Malaysia is set to become the third largest market for data centres in Asia, trailing only Japan and India. This significant growth is driven by the country's strategic location, favourable government policies, and attractively priced land, power, and water, according to Juwai IQI co-founder and group chief executive officer, Kashif Ansari.
Strategic Location and Government Support
Malaysia is recognized as Southeast Asia's most rapidly growing data centre (DC) market. Its proximity to neighbouring Singapore, combined with competitively priced resources, makes it a prime and strategic location for data centre development. If all planned data centres in the region come online, Malaysia will ascend to the third-largest market in Asia, generating tens of thousands of skilled local jobs.
"Data centres merit government push in support due to their substantial employment opportunities for Malaysians. They create direct jobs within the centres and also employ a large number of external staff and employees from customers and suppliers," Ansari stated. He emphasized the labour-intensive nature of constructing data centres, with a single hyperscale data centre potentially taking more than five years to build and requiring over 1,000 employees on-site daily.
Significant Investments and Economic Boost
Malaysia's robust economic performance has attracted major cloud service providers such as Amazon Web Services (AWS), Microsoft, Nvidia, and Google. These companies recognize Malaysia's potential as a data centre hub, leading to substantial planned investments.
The development pipeline for Malaysia's data centre market comprises 1.2 gigawatts (GW), indicating a 600% growth over the next five years. Ansari noted that with over 3 GW either under development or in the planning stages, the market is projected to expand ninefold from its current capacity.
Regional Development Focus
The early-stage planned construction of new data centres is primarily focused on Greater Kuala Lumpur and Johor. An estimated 55% of new projects are slated for the KL area, while the remaining 45% will be developed in Johor.
Ansari highlighted that the Greater Kuala Lumpur region, encompassing Cyberjaya, offers a strategic location, robust infrastructure, and strong government support. Cyberjaya's plus points include competitively priced land, a constant power supply, and the presence of prominent cloud providers in the vicinity.
Johor, identified as the fastest-growing market in Southeast Asia, benefits from spillover demand from Singapore. Its proximity to the city-state, ample available land, and reliable power supply make it an attractive location for data centre development.
Future Prospects and Challenges
Looking forward, the Malaysian data centre market is poised for rapid growth throughout the rest of the decade. However, ensuring a reliable and sufficient power supply to support this expansion remains a key challenge. Ansari emphasized that investments in power infrastructure and renewable energy sources will be crucial to address this challenge. Additionally, developing more submarine cable networks to improve connectivity between Malaysia and the rest of the world will be beneficial.
Moving forward, Malaysia's data centre market is set to experience unparalleled growth, driven by strategic advantages and robust government support. As the country gears up to become a leading data centre hub in Asia, the potential for economic benefits and job creation is immense.
By: Kpost
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