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New Straits Times
27-06-2025
- Business
- New Straits Times
Malaysia holds strong as regional data centre investment hotspot
KUALA LUMPUR: Malaysia remains an attractive destination for data centre-related investments in the region, despite geopolitical risks and rising demands on energy and infrastructure capacity. JLL Malaysia Director of Data Centre Transactions Kent Seet Tiong Hong said this puts the country in a favourable position compared to many of its global peers, which are facing similar pressures amid tightening regulations and rising costs. He noted that Malaysia remains a very suitable location for building data centres, supported by several factors. According to him, factors such as being free from natural disasters, having a sufficient supply, and having lower energy and water costs compared to other countries are key attractions for data centre development. Furthermore, he said, in terms of the political situation, Malaysia has a stable government, and government agencies are also actively promoting data centres. "Another advantage is our workforce. Our workforce is proficient in English compared to other countries," he said at the sidelines of the Bursa Malaysia–HLIB Stratum Focus Series, themed "Data Centre 2.0: The Ecosystem and What's Next for Malaysia?" held recently. In his presentation, Seet highlighted that Malaysia's data centre capacity is projected to expand significantly, growing more than threefold based on current projections. He said that as of the first quarter of 2025 (1Q25), the country has completed an estimated 522 megawatts (MW) of capacity, with 1,250 MW under construction and over 3,750 MW in the pipeline. He also pointed out that Malaysia's completed capacity of 522 MW places it ahead of key Southeast Asian peers such as Indonesia (270 MW) and Thailand (140 MW), although it remains behind Singapore, which has 1,000 MW. He noted that in Greater Kuala Lumpur, key data centre locations include Cyberjaya, Bukit Jalil, Kuala Lumpur City Centre, Petaling Jaya, Sungai Buloh and Puncak Alam. He said among them, Cyberjaya has the largest footprint, with 90 MW completed, 320 MW under construction, and 950 MW in the pipeline. However, Seet said land acquisition is beginning to slow down, largely due to the rising cost of land in prime locations. He added that constrained utilities and the lack of ready land in established data centre locations, driven by overwhelming demand, have led to the flow of data centre investments into new industrial areas such as Sungai Buloh, Puncak Alam, Kulai, Ulu Tiram and Iskandar Puteri. Commenting on the impact of the revised electricity tariff set to take effect from July 1, 2025, to Dec 31, 2027, Seet believes it will not dampen investment interest in data centres in the country. In fact, he said the adjustment could help curb speculative activity by ensuring that only serious and committed players remain in the market. However, he acknowledged that operational costs will rise, as electricity tariffs make up a significant portion of data centre expenses. "To what extent it will impact them (data centres), I think it is still manageable. "I believe it will not reduce investments coming into Malaysia. If anything, it will curb speculators, which is a positive development. "Hence, only quality players will continue to grow," he said.
New Straits Times
26-06-2025
- Business
- New Straits Times
Digital investments exceed target
KUALA LUMPUR: Malaysia has attracted RM310.7 billion in digital investments from 2021 to March 2025, more than double the national target of RM130 billion, cementing its position as a fast-emerging digital infrastructure hub in Asia Pacific. According to Malaysian Investment Development Authority (MIDA) chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid, these investments have generated over 92,000 jobs, particularly in high-demand fields such as cloud engineering, artificial intelligence (AI) and cybersecurity. The influx of capital was facilitated through the Digital Investment Office (DIO), a strategic collaboration between MIDA and the Malaysia Digital Economy Corporation (MDEC). Speaking at the Bursa Malaysia-Hong Leong Investment Bank Bhd (HLIB) Stratum Focus Series titled "Data Centre 2.0: The Ecosystem and What's Next for Malaysia?', Sikh Shamsul said Malaysia is now leading a new wave of next-generation digital infrastructure development. The sector is evolving beyond traditional co-location services toward generative AI, quantum computing, and large-scale automation. The shift to Data Centre 2.0 reflects Malaysia's growing maturity in digital infrastructure, he said. "Recent global shifts, such as the United States (US) Department of Commerce's recalibration on AI division rules, signal a deeper understanding that digital leadership cannot be siloed or reactive. It must be strategic, collaborative and bold. "For Malaysia, this is a call to action. We must continue to lead with agility, vision and policy for data centre development," he said. In the first quarter of 2025, Malaysia approved RM89.8 billion in digital investments, marking a 3.7 per cent year-on-year increase. Of that, RM35.1 billion was directed into the information and communication technology sub-sector, underscoring continued investor confidence in the local digital economy. Menawhile, HLIB chief executive officer Lee Jim Leng said Malaysia must reinforce its position as a neutral, stable, and indispensable hub for data and AI development to remain competitive in the rapidly evolving digital economy. Lee said this goal demands bold, future-ready policies that not only catalyse homegrown AI innovation and uphold data sovereignty but also accelerate the development of energy-efficient, sustainable data centre infrastructure, critical components of any advanced digital ecosystem. He added that deeper collaboration