The data center industry in Latin America is expected to boom in the next two years, as American firms look to co-locate their equipment in Mexico and other countries due to a lack of space in U.S. data centers.

The move toward nearshoring is being driven by lack of available space in U.S. data centers, lower cost of operating data centers in Latin America, and growing demand for data center services in Latin America.

According to industry research firm datacenterHawk, technological adoption and investment are driving the expansion of Latin American data centers. With 2.88% vacancy in U.S. data centers, co-location opportunities are extremely limited. While building continues, supply chain issues, such as server and security component shortages, are delaying development.

The lack of data sovereignty regulations in Latin America, and for power outages are some potential risks associated with data center nearshoring.

The sources for this piece include an article in DataCenterKnowledge.