KUALA LUMPUR: Malaysia is expected to be the third largest market for data centres (DC) behind Japan and India due to significant growth in the market, said Juwai IQI co-founder and group chief executive officer Kashif Ansari.
He said Malaysia is Southeast Asia's most rapidly growing DC market due to the country's strategic location, favourable government policies, proximity to Singapore, and attractively priced land, power, and water.
"If all the region's planned new DC come online, Malaysia will be Asia's third biggest market, behind only Japan and India. That will create tens of thousands of skilled local jobs," he said in a report.
In Malaysia, the DC market development pipeline consists of 1.2 gigawatts (GW), which represents 600 per cent growth over the next five years.
Major cloud service providers such as Amazon Web Services (AWS), Microsoft, Nvidia, and Google have recognised Malaysia's attractiveness as a DC market, with significant investments planned here.
Ansari said Malaysia's robust economic performance has also helped boost demand in the data centre industry.
Along with the strong economy, he said the Malaysian data centre market also benefits from government policy support.
"Data centres deserve government support because they generate significant employment. There is direct employment in the data centres themselves, as well as a large number of external staff and employees at customers and suppliers," Ansari said.
"The construction of data centres is also labour-intensive. A single hyperscale data centre can even take more than five years to build and have more than 1,000 employees on-site every day," he said. Ansari said early stage planned construction of new data centres is almost entirely focused on Greater Kuala Lumpur and Johor.
He said about 55 per cent of new projects are planned for the KL area, and the other 45 per cent will go into Johor.
"The Greater Kuala Lumpur region, which includes Cyberjaya, has a strategic location, robust infrastructure, and government support. Some benefits of Cyberjaya are its competitively priced land and stable power supply, as well as the presence of major cloud providers in theregion," Ansari said.
"Johor is the fastest growing market in Southeast Asia, driven by spillover demand from Singapore. Besides proximity to the city state, key factors contributing to Johor's emergence include the ample available land and reliable power supply," he said.
Moving forward, Ansari said the Malaysian data centre market will continue to grow rapidly throughout the rest of the decade.
With more than 3 GW (3,000 megawatts) under way or in planning, a pipeline of 1.2 GW underway, he said the market is expected to grow by a factor of nine from its current capacity.
"One of the key challenges will be ensuring a reliable and sufficient power supply to support the rapid growth of data centres. Investments in power infrastructure and renewable energy sources will be crucial to address this challenge. Additionally, it would pay to develop more submarine cable networks to improve connectivity between Malaysia and the rest of the world," he added. Ends