between the government, industry players and academia will be crucial to ensuring Malaysia builds long-term competitiveness in high-performance digital infrastructure. "Malaysia is entering the era of Data Centre 2.0, a phase where the focus moves beyond basic co-location services to advanced, high-performance computing infrastructure that supports AI workloads, green innovation, and data sovereignty. "With RM6.7 billion in approved investments and another RM3.9 billion currently in advanced hyperscale discussions, Malaysia is no longer a peripheral player in the region. "Malaysia should now be positioning itself as a key digital infrastructure hub," she added. Lee noted that the global AI revolution is transforming every industry, and data centres are the backbone of this new digital era. However, she cautioned that this transformation is unfolding amid growing geopolitical tensions, particularly the recent US restrictions on exports of advanced AI chips, which have sent shockwaves through the global technology supply chain. "While Malaysia is not a direct target of these restrictions, we remain a vital node in an interconnected global economy. Any disruption to the supply of high-performance chips from giants like NVIDIA and AMD will directly affect the cloud providers, hyperscalers, and enterprises that are powering our digital future," she said. Despite these global challenges, Lee believes Malaysia has a real opportunity to solidify its position. She said this shift is backed by data reflecting rising investor confidence and market interest. She pointed out that MIDA had approved RM6.7 billion in data centre investments. While that figure is impressive, she said the additional RM3.9 billion currently under advanced discussion signals the massive opportunities still ahead. "This domestic boom is also further validated by our growing presence on the regional stage. According to global real estate services firm Jones Lang LaSalle (JLL), Malaysia now attracts 38 per cent of all new data centre investments across the Asean region. "Even more notably, JLL projects that our market share could surpass 40 per cent by next year. This isn't just growth. It marks a consolidation of our role as the destination of choice for digital infrastructure investment. "The momentum is clear, with RM2 billion worth of data centre construction contracts already awarded this year, proving that these multi-billion-ringgit commitments are moving quickly from blueprints to physical infrastructure," she said. Lee said global tech giants such as Google, Microsoft, and AWS are not only investing in Malaysia; they are doubling down, recognising the country's immense potential as a regional data powerhouse. She noted that demand for data centres continues to rise, fuelled by the rapid expansion of AI and cloud computing. Overall, Lee said the transition to Data Centre 2.0 presents both a challenge and an opportunity, but with the right strategies, Malaysia can turn global uncertainty into a national advantage and cement its leadership as Asean's digital infrastructure hub.
The Star
25-06-2025
- Business
- The Star
Moving up the DC value chain
KUALA LUMPUR: The data centre (DC) phenomenon globally has taken on a new course, moving from being mainly cloud DCs to being more artificial intelligence (AI) based for the future. And with that, the sentiment has gone from the idea of sheer expansion of the industry to how each country can shape what is coming next. Malaysia has proven itself as a successful and tantalising hub for DCs starting from the 2000s, and this was strongly accelerated during the Covid-19 pandemic. The Malaysian Investment Development Authority's (Mida) chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said the DC journey is no longer about chasing megawatts, lower latency or faster deployment, but rather about building a digital spine for the nation – one that is resilient, sustainable, inclusive and future ready. 'The world is undergoing a generational shift. Generative AI, quantum breakthroughs and large-scale automation are not theoretical futures, they are life-evolving systems. And DCs are at the heart of this transformation,' he said during Bursa Malaysia and Hong Leong Investment Bank Bhd's 19th edition of the Stratum Focus Series, themed 'Data Centre 2.0: The Ecosystem and What's Next for Malaysia' here yesterday. According to Sikh Shamsul, the global shifts have been evident enough that this should serve as a call to action for Malaysia. Within the country for the first quarter, he noted there were RM89.8bil approved investments. Of this, RM35.1bil went to the information and communications sub-sector, with over 93% flowing into DC projects. He added that from 2021 until March 2025, the Digital Investment Office (DIO) facilitated RM310.7bil in digital investments. The DIO is a joint initiative by both Mida and the Malaysia Digital Economy Corp. 'We have surpassed our national target of RM130bil well ahead of schedule. More than 92,000 new jobs have been catalysed, with many in frontier domains like cloud engineering, AI operations and cybersecurity,' he said. However, Sikh Shamsul said he acknowledged that many viewed DCs as power-hungry assets that yield limited local benefits, but this was not true. 'This perspective may not fully capture the broader and deeper value that DCs bring to the economy. Beyond direct employment, DCs support entire value chains, from civil engineering, and mechanical and engineering services to cloud application development and digital transformation for SME's,' he said. Sikh Shamsul also said to sustain momentum, the domestic ecosystem must be deepened, which is why Mida's Data Centre Nexus 2025 was vital for the industry. 'This initiative brought together eight global operators and 16 Malaysian vendors, unlocking commercial dialogues that are now progressing into tangible partnerships. 