‘Nation to be key data centre player’
20 Jul 2024
Investments in Malaysia to continue beyond 2030, says PublicInvest
MALAYSIA is set to emerge as a pivotal Asian hub for data centre, driven by a projected influx of 1,400 megawatts (MW) of “IT load” by 2029, said Public Investment Bank Bhd (PublicInvest).
When it comes to Asian data centre hubs, Singapore, Japan, Taiwan and Hong Kong are the leading Tier 1 markets.
However, with the rising development costs and scarcer resources, PublicInvest said data centre operators, who often looked at business and customer proximity, political stability and infrastructure, began to scout for alternate markets.
“Tier 2 markets, like Malaysia, are showing growth potential due to favourable government support, abundance of resources (land, power and water) and advanced infrastructure.
“Coupled with its proximity to Singapore, a symbiotic relationship between Malaysia and Singapore is likely to turn Malaysia into the next epicentre of data centres in this region,” it said.
PublicInvest said the number of data centre investments in Malaysia could continue to expand beyond 2030.
It said this was because Tenaga
Nasional Bhd (TNB) has received applications for potential energy demand of 2,000MW from 10 data centres.
“Given the country’s position to capture the explosive growth in data centres, we see the key players in the telecommunication, power and construction sectors as the prime beneficiaries.”
Moving forward, PublicInvest expects more infrastructure development, such as power connectivity, Internet exchange points, cable landing stations and fiber-optic cables, to be laid to cater for the expanding information technology workloads.
It said Telekom Malaysia Bhd (TM) was seen as the prime beneficiary in the telecommunications space, and the thirst for energy should lead to a surge in demand for power from TNB.
“For exposure in the construction sector, we favour Gamuda Bhd and IJM Corp Bhd for their track records in securing data centre jobs,” it said, adding that it had “outperform” calls on TM with a RM8.80 target price, TNB (RM16 target price), Gamuda (RM9.20 target price) and IJM (RM4.20 target price).
Source: NST
