Global real estate and proptech giant Juwai IQI has foreseen Malaysia to take lead in data center.

The firm said in a statement that in the third quarter of 2024, Malaysia is the fastest-growing data center market in the industry’s fastest-growing region.

“Malaysia is transforming itself from an also-ran to a top contender in data centers so quickly that they are calling Malaysia ‘a data center powerhouse,

“If all the region’s planned new data centers 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,” said Juwai IQI Co-Founder and Group Chief Executive Officer Kashif Ansari.

According to him, the Malaysian data center market will continue to grow rapidly throughout the rest of the decade.

With more than 3 gigawatt (GW) (3,000 megawatt[MW]) under way or in planning, 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 centers,

“Investments in power infrastructure and renewable energy sources will be crucial to address this challenge,” he noted.

Additionally, he said it would pay to develop more submarine cable networks to improve connectivity between Malaysia and the rest of the world.

For working-age Malaysians, he said growth in the data center industry is great news.

He noted the industry requires many skilled workers and provides the opportunity to learn new skills and earn higher salaries.

“As a country, we need to invest in education and training so that our people have the skills they need for this well-paid work,

“Given sufficient power and a capable workforce, the outlook for Malaysia’s data center market is brighter than in any other Southeast Asian country,” he added.

According to him, all the data centers in Malaysia together have the power to keep 280 MW of computers running all the time.

Other data centers are already under construction, about to start construction, or in the planning stages, he noted.

In total, he said the live capacity and the under construction and planned capacity equals 3,221 MW.

According to him, key players in the Malaysian data center market include NTT Global Data Centres, AWS, Microsoft, Google, and local firms such as TIME dotCom and Bridge Data Centres.

“Early stage planned construction of new data centers is almost entirely focused on Greater Kuala Lumpur and Johor,

“About 55 percent of new projects are planned for the Kuala Lumpur area, and the other 45 percent will go into Johor,” he noted.

According to him, 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 the region, he said.

He also said Johor is the fastest growing market in Southeast Asia, driven by spillover demand from Singapore.

Besides proximity to the city state, he said key factors contributing to Johor’s emergence include the amply available land and reliable power supply.

He also highlighted that Malaysia is Southeast Asia’s most rapidly growing data center market, because of the country’s strategic location, favorable government policies, proximity to Singapore, and attractively priced land, power, and water are behind this growth.

“In Malaysia, the data center market development pipeline consists of 1.2 GW, which represents 600 percent growth over the next five years,” he said.

He noted that major cloud service providers such as Amazon Web Services (AWS), Microsoft, Nvidia, and Google have recognized Malaysia’s attractive market, and have committed to making significant investments here.

Malaysia’s robust economic performance has also helped boost demand in the data center industry, he added.

According to him, the country’s gross domestic product (GDP) growth rate has been consistently high by global standards.

“At the same time, the country has transformed its economy from a dependency on raw material exports into a diversified economy with a large services sector,

“Services now make up more than half of GDP,” he explained.

Along with the strong economy, he said the Malaysian data center market also benefits from government policy support.

He noted the government has offered tax incentives, grants, and regulatory support to attract data center investments.

“The Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation (MDEC) have together established a single point of governmental contact for investors to facilitate digital investments,

“They have also created the Green Lane Pathway to enable new data centers to obtain power in as little as 12 months,” he added.

He also said another manifestation of far-sighted government is the existence in Malaysia of a highly developed telecommunications infrastructure, and this ensures high-speed internet connectivity and low latency, both essential for data center operations.

“Data centers deserve government support because they generate significant employment. There is direct employment in the data centers themselves, as well as a large number of external staff and employees at customers and suppliers,

“The construction of data centers is also labor-intensive. A single hyperscale data center can even take more than five years to build and have more than 1,000 employees on-site every day,” he noted.

It is also noted that the global data center industry is growing quickly this year because of demand from artificial intelligence (AI), machine learning, e-commerce, and cloud computing.

Ansari said all four sectors are significant users of data center computational power, and their rapid growth has led to the expansion of hyperscale data centers.

“The largest example of these massive facilities is as big as Vatican City. That’s about the size of 75 football fields,

“By contrast, a typical medium-colocation data center is only about 10,000 m2 in size. That is equivalent to about two football fields,” he said.

He noted data centers use so much power that AI electricity consumption will likely account for half a percent of all global electricity consumption within two and a half years, and it will only keep growing.

“AI’s need for computational power is doubling roughly every 100 days,” he added.

According to him, the demand for power is so great that power availability has become a significant constraint on data center growth in every major market, from Singapore to Virginia.

“Developers are responding by building new data centers near existing power plants or by constructing new power plants alongside their new data center projects,” he added.

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