Malaysia’s Data Centre Expansion: Growth Zones and Economic Impacts

data center

In a pivotal moment for Malaysia’s tech infrastructure, the data centre sector is experiencing a significant surge, with Greater Kuala Lumpur and Johor emerging as frontrunners in this transformative wave. However, as demand escalates, other regions such as Negeri Sembilan and Kedah are poised to witness a rise in data centre developments, as highlighted by JLL Malaysia’s recent findings.

Unraveling Potential Growth Zones

Beyond the established strongholds of Greater Kuala Lumpur and Johor, the spotlight now shifts towards the untapped potential of Negeri Sembilan and Kedah as burgeoning data centre hotspots. According to Kent Seet from JLL Malaysia, these states boast the requisite resources and infrastructure to support robust data centre activities. As upgrades and new developments in mature locations face challenges, the overflow of demand from KL and Johor could catalyze growth in Negeri Sembilan and Kedah, positioning them as strategic destinations for future data centre initiatives.


Johor’s Ascendancy as a Data Centre Hub

With Johor poised as a key player in the data centre landscape, Seet underscores the pivotal role of state authorities in driving growth through streamlined processes and regulatory efficiency. Noteworthy locations such as the Sedenak Tech Park and emerging industrial hubs in Kulai, Skudai, Plentong, and Tanjung Kupang are earmarked for expansion, promising a thriving ecosystem for data centre innovation and development in the region.

Unlocking Eastern Johor’s Potential

While the west side of Johor dominates as a data centre nucleus, Tan Tze Ming from Malaysia Digital Economy Corporation (MDEC) sheds light on the untapped potential of the east side, particularly in Pasir Gudang. Abundant land, water, and power resources characterize this region, signaling immense growth prospects. Connectivity remains a key focus, with efforts underway to bridge the cable gap to eastern Singapore, fortifying the region’s position as a data centre frontier.

Strategic Connectivity Initiatives for National Progress

In a strategic move towards enhancing nationwide connectivity, MDEC is spearheading initiatives to establish submarine cable landing stations on both the western and eastern coasts of Johor. These endeavors aim to bolster connectivity for data centres in the region and pave the way for seamless data transmission. Furthermore, proposals for a new submarine connectivity route off the coasts of Sabah and Sarawak signify Malaysia’s commitment to equitable data centre expansion across regions.

Economic Implications and Growth Trajectories

As outlined in JLL Malaysia’s comprehensive report, Malaysia’s data centre market is on a trajectory of unprecedented growth, catalyzed by the surge in cloud computing, artificial intelligence, and digital services. The country’s expanding social media penetration rate and projected power capacity enhancements underscore the immense potential for further industry evolution and economic impact. With a forecasted surge in power capacity supply and ongoing projects shaping the sector, Malaysia stands at the brink of a data-driven revolution that will redefine its economic landscape for years to come.

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