Malaysia is on track to achieve its ambitious goal of generating RM3.6 billion in revenue from the data centre industry by 2025, according to Deputy Communications Minister Teo Nie Ching. This target, set against a backdrop of RM2.09 billion in revenue in 2022, is bolstered by a series of substantial investments and expansions by both new and existing players in the country’s data centre sector.
Strong Growth in Data Centre Investments
Speaking at the CloudTech and Data Centre Conference 2024, Teo highlighted the positive momentum in the industry, citing various recent developments. “We can see that more people from the data centre industry are coming in for digital economy investment, and many data centre players who are already here are also expanding their operations,” she said.
Among the notable investors is GDS IDC Services (M) Sdn Bhd, which has expressed intentions to double its investment in Malaysia, reflecting growing confidence in the country’s digital infrastructure. Such expansions indicate that Malaysia is not only attracting new players but also nurturing existing ones, further solidifying its position as a key data centre hub in the region.
Building a Robust Ecosystem
Teo emphasized that creating a robust ecosystem for data centres and cloud services is crucial for Malaysia’s long-term success in the digital economy. “When we have a sufficient number of data centre players in Malaysia, their suppliers would also be interested in coming to Malaysia,” she noted. This, in turn, is expected to create more high-value jobs for Malaysians and position the country as a leader in ASEAN’s digital economy.
The expansion of the data centre industry in Malaysia is anticipated to bring significant economic benefits, including the creation of thousands of specialized job opportunities. As of now, the industry has already seen the approval of RM114.7 billion in investments between 2021 and 2023, generating over 2,325 high-value jobs.
Confidence from Global Tech Giants
Malaysia’s data centre sector has attracted substantial investments from global tech giants such as Google, Amazon Web Services, ByteDance Systems, and Bridge Data Centres. These companies have chosen Malaysia as a strategic location for their data centre operations, demonstrating confidence in the country’s potential to support large-scale digital infrastructure.
Furthermore, RM76 billion worth of data centre-related investments were approved by the Investment, Trade, and Industry Ministry through the Malaysian Investment Development Authority (MIDA) from 2021 to March 2024. These investments underscore the strategic importance of Malaysia in the global data centre market and its growing appeal as a destination for high-tech investments.
Conclusion
Malaysia’s efforts to bolster its data centre industry are clearly paying off, with the country well on its way to achieving its RM3.6 billion revenue target by 2025. The combination of strategic investments, government support, and an expanding ecosystem of suppliers is creating a fertile environment for growth in the digital economy.
As Malaysia continues to attract and retain global tech giants and their substantial investments, the country is poised to strengthen its position as a leading hub for data centres in Southeast Asia. This growth not only contributes to the nation’s economic development but also enhances its reputation as a key player in the region’s digital transformation.
