Malaysia Remains Attractive For Data Centre, 2025 Is The Execution Year
KUALA LUMPUR, March 25 (Bernama) -- Malaysia’s investments in data centres have shown no signs of delays and the country remains in an attractive spot due to its proximity to Singapore, itself a major data centre hub with a relatively low-cost base, said Public Investment Bank Bhd (PIVB).
In a note Tuesday, the investment bank said 2025 is the execution year for Malaysia’s data centre projects despite numerous concerns over the United States (US) AI chip export curb, US chip tariffs, and the emergence of China’s AI start-up DeepSeek’s open-sourced R1 model.
It said the surging demand for hyperscale data centres is fuelled mainly by growing artificial intelligence (AI) adoption technologies, including machine learning, deep learning, natural language processing and large language models.
"Training AI models and large-scale data processing require huge computational power, which increases energy consumption. To meet the growing demand, tech companies are deploying thousands of chips in clusters, driving a surge for specialised data centres.
"Malaysia’s land and fibre connectivity, coupled with a higher power reserve margin of 28 per cent to 36 per cent make it an ideal location for these large-scale facilities," it said.
According to PIVB, 2025 is the year of execution following a series of committed investments by the global cloud providers, namely, Google, Microsoft, ByteDance, Amazon Web Services, and Oracle with a pipeline of new data centre projects totalling 1,313 megawatts (MWs).
"Hence, we believe there will be active open tenders in the near term for various job scopes ranging from data centre designs, power cabling, power installation, liquid cooling, clean room, uninterruptible power systems, backup power, building automation, server cabinets to security systems," it added.
In the meantime, PIVB said Malaysia’s technology sector came under heavy selling pressure recently, rattled by concerns over a potential US recession and other uncertainties such as tariff threats, sustainability of the spending budgets for AI data centre projects, China’s rising AI threat, and US’s AI chip export curbs.
Following US requests, Malaysia plans to tighten controls over Nvidia’s advanced chip flows.
"At this junction, the technology valuation looks appealing. However, Malaysian tech companies’ earnings visibility remains weak in view of a challenging operating environment caused by external factors.
"On the ground, we gather that customers are mostly placing short-term orders as back-end clients remain cautious about spending despite a robust front-end semiconductor orders," it said. It has an “Overweight” call on the sector.
-- BERNAMA
