Teo: Malaysia can become ‘Asian Digital Tiger’ amid strong data centre market growth
25 Oct 2023
Malaysia can become an “Asian Digital Tiger” following substantial investments and collaborations with esteemed organisations that will position the country as the next big data hub, said Deputy Communications and Digital Minister Teo Nie Ching.
Malaysia, she said, is fast becoming a regional data centre hub and an appealing investment destination as a result of increased digital infrastructure expenditures, including for cable landing stations, more underwater cables, 5G and improved fibre connectivity.
Citing a report by consultancy Knight Frank, Teo said Malaysia was the top investment destination for data centre investment in Southeast Asia last year with 113 megawatts (MW) of take-up, roughly four times as much as Indonesia and Thailand.
“As we look ahead, we have reasons to be optimistic,” she said, adding that Malaysia’s data centre market is projected to reach more than US$2 billion or RM9.57 billion by 2027, a testament to its rapid growth and potential to outpace the 47 per cent growth rate for all of Southeast Asia.
Speaking at the ground-breaking ceremony of the Infinaxis Data Centre here today, Teo said each RM1 billion in data centre investments could potentially create a RM400 million-RM500 million increase in Gross Domestic Product (GDP).
“The industry is also expected to create about 2,000 direct jobs by 2027 as well as indirect jobs in the local economy, and contribute to a spillover economic impact,” she said.
This, she said, will benefit the data centre ecosystem industries such as connectivity, energy, renewables, contract manufacturing and talent, as well as attracting more submarine cables to land in Malaysia.
As an example, she noted that Wiwynn, a Taiwanese contract manufacturer, has built a factory in Senai, Johor, to supply data centre equipment, creating 1,650 jobs.
“Digital economy is not just an industry but becoming an integral part of the nation’s economic landscape,“ she said, adding that the industry is projected to make up an impressive 24.4 per cent of Malaysia’s GDP this year against a backdrop of forecast economic growth of 4.2 per cent.
Meanwhile, Infinaxis chief executive officer Zahri Mirza said the data centre in Cyberjaya, which is equipped with 10 data halls, offers up to 80 kilowatts of power density per rack and delivers a 12 MW information technology load, is projected to be completed by the second quarter of 2025.
“The facility is readily suitable for hyper scalers, artificial intelligence services, cloud providers and larger enterprises,” he said.