Building Resilience Through Localisation: Malaysia’s Next Chapter

Malaysia’s rise as a leading digital hub in Southeast Asia is powered by AI-driven demand and visionary national blueprints such as MyDIGITAL and the New Industrial Master Plan 2030 (NIMP 2030)¹. Between 2021 and mid-2025, MIDA approved RM144.4 billion in data centre and cloud computing investments², a strong signal of investor confidence and policy consistency.

Today, Malaysia is entering its next phase of growth: strengthening local capabilities to build a more resilient, sustainable, and value-added digital ecosystem. Localisation enables Malaysia to capture greater economic value, nurture local talent and innovation and reduce exposure to global supply chain disruptions.

By strengthening domestic manufacturing, services, and talent, Malaysia is building a supply chain that is faster, greener, and more resilient. This focus on localisation ensures that every ringgit invested in the digital economy translates into high-quality jobs, meaningful technology transfer, and sustainable industrial growth.

Through these efforts, Malaysia is not only advancing its digital transformation but also empowering local industries to compete and thrive within the global value chain. By strengthening domestic players, Malaysia is laying the foundation for a digital economy that deliver values to both investors and citizens, reinforcing the nation’s position as a dynamic hub for technology and innovation.

Three (3) pillars powering the transformation:

1. Stronger Domestic Capabilities

Malaysia is nurturing homegrown suppliers in critical areas such as precision cooling, power infrastructure, and engineering services, enabling local companies to integrate into global digital supply chains. These efforts enhance domestic competitiveness while allowing Malaysian companies to capture higher value within the data centre ecosystem.

2. SIntegrated Value Chains

MIDA is fostering closer collaboration between international data centre operators and Malaysian manufacturers and service providers. Through strategic partnerships, local companies gain access to advanced technologies, global best practices, and new business opportunities – strengthening local sourcing and research and development.

3. Skilled Talent and Sustainability

A highly skilled workforce underpins Malaysia’s digital ambitions. Through targeted training programmes and education initiatives, Malaysia is developing talent capable of meeting the evolving demands of the digital economy. In parallel, expanded access to renewable energy ensures that the country’s digital growth is sustainable and environmentally responsible. Together, these initiatives align Malaysia’s technological progress with its Net-Zero 2050 ambitions, fostering a future-ready ecosystem that balances economic growth, environmental stewardship, and human capital development.

At the core of this transformation is MIDA’s Digital Ecosystem Acceleration (DESAC) Scheme,³ introduced under Budget 2022 by the Malaysian Government. The scheme promotes quality investments and inclusive growth through:

• Attractive fiscal incentives, – including Investment Tax Allowances or Special Tax Rates;
• Local Vendor Development Programmes (LVDP), – encouraging global investors to partner with Malaysian suppliers;
• High-value job creation – to build a skilled, future-ready workforce; and
• Sustainability standards – that advance green technologies and Industry 4.0 practices.

Beyond policy, MIDA assumes an active role as an ecosystem builder, engaging directly with data centre operators, connecting them with local suppliers, and supporting technology transfer through platforms like the Data Centre Nexus 2025⁴ hosted by MIDA in May 2025.

Malaysia’s localisation journey is already producing success stories. Dunham-Bush Industries Sdn. Bhd., a Malaysian manufacturer of precision cooling systems, exemplifies how world-class solutions can be designed and built locally.

At MIDA’s “Keep Your DC Cool” seminar held on 1 October 2025⁵, industry leaders saw first-hand the potential of domestic innovation in meeting the demanding needs of global data centres. Similar partnerships are now expanding across sectors — from electrical equipment to engineering services, proving that Malaysian expertise can anchor a robust and competitive supply chain.

Malaysia’s data centre industry is entering a new era, one defined not just by investment figures, but by local strength, innovation, and resilience. Through strategic policies like DESAC and proactive collaboration between government, industry, and local enterprises, Malaysia is building an ecosystem that is globally connected yet proudly homegrown. In doing so, Malaysia is not only powering the region’s digital future but ensuring that the growth of tomorrow is secure, sustainable, and made in Malaysia.

[1] Howard, F. F. (2025, September). Data Centres, The Asia-Pacific Report. Knight Frank. Retrieved from https://content.knightfrank.com/research/3044/documents/en/data-centres-report-the-asia-pacific-report-september-2025-12408.pdf

[2] Bernama. (2025, October 1). MIDA, Dunham-Bush drive green cooling solutions for Malaysia’s data centre. Retrieved from https://www.bernama.com/en/news.php?id=2473607

[3] Malaysian Investment Development Authority (MIDA). (2024). Guidelines and Procedures for the Application of Digital Ecosystem Acceleration (DESAC) Scheme. Retrieved from https://www.mida.gov.my/wp-content/uploads/2024/12/DESAC-Guideline_MIDA.pdf

[4] Malaysian Investment Development Authority (MIDA). (2025). MIDA Powers Up Malaysia’s Digital Future at Data Centre Nexus. Retrieved from https://www.mida.gov.my/media-release/mida-powers-up-malaysias-digital-future-at-data-centre-nexus/

[5] Bernama. (2025, October 1). MIDA and Dunham-Bush drive Malaysia’s data centre value chain with sustainable cooling solutions. Retrieved from https://www.bernama.com/en/press/news.php?id=2473536