Businesses in Malaysia are expected to witness a significant influx of approximately US$2.25 billion (RM10.2b) in investments directed towards local data centers by 2028.
The driving force behind this projected growth in the data center industry is attributed to the strategic policies and plans implemented by the government, according to local reports.
Among these efforts, the government is focused on establishing a smart grid and aims to raise the share of renewable energy in the total power mix to 31% by 2025, with a further target of 40% by 2035.
In June, Malaysia Digital Economy Corp. Sdn. Bhd. (MDEC) and the International Data Center Authority (IDCA) entered into a Memorandum of Understanding (MOU) to support and promote the growth of Malaysia’s digital economy. The goal is to establish Malaysia as a prominent global destination for digital investments and foster its position as a modern, green data center and cloud infrastructure hub. The collaboration aims to align with Malaysia’s objectives of reducing carbon emissions by 2023 and achieving net zero emissions by 2050.
To achieve these goals, the initiative includes the development of a nationwide Green Data Center and Digital Hub Blueprint. This blueprint aims to encourage innovation, prioritize safety and security, protect data sovereignty, minimize carbon emissions, generate high-paying jobs, and attract investments.
In January, Singapore & Malaysia signed agreements that focused on the digital economy and green economy. The two countries also inked a memorandum of understanding (MOU) that will enable them to cooperate on issues such as personal data protection as well as cybersecurity.
These initiatives are expected to play a pivotal role in fostering the continued expansion and development of the data center sector within the country.
Analysts also anticipate that Malaysia will become a major Asian hub for data centers, with supportive pro-business policies to attract and retain data center investors. Various data center players have announced their expansion in Malaysia to meet the overwhelming demand for data center space in the country.
AIMS Group announced the construction of AIMS Cyberjaya Block 2. Vantage Data Centers also announced a second data center campus (KUL2) with an additional US$3 billion (RM13.32b) investment in Cyberjaya. Additionally, an Australian data center operator NextDC is also planning phased development of new data centers in Kuala Lumpur to accelerate its expansion plans and to cater to growing demand for data center services across the Asia-Pacific region. In May, Princeton Digital Group (PDG), entered into a definitive agreement with JLand Group Sdn Bhd (JLG), Johor Corporation’s real estate and infrastructure arm, to build a 150 MW hyperscale campus in Sedenak Tech Park (STeP) in Johor. As for security, Acronis opened its first cyber cloud data center in Malaysia. The data center aims to provide a range of cyber protection solutions and manage data protection needs.
In April, MN Holdings Bhd announced its partnership with China’s Shanghai DC-Science Co Ltd to work together on building a high performance data center in Johor.
In March this year, Amazon Web Services (AWS) announced that it will be investing RM25.5 billion in Malaysia to develop its cloud services infrastructure in the country. Other leading data center providers in Malaysia include Bridge DC, TM One, NTT Communications, Strateq, Basis Bay, HDC and others.