AI data center at the Sakai site.
This evolving landscape signals a significant transformation for both companies, promising to shape the future of AI technology in Japan.
Related News:
Featured Image courtesy of TechCrunch