After successfully attracting companies such as Tesla to import its electric vehicles (EV) here and build a network of superchargers and Amazon Web Services to invest RM25.5 billion ringgit in cloud-computing infrastructure by 2037, Malaysia is setting their eyes next on two of the world biggest tech giants, Microsoft and Google.
According to The Malaysian Reserve, Trade Minister Tengku Zafrul Abdul Aziz said that Malaysia aims to entice Microsoft Corp. and Alphabet Inc.’s Google as it positions itself as a neutral supply chain base and a data hub amidst escalating tensions between the US and China.
In an interview with Bloomberg Television’s Haslinda Amin, Zafrul stated that Malaysia is actively attracting businesses and gradually establishing itself as a centre for data centres. The ongoing trade tensions have prompted global companies to seek alternative locations outside of China, and Malaysia is competing with other Southeast Asian nations like Vietnam and Thailand to secure investments for developing new supply chains.
Zafrul highlighted Tesla’s choice of Malaysia, citing the country’s well-established ecosystem that has been built over the past five decades. Malaysia has also capitalised on its status as a semiconductor hub amid uncertain geopolitical conditions in the region. Zafrul acknowledged the need for opportunism and emphasised Malaysia’s neutral position and role in the critical supply chain. He noted that Malaysia has benefited from being a net contributor to the sector.
Malaysia currently caters to approximately 13% of global chip testing and packaging demand, and Zafrul estimated that it serves a quarter of the US chip-testing and assembly requirements. Companies in the semiconductor sector already provide services worth over RM200 million to Tesla.
Given Malaysia’s heavy reliance on trade and vulnerability to disruptions, particularly those involving China, the country is taking measures to address trade tensions stemming from the US’s efforts to restrict China’s access to crucial semiconductor technology and export controls.
Back in April 2021, Microsoft announced that they were building the first Azure data centre in Kuala Lumpur, while Google announced that they were going to launch cloud region here back in August 2022. Tech Wire Asia reports that Malaysia is one of the top destination for data centre investments in Southeast Asia.
