Digital Infrastructure – The Driving Force Behind Digital Transformation

Digital adoption has become a new normal with businesses and consumers increasingly ‘go digital’ and migrate most workloads online. The increased usage of network and virtual storage has led to a surge in demand for data centres and cloud services.

The Malaysian data centre market has witnessed significant investment recently with a presence of a total of 47 data centres. In fact, according to Arizton’s latest research report, the Malaysian data centre market is expected to reach USD1.57 billion by 2027, growing at a CAGR of 6.68% during the forecast period 2022-2027.

Data centre hotspots in Malaysia are predominantly in Selangor, or more specifically in Cyberjaya, with some in the fringes of Kuala Lumpur as well as Johor with Sedenak Tech Park (STeP), Nusajaya Tech Park and YTL Green Data Centre Park.

Given that the digital economy is among the engine of growth for Malaysia, the Government has introduced the Digital Ecosystem Acceleration (DESAC) scheme under Budget 2022 to strengthen the whole digital ecosystem of Malaysia. Through the DESAC scheme, Malaysia aims to attract quality digital infrastructure projects into the country which is the foundation of digitalisation that accelerates the development of the digital economy value chain.

Coordinative efforts between MIDA and MDEC through its Digital Investment Office (DIO) to assist businesses in their growth expansion in Malaysia spur investors’ confidence to invest in quality digital investments that embody high-quality, sustainability and technology.

As of September 2022, the approved digital-related investments through the National Committee on Investment (NCI) accounted for RM66.47 billion, a significant jump from the RM3.4 billion recorded in 2021, whereby the majority of projects comprise data centres and data hosting services.

Among the notable projects approved in 2022 was by YTL Power International Berhad, through its subsidiary, YTL Data Center Holdings Pte. Ltd. (YTL DC) and Sea Ltd. will develop the Sea Data Center, parent company of Shopee within the first phase of the 500MW YTL Green Data Center Park in Kulai, Johor. With Sea Group being the anchor tenant for YTL’s Data Center Green Park, the new three-storey green facility will help reduce its carbon footprint and meet sustainability goals.

Moving forward, in tandem with the advancement of technology and to address the digital divide among Malaysians, MIDA will continue to intensify efforts to attract quality digital investments while creating more value and opportunities for growth using data and Cloud-based technologies.

To learn more about digital investments, please contact the Business Services and Regional Operations Division, MIDA.