As of 2024, Malaysia’s data center market is valued at approximately USD 4.04 billion and is projected to reach USD 13.57 billion by 2030, growing at a robust CAGR of 22.38%, according to the Microsoft Malaysia organization. This growth is driven by the country’s strategic location, favorable energy costs, and increasing demand for digital infrastructure.
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Key Drivers of Data Center Market Growth in Malaysia
The data center market in Malaysia is experiencing rapid growth, driven by several key factors:
- Government Support and Policies
The Malaysian government has launched the MyDIGITAL initiative, aiming to attract approximately USD 15 billion for the digitalization of the country. In October 2024, the government approved the Data Centre Planning Guidelines (GPP), created by the Ministry of Housing and Local Government through PLANMalaysia, to standardize data center development in the country. These policies have expedited project approvals and attracted significant investments from global tech companies
- Strategic Location and Infrastructure
Johor, Malaysia’s largest data center hub, offers proximity to Singapore, a robust power grid, and a favorable climate for cooling systems. The state’s infrastructure supports large-scale data center operations, making it an attractive destination for global tech giants.
- Rising Demand from AI and Cloud Services
The rapid advancement of artificial intelligence (AI) and the increasing adoption of cloud services have significantly boosted demand for data centers. Companies like Microsoft, Google, and Amazon have committed substantial investments to establish data centers in Malaysia, driven by the need for scalable infrastructure to support AI workloads and cloud computing.
- Focus on Sustainability and Renewable Energy
Malaysia is focusing on sustainable development through the Malaysia Green Transition, aiming to decarbonize various sectors and promote renewable energy sources. Initiatives like the Energy Exchange Malaysia (Enegem) facilitate the cross-border trade of green electricity, aligning with global sustainability efforts and enhancing the appeal of Malaysia’s data center market to environmentally-conscious investors.
These factors collectively position Malaysia as a burgeoning hub for data center investments in Southeast Asia, attracting both local and international players to capitalize on the country’s strategic advantages.