'We would like to see more Malaysian companies be potential vendors or suppliers to these hyperscalers or DC operators,' he added. Still, he cautioned that unchecked growth will carry risks such as greenhouse gas emissions. 'We must avoid the trap of scaling fast without scaling responsibly. This is why sustainability is not an afterthought, it is a strategic imperative in which the government has said it is committed to steering for the industry,' he noted. Meanwhile, JLL Malaysia Data Centre Transactions Lead director Kent Seet said the country was not short of advantages of why its location is suitably strategic for DCs, and will continue to draw more investments in the coming years. He said being natural disaster-free has been one of the top reasons why, citing that other countries within the region had not been so fortunate. 'We've had some clients that have pulled out halfway of constructing DCs in these countries because the risks are there. 'Malaysia also has ample water and power supply, and is still relatively cheaper compared to the developed and even regional countries,' he said. The workforce is another bonus, he said, whereby English is widely spoken. This is on top of the fact that most Malaysians speak many other languages, which is an added advantage. With talk about the upcoming electricity tariffs and how this might impact DC operators, Seet said he doesn't expect it to be huge for these companies, as they will definitely be reeling in profits. 'So, about the electricity tariff, I think they are going to implement it in the coming months. I don't know how big the impact is, but I would like to believe that the impact won't really reduce such investments coming to Malaysia. It's more of a way to filter out the speculation,' he explained. As for the next hotspots for DCs, Seet said areas outside of Greater KL could be the newer, more ideal locations. 'Negri Sembilan, I always say, is an up-and-coming location, mainly because the land it offers is more affordable. If we look at Cyberjaya and some locations in Johor, it is already three figures per sq ft. Then you look at Kuala Lumpur, and there is no land big enough to build a proper tech park,' he said. Sarawak is another state that has been mentioned a number of times in terms of being a viable location for DCs. Seet said he recently visited the state and spoke to some of the government agencies where he learnt that they were very positive about any such investments there. 'Going back to the fundamentals, DCs store data and they need connectivity. I think Sarawak has three or four cable landing stations compared to Peninsular Malaysia, where I think we have about nine. 'So, each cable landing station has several fibres connected to the rest of the world,' he explained. In essence, to make Sarawak a successful DC destination, there needs to be more cable landing stations. 'The state will also need to figure out who its customers are – it could be the government, the private sector or even tech companies. 'Perhaps, if its government can offer some contracts to DC operators, it could be a catalyst for the rest,' he said.
New Straits Times
25-06-2025
- Business
- New Straits Times
Data centre 2.0 transition key towards sustainable digital sector: MIDA
KUALA LUMPUR: Malaysia's shift towards Data Centre 2.0 is a crucial step in building a strong foundation for the country's digital sector growth, said Malaysian Investment Development Authority (MIDA) chief executive officer (CEO) Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid He said data centres are going through a generational shift, transitioning towards generative artificial intelligence (AI), quantum breakthroughs and large-scale automation. "Recent global shifts – such as the United States (US) Department of Commerce's recalibration on AI division rules – signal a deeper understanding that digital leadership cannot be siloed or reactive. It must be strategic, collaborative and bold. "For Malaysia, this is a call to action. We must continue to lead with agility, vision and policy for data centre development," he said in his keynote address at the Bursa Malaysia-Hong Leong Investment Bank Bhd (HLIB) Stratum Focus Series titled 'Data Centre 2.0: The Ecosystem and What's Next for Malaysia?', here today. Sikh Shamsul also said Malaysia's digital ecosystem recorded RM89.8 billion in total approved investments in the first quarter of this year, a 3.7 per cent increase year-on-year, with RM35.1 billion channelled into the information and communication sub-sector. "From 2021 to March this year, the Digital Investment Office (DIO), a joint initiative by MIDA and Malaysia Digital Economy Corporation (MDEC), has facilitated RM310.7 billion in digital investments. "We have surpassed our national target of RM130 billion, well ahead of schedule, and generated more than 92,000 new jobs, many in frontier domains like cloud engineering, AI operations and cybersecurity," he said. Meanwhile, HLIB group managing director and CEO Lee Jim Leng said the global AI revolution is transforming every industry, and data centres are the very backbone of this new era. However, she noted that the transformation is unfolding against a backdrop of geopolitical tension, especially with the recently imposed restrictions by the US on advanced AI chip exports, which have sent shockwaves through the global technology supply chain. "While Malaysia is not a direct target of these chip restrictions, we are a key node in a deeply interconnected global economy. But, against this global challenge lies Malaysia's defining moment and opportunities. "The transition to Data Centre 2.0 is both a test and a tremendous opportunity. By leveraging our strategic advantages, fostering innovation, and strengthening our partnerships, we will be able to navigate global uncertainties and firmly establish Malaysia as ASEAN's leading data centre hub," she said.
