While Malaysia and Singapore are at the forefront of data center investments in ASEAN, Thailand is emerging as the next frontier as numerous hyper scalers and large content companies announced to build regional cloud presence in Thailand, Maybank Investment Bank said Wednesday.

The research house said in a note that while new capacities are fast ramping up, demand remains strong, as reflected in Singtel’s 25MW data center under construction in Thailand where 30 percent of the capacity has already been contracted, with an additional of about 50 percent in the contracting stage.

According to the note, US-based hyper scalers have announced investments of $8.5 billion, while Chinese cloud companies like Alibaba are also expending on infrastructure in the region.

TikTok also recently announced an investment of $8.8 billion in Thailand over the next 5 years.

“We believe it’s an all-inclusive investment, including servers/graphics processing units (GPU)s and manpower training etc, and as such data center capital expenditure (capex) will be a fraction of it,” Maybank said.

Cited independent research company SemiAnalysis, whom Maybank hosted last week for a data center webinar, it said Bytedance, Tiktok’s owner, has the most aggressive build-pipeline in Malaysia with a total lease commitment of 628MW by 2027, while Oracle, with 321MW in lease commitments, is also building for Bytedance.

SemiAnalysis said Oracle may see issues with its Malaysia investments given a 7 percent country cap as per US’ artificial intelligence (AI) diffusion framework on chip exports.

“As such, we see Thailand investments as a potential diversification strategy by Bytedance,” said Maybank.

Cited SemiAnalysis, it noted Bytedance is potentially using Nvidia’s H20 GPUs (specifically designed for China) for its ad engine, which is good at inferencing.

With Bytedance initiatives like OmniHuman (lifelike human videos from a single image), Maybank thinks compute requirement will be significant.

It also highlighted that ASEAN is one of Bytedance’s largest markets outside of China for both short videos and ecommerce.

Cited Cushman and Wakefield’s second half of 2024 report, Maybank noted that Bangkok (where most of Thai data centers are) has 105MW of data center capacity in operation, almost double the 57MW in the first half of 2024.

“Although this pale in comparison to Singapore and Johor at 278-1016MW, 232MW is planned/under construction in Thailand, which we think it can expand much further in light of the recent announcements,” the research house said.

In terms of the ease of building/operating data centers in Thailand, Maybank said that it is somewhere in the middle as the cost to build and power-reserve margins are favorable vs other ASEAN markets while power cost and water-stress levels are unfavorable.

Maybank estimates ASEAN data center growth at 20 percent revenue CAGR by 2028