Malaysia is rapidly emerging as a prominent regional data centre hub and a highly attractive investment prospect due to escalated spending on digital infrastructure, encompassing cable landing stations, additional underwater cables, 5G implementation, and enhanced fibre connectivity.
JLL’s recently released Global Data Center Outlook highlights Selangor, Johor, Penang, Kedah, and Sarawak as the prevailing sought-after locations.
The surge in the data centre sector is primarily propelled by the increasing adoption of cloud computing and artificial intelligence (AI), as stated by JLL.
Earlier this year, Amazon Web Service (AWS) announced plans to launch an AWS data centre in Malaysia. AWS said they are planning to invest USD6 billion (approx. RM27.4 billion) in Malaysia by 2037.
From 2021 until March this year, data centre investments worth RM76 billion flowed into Malaysia, as highlighted by Investment, Trade and Industry Minister (MITI) Tengku Datuk Seri Zafrul Tengku Abdul Aziz, according to a report by The Star.
He said that the expansion Malaysia witnessed is truly significant, with numerous operational data centres now in operation within the country. He also added that the government’s aspiration extends beyond being a hub for both the ASEAN region and Asia as a whole.
He explained that the impetus behind this data centre boom could be attributed to government policies and incentives, particularly in areas such as renewable energy, land allocation, and the robust digital economy ecosystem.
The minister underscored the industry’s commitment to growth, exemplified by the power supply agreement between Tenaga Nasional Berhad and four data centre operators, facilitating a total supply capacity of 1,500 megawatts.
Tengku Zafrul also stressed the pivotal role of the digital economy in Malaysia’s economic landscape.
He noted that in 2021, the digital economy accounted for a significant 23.2% of the nation’s gross domestic product (GDP), equivalent to RM348 billion. He projected this contribution to escalate to 25.5% by 2025, surpassing RM382 billion.
Anticipating the future, he unveiled a promising forecast for the data centre market share in Malaysia. He projected an impressive average annual growth rate of 16%, amounting to USD2.08 billion (approx. RM9.36 billion) from 2021 to 2026.
