Why is Malaysia an IDEAL location for data centres?

The substantial space, energy, and water requirements of data centres make emerging markets, like Malaysia, with their affordable energy and land, an attractive option, particularly compared to smaller city-states like Hong Kong and Singapore, where resources are limited.

  • Lower costs
    Although Singapore has been a major data centre hub for years, the high cost of land and operations in Singapore causes many companies to turn to Malaysia as a more affordable alternative. For example, Johor is just across the border from Singapore and offers similar advantages at a fraction of the price.

  • Stable power supply and sustainability focus
    Malaysia's data centres benefit from a reliable and affordable energy infrastructure, which is essential for their high energy demands. Moreover, the country is at the forefront of sustainable data centre practices, with many facilities transitioning to renewable energy sources, supporting global initiatives to minimize the environmental footprint of digital infrastructure.

  • Government support
    The government has introduced tax incentives and grants to attract investment. The Malaysia Digital Economy Blueprint outlines the country’s goals to emerge as a digital economy leader by 2030, and data centres are at the heart of this transformation.

Johor Baru has emerged as South-east Asia's fastest-growing data centre market, according to DC Byte's 2024 Global Data Centre Index.

The city's total data centre capacity currently stands at 1.6 gigawatts, encompassing both existing and upcoming projects.

Data centre capacity is typically measured by the amount of electricity consumed and if all planned capacities in Asia come online, Malaysia will be ranked just behind Japan and India, with Japan and Singapore currently leading the region in live data centre capacity.

Who’s investing in data centres in Malaysia?

Amazon Web Services (AWS) [2]
Investment amount: RM29.22 billion (approximately US$6.2 billion)

  • The construction and operation of the new AWS Region is estimated to add approximately US$12.1b (MYR 57.3b) to Malaysia’s gross domestic product (GDP) and will support an average of more than 3,500 full-time equivalent jobs at external businesses annually through 2038. 

Google [3]
Investment amount: approximately US$2 billion

  • Its investments in Malaysia would create 26,500 jobs and contribute more than US$3 billion to its economy by 2030.

  • The investments are designed to provide high performing and reliability for cloud and AI services across the country.

  • Digital investments have helped propel Malaysia’s economy this year, with growth beating market expectations in the last two quarters and the ringgit currency becoming one of Asia’s top performers.

Microsoft [4]
Investment amount: RM10.37 billion (approximately US$2.2 billion)

Microsoft’s investment includes: 

  • building cloud and AI infrastructure in Malaysia 

  • creating AI skilling opportunities for an additional 200,000 people in Malaysia 

  • strengthening its partnership with the Government of Malaysia to establish a national AI Centre of Excellence and enhance the nation’s cybersecurity capabilities 

  • supporting the growth of Malaysia’s developer community

Oracle Corp [5]
Investment amount: approximately US$6.5 billion

  • The firm said the cloud region would help organisations in the country modernise their applications, migrate their workload to the cloud and innovate with data, analytics and artificial intelligence.