Malaysia’s Data Centre Sector Poised for Expansion, Set to Reach 500MW by 2025

In a testament to Malaysia’s growing prominence as a regional data centre hub, industry experts anticipate the country’s data centre sector to surge to 500MW by 2025, according to a report by JLL. This significant milestone underscores Malaysia’s strategic positioning in the global digital economy landscape, with Cyberjaya emerging as a pivotal location within Greater Kuala Lumpur for data centre development.

Cyberjaya’s ascent as a preferred destination for data centre investments reflects its robust infrastructure, conducive business environment, and strategic connectivity, making it an attractive choice for both local and international players. Meanwhile, Phase 2 of Sedenak Tech Park (STeP) in Johor is poised to anchor interest in the southern region, with further potential growth anticipated in Iskandar Puteri, positioning it as the state’s next data centre hotspot.

The Sarawak International Internet Gateway’s Phase one initiative, featuring the Batam-Sarawak Internet Cable System (BaSICS) and IRIS’s Tier IV data centre, is set to enhance internet access in Borneo and foster greater connectivity between Indonesia and Malaysia. Additionally, Tenaga Nasional Bhd’s (TNB) efforts to fast-track upgrading works at the Sedenak main intake substation (PMU) are expected to catalyze development within the expansive Sedenak Technology Park, with STeP emerging as a pivotal component in the nation’s data centre infrastructure.

Entrance and expansions fueling the supply growth pace

Malaysia is poised to double its data centre capacity to approximately 422MW by 2025, driven by ongoing projects and expansions across the country. The completion of projects such as Bridge Data Centres’ (BDC) phase one of a 100 MW hyperscale data centre at STeP underscores Malaysia’s commitment to meeting the escalating demand for data infrastructure.

Moreover, recent Memorandum of Understanding (MOU) signings between industry leaders like JL and Group Sdn Bhd (JLG) and Mitsui & Co (Malaysia) Sdn Bhd signify a collaborative effort to develop hyperscale data centres, further fueling the nation’s data centre supply growth.

MyDIGITAL initiative propels Malaysia as an emerging data hub

Launched in July 2022, the Malaysia Digital initiative represents a strategic framework aimed at accelerating the nation’s digital economy growth, succeeding the previous MSC Malaysia program. This initiative underscores Malaysia’s commitment to fostering innovation, digital transformation, and sustainable economic development.

Notably, investments in the information and communications sub-sector have surged, with MYR 60.7 billion (87.7%) of total approved investments recorded from January to September 2022 originating from five ICT services. Among these investments are significant data centre projects by industry leaders such as Bridge Data Centres Malaysia III Sdn Bhd, Byte Dance Sdn Bhd, and YTL Power International Bhd, underscoring Malaysia’s emergence as a key player in the global data centre market.

In summary, Malaysia’s data centre sector is poised for robust growth, driven by strategic initiatives, infrastructure investments, and collaborations between industry stakeholders. As the nation continues its journey towards digital transformation and economic diversification, the data centre sector will play a pivotal role in shaping Malaysia’s future as a dynamic, innovation-driven economy on the global stage.