Malaysia is becoming a hub for data centre investments due to the growth of cloud computing and the increasing demand for data centres. Malaysia is also positioning itself as a regional digital economy hub, and the government has launched the MyDIGITAL initiative to transform Malaysia into a digitally-driven, high-income nation by 2030. This initiative is timely and in line with the evolution of the global investment landscape towards digitalisation and Industry 4.0, creating opportunities for foreign investors in the digital sector.
Malaysia is already home to some 41 enterprise data centres, and growth is said to be driven by rapid hyperscale investments and strong co-location demands. The Malaysian Investment Development Authority (MIDA) is pursuing such investments with great success. Malaysia has one of the most developed data centre markets in Southeast Asia, with market analyst organisation Arizton estimating the value at 1.57 billion by 2027. Malaysia’s progress on the road to becoming a regional data centre hub is rapidly gaining momentum as the country has abundant land and power resources, good international connectivity, and a supportive government.
Some examples of data centre investments in Malaysia include:
- YTL Power International Berhad data centre
- Equinix’s $40M data centre investment
- Nippon Telegraph and Telephone Corp’s plan to invest over US$2.08bil (RM9.43bil) from 2021 to 2026
Malaysia’s MyDIGITAL initiative launched by the Malaysian Government aims to provide a blueprint for the country to accelerate the growth of digital products and services. MIDA and MDEC have facilitated RM66.5 billion in digital investments as of September 2022. The country’s digital economy represents a catalyst for the Malaysian economy, and data centres are integral in supporting digital ecosystems and their sustained growth. The Malaysia data centre market is expected to grow at a compound annual growth rate (CAGR) of nearly 10% during 2021–2026 accoriding to REUTERS.
Amazon Web Services (AWS) is planning to invest at least MYR 25.5 billion (USD $6 billion) in Malaysia by 2037 to launch an AWS infrastructure Region in Malaysia. The new AWS Region will give developers, startups, entrepreneurs, and enterprises, as well as government, education, and nonprofit organizations, greater choice for running their applications and serving end users from data centers located in Malaysia. The AWS Region will include three Availability Zones (AZs), each one physically independent of the others in the region yet far enough apart to minimize the risk that an AZ-level event will have on business continuity.
AWS plans to invest in Malaysia to meet the high demand for cloud services in Malaysia and across Southeast Asia. AWS’s investment and initiatives will provide Malaysia with cutting-edge technologies, which provides a competitive edge to local businesses, especially SMEs, and MNCs, helping them to grow. Many organizations in Malaysia are already making use of the existing AWS Regions. This includes enterprise and public sector organizations such as Axiata Group, Baba Products, Bank Islam Malaysia, Celcom Digi, PayNet, PETRONAS, Tenaga Nasional Berhad (TNB), Asia Pacific University of Technology & Innovation, Cybersecurity Malaysia, and more.
We believe that the AWS’s plans to invest approximately MYR 25.5 billion (USD6 billion) by 2037 to establish an AWS Region as a testament to their confidence in Malaysia’s promising digital economy and its capacity to drive long-term growth in this digital economy.
If you are a foreign entrepreneur and/or investor in the data centre or digital sector, Malaysia is a country worth considering. The country has a supportive government, abundant land and power resources, good international connectivity, and a growing data centre market.
The AWS project in Malaysia is a significant investment that will provide a boost to the country’s digital economy. It will create new employment opportunities in the expanding high-tech sector and encourage knowledge-transfer and shared experience in problem-solving, design, and development of data centres.