New Straits Times
25-06-2025
- Business
- New Straits Times
Malaysia must strengthen role as strategic AI, data hub, says HLIB
KUALA LUMPUR: Malaysia must reinforce its position as a neutral, stable, and indispensable hub for data and artificial intelligence (AI) development to remain competitive in the rapidly evolving digital economy, said Hong Leong Investment Bank Bhd (HLIB) chief executive officer Lee Jim Leng. Lee said this goal demands bold, future-ready policies that not only catalyse homegrown AI innovation and uphold data sovereignty, but also accelerate the development of energy-efficient, sustainable data centre infrastructure, critical components of any advanced digital ecosystem. Lee added that deeper collaboration between the government, industry players, and academia will be crucial to ensuring Malaysia builds long-term competitiveness in high-performance digital infrastructure. "Malaysia is entering the era of Data Centre 2.0, a phase where the focus moves beyond basic co-location services to advanced, high-performance computing infrastructure that supports AI workloads, green innovation, and data sovereignty. "With RM6.7 billion in approved investments and another RM3.9 billion currently in advanced hyperscale discussions, Malaysia is no longer a peripheral player in the region. "Malaysia should now be positioning itself as a key digital infrastructure hub," she said at the Bursa Malaysia–HLIB Stratum Focus Series, themed "Data Centre 2.0: The Ecosystem and What's Next for Malaysia?" held here today. Lee noted that the global AI revolution is transforming every industry, and data centres are the backbone of this new digital era. However, she cautioned that this transformation is unfolding amid growing geopolitical tensions, particularly the recent US restrictions on exports of advanced AI chips, which have sent shockwaves through the global technology supply chain. "While Malaysia is not a direct target of these restrictions, we remain a vital node in an interconnected global economy. "Any disruption to the supply of high-performance chips from giants like NVIDIA and AMD will directly affect the cloud providers, hyperscalers, and enterprises that are powering our digital future," she said. Despite these global challenges, Lee believes Malaysia has a real opportunity to solidify its position. She said this shift is backed by data reflecting rising investor confidence and market interest. She pointed out that the Malaysian Investment Development Authority (MIDA) has already approved RM6.7 billion in data centre investments. While that figure is impressive, she said the additional RM3.9 billion currently under advanced discussion signals the massive opportunities still ahead. "This domestic boom is also further validated by our growing presence on the regional stage. "According to global real estate services firm Jones Lang LaSalle (JLL), Malaysia now attracts 38 per cent of all new data centre investments across the Asean region. "Even more notably, JLL projects that our market share could surpass 40 per cent by next year. "This isn't just growth. It marks a consolidation of our role as the destination of choice for digital infrastructure investment. "The momentum is clear, with RM2 billion worth of data centre construction contracts already awarded this year, proving that these multi-billion-ringgit commitments are moving quickly from blueprints to physical infrastructure," she said. Furthermore, Lee said global tech giants such as Google, Microsoft, and AWS are not only investing in Malaysia — they are doubling down, recognising the country's immense potential as a regional data powerhouse. She noted that demand for data centres continues to rise, fuelled by the rapid expansion of AI and cloud computing. Overall, Lee said the transition to Data Centre 2.0 presents both a challenge and an opportunity, but with the right strategies, Malaysia can turn global uncertainty into a national advantage and cement its leadership as Asean's digital infrastructure hub.
