The information and communication4 sub-sector led the surge of Malaysia’s services approved investments in 2025 with MYR 152.9 billion ($38.73 billion).

The Malaysian Investment Development Authority (MIDA) said in a statement on Friday that a lion’s share of this approvals is driven by digital investments in artificial intelligence (AI), big data, data centers and cloud computing.

It is noted that data centers are projected to contribute MYR 14.1 billion ($3.57 billion) to Malaysia’s economy in 2025, and their energy demands are accelerating Malaysia’s transition to renewable energy, driving the expansion of large-scale solar projects toward its goal of 70 percent renewable energy by 2050.

Cited UNCTAD, MIDA noted data centers accounted for more than one-fifth of all global greenfield project value in 2025, with investments exceeding ￥270 billion worldwide, driven by demand for artificial intelligence and expanding digital networks.

France, the United States, and South Korea were among the leading host countries, while Malaysia was identified alongside Brazil, India, and Thailand as an emerging destination attracting large-scale digital investments.

MIDA highlighted that Malaysia has moved on two fronts. Firstly the Data Center Task Force (DCTF), established since February 2025 as a joint platform between Ministry of Investment, Trade and Industry of Malaysia (MITI) and the Ministry of Digital, to streamline the industry’s trajectory to ensure Malaysia remains a competitive and investor friendly regional digital hub.

Secondly, the enhancements to the Digital Ecosystem Acceleration (DESAC) scheme, which have introduced rigorous sustainability benchmarks, including Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) metrics, while prioritizing local ecosystem development through greater participation of local vendors, the creation of high-value jobs, and closer collaboration with universities and technical institutes in information technology (IT) and engineering to support the digital industry.

Meanwhile, Malaysia’s manufacturing sector recorded MYR 131.3 billion ($33.26 billion) in approved investments in 2025 across 1,354 projects.

MIDA said the investment underscores Malaysia’s position as a competitive destination for high technology and advanced manufacturing activities.

The country’s focus on higher-value activities is also reflected in key industrial sub-sectors.

The electrical and electronics (E&E) industry remains a key driver, securing MYR 28.5 billion ($7.22 billion), and affirming its role in the global technology supply chain through AI and green technologies integration.

The chemicals and chemical products industry recorded MYR 24.9 billion ($6.31 billion) in investments, underscoring its importance to Malaysia’s advanced industrial ecosystem.

Meanwhile, Malaysia’s key industrial clusters continue to gain depth and momentum, evolving into strong, self-reinforcing ecosystems that attract quality investments.

Its Penang’s well-established E&E cluster secured 83 projects worth MYR 11.3 billion ($2.86 billion), with 78 percent driven by foreign investors.

This reflects sustained confidence in the state’s five-decade strength in electronics and its critical role in global technology supply chains.

The automotive cluster in Tanjong Malim also recorded six projects valued at MYR 3.6 billion ($910 million), including new investments in electric and hybrid vehicle manufacturing.

This reinforces Malaysia’s growing presence in next-generation mobility and clean transportation technologies.

Meanwhile, the southern petrochemical cluster spanning Pengerang, Tanjung Langsat and Pasir Gudang attracted nine projects worth MYR 7.5 billion ($1.9 billion), including Sustainable Aviation Fuel (SAF) production – positioning Malaysia in a niche expected to grow as aviation decarbonization pressures mount.

Malaysia steps up push into IC design, advanced packaging and other high-value technologies