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Malaysia: A Prime Destination for AI, Cloud, and Content Companies

June 1, 2024

Malaysia is fast emerging as a significant data center market in Asia, driven by its robust digital infrastructure, strategic location, and supportive government policies. With increasing investments in critical areas like Johor and Kuala Lumpur and tech giants launching new cloud regions, Malaysia is on course to become a central hub for data centers in Southeast Asia. 

A Growing Market 

The Southeast Asian market is witnessing a record entry of new players, with Malaysia standing out as a vibrant hotspot. The country’s data center market has been buzzing since 2022, following a series of investments in Johor. These were partly triggered by a prolonged moratorium for data center builds in Singapore and the relatively minimal opportunities for large wholesale builds. As such, the IT load capacity of the Malaysian data center market is projected to grow steadily and reach 1358 MW by 2029.  

 As a significant contributor to this growth, EdgeConneX announced plans to build highly proximate and high-power data centers in Malaysia to deliver 300 MWs combined capacity. Located in critical locations across Malaysia, the new EdgeConneX data centers in Kuala Lumpur’s Central Business District, Bukit Jalil, Cyberjaya, and Johor offer customers the ability to design highly customized configurations to meet any cloud and AI requirement. 

Kelvin Fong, EdgeConneX Managing Director, APAC, noted, “Our Malaysian data center footprint will contribute to the nation’s digital economy, vibrant tech ecosystem, and passion for progress, fostering increased innovation and collaborative partnerships. We look forward to continued and shared success in the region and supporting our customer’s capacity expansions into Malaysia.” 

According to a Research and Markets report, the market size for data centers in Malaysia is expected to reach $2.2 billion by 2028. This growth is attributed to Malaysia’s robust availability of space for data center development, including around 600 industrial estates with solid connectivity, making it one of the significant locations in Southeast Asia for such developments. The country’s green electricity tariff program and support from the Malaysian Investment & Development Authority are further driving the digitalization and growth of the data center market. 

Historically, enterprise colocation serving the financial services sector has been the mainstay of the Malaysian data center market. However, with tech giants recently launching new cloud regions, the colocation base is expected to continue expanding into other sectors. 

Power Self-Sufficiency  

One of Malaysia’s key advantages is its self-sufficiency in power generation. The government is promoting renewable energy to decrease dependence on fossil fuels. Malaysia’s Ministry of Energy and Natural Resources (KeTSA) has set a goal for 31% of the country’s total installed capacity to be derived from renewable sources such as hydropower, solar, wind, and biomass by 2025. The country even exports electricity to Singapore. This robust power supply ensures that data centers can operate without interruption, a crucial factor given their need for a controlled environment with 24/7/365 power. 

Emerging Regions: Kuala Lumpur, Bukit Jalil, Cyberjaya, Johor 

EdgeConnex data center destination in MalaysiaWhile Cyberjaya, an IT hub carved from former palm oil plantations, has traditionally been the epicenter of Malaysia’s data center market, other regions are also developing rapidly. Bukit Jalil and the country’s capital, Kuala Lumpur, are increasingly attractive for data center investment

  • Kuala Lumpur Central Business District (CBD): Kuala Lumpur is emerging as a critical submarket in central Malaysia for customers seeking geodiversity from Cyberjaya. The city’s rise is a testament to the growing demand for data centers and the success of government initiatives to promote digital infrastructure. Marked by an excellent central location, the EdgeConneX data center will be built within the downtown business district of Malaysia’s modern capital, Kuala Lumpur. Offering 19 MW IT Load capacity, this facility will provide customers with many opportunities for customized, built-to-suit configurations and highly proximate, low latency solutions to the capital city. 
  • Bukit Jalil: As a prosperous suburb of greater Kuala Lumpur, Bukit Jalil is home to several educational, technological, and medical institutions. With nearly 70 MWs IT Load capacity, this EdgeConneX site is a greenfield build in the MRANTI technology park, offering ample power to address hyperscale and large-scale cloud or AI deployments. 
  • Cyberjaya: Located in a region focused on research and development in knowledge-based industries, Cyberjaya is home to several high-tech science parks near Malaysia’s government seat. The EdgeConneX data center campus will have over 200 MWs of capacity and consist of nine buildings spread over 30 acres, providing the scalable capacity and power to meet a whole array of customer requirements in the future. 
  • Johor: An excellent destination for tech and cloud growth, Johor provides robust infrastructure, connectivity, and easy access to major markets in Southeast Asia. EdgeConneX presence includes 160MW IT load capacity located in a network-rich area. 

Renewable Energy: A Sustainable Future 

Malaysia relies heavily on fossil fuels for energy needs, with renewables only accounting for about 8% of the country’s installed capacity. However, in May 2023, the Ministry of Economy set an ambitious target to increase the renewable capacity share in the power mix to 70% by 2050. 

This commitment to renewable energy aligns with global sustainability trends and enhances Malaysia’s appeal as a sustainable data center development destination. Several renewable energy projects, including solar system installations, are already underway. 

The Road Ahead 

With its robust digital infrastructure, strategic location, and supportive government policies, Malaysia is well-positioned to capitalize on the growing demand for data centers. As the country continues to attract investment from AI, cloud, and content companies, its data center market is set to soar to new heights.