Analysts anticipate that Malaysia will become a major Asian hub for data centers, with supportive pro-business policies to attract and retain data center investors.
The unity administration led by Prime Minister Anwar Ibrahim is committed to advancing the use of digital technology in Malaysia, which is encouraging for the local data center sector, RHB Investment Bank Bhd said in a report.
According to the research house, the New Investment Policy, which the Ministry of International Trade and Industry (MITI) unveiled in October 2022 and which seeks to increase economic complexity to foster high-value job possibilities, further supports the sector’s positive outlook.
The report said that the country has a significant amount of skilled and experienced personnel, which bodes well for attracting more foreign direct investments, which are essential for the data center industry.
The Malaysia data center market is expected to grow at a CAGR of 9.41% during the 2022-2028 period, according to Arizton’s research. The Malaysia data center market will attract investments worth US$2.25 billion in 2028 while the colocation market revenue is tipped to hit US$450 million in the same year.
Moreover, according to RHB, with hyperscalers arriving, data center capacity plant-up in Malaysia is accelerating. Over the next five years, the country is expected to experience a wave of new and developing data center investments totaling more than 800MW in capacity, with cheaper land and energy costs serving as the main drivers.
