Economic Impact of Data Centres to the Malaysian Economy

Theeconomicimpact
ofdatacentrestothe
Malaysianeconomy
KPMG report commissioned by Asia-
Pacific Data Centre Association (APDCA)
July 2025

1
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01 Executive summary 5
02 Context: Data centres in Malaysia 11
03 Policy landscape 17
04 Economic impacts 23
05 Enabling the value chain 29
06 Appendices 35
Appendix 1: International Benchmarking 36
Appendix 2: Enabled impact case studies 40
Appendix 3: Methodology 44
Appendix 4: Sources 50
Contents

3
Glossary
A glossary of terms used throughout the report is included below.
$M (USD) – Millions of US dollars
$Bn (USD) – Billions of US dollars
AI – Artificial Intelligence
APAC – APAC
APDCA – APAC Data Centre Association
ASN – Autonomous System Number
ATC– Air Traffic Control
CAPEX – Capital Expenditure
CAGR – Compound Annual Growth Rate
DC – Data centre
ESG – Environmental, Social, and Governance
FDI – Foreign Direct Investment
FTE – Full-Time Equivalent
FX – Foreign Exchange
GDP – Gross Domestic Product
GVA – Gross Value Added
GW – Gigawatt
HCAC – Hot/Cold Aisle Containment
IBX – Internet Business Exchange
ICT – Information and Communication Technology
IoT – Internet of Things
kW – Kilowatt
LED – Light Emitting Diode
MDEC – Malaysia Digital Economy Corporation
MEP – Manufacturing Extension Partnership
MNC – Multinational Corporation
MW – Megawatt
OECD – Organisation for Economic Cooperation and Development
OPEX – Operating Expenditure
PPA – Purchase Power Agreement
PUE – Power Usage Efficiency
R&D – Research and Development
SDG – UN Sustainable Development Goal
SME – Small and Medium-Sized Enterprise
sq.ft – Square Feet
UN – United Nations
USB – Universal Serial Bus
WUE – Water Usage Efficiency
YoY – Year-on-Year

4
Aboutthisreport
Key sources for the report
The overall context for this report and key sources are summarised below.
Overview of investment
drivers, policy enablers and
peer benchmarking.
High-level scope
Information sources including:
▪ Industry data: Expert consultations, Department of Statistics
Malaysia, Cushman & Wakefield Data Centre Update reports,
Knight Frank data centre forecasts and CBRE data centre
investment reports.
Our collective knowledge of the sector,
enhanced with:
▪ Consultations with a range of data centre
stakeholders in Malaysia.
▪ Discussions with contributing members of the
APDCA.
Quantification of the
contribution data centres
make to the Malaysian
economy.
3
Articulation of the role data
centres play in supporting the
growth of the Malaysian
digital economy.
2
1
Highlighting the role of data
centres to critical
infrastructure and
sustainability.
4

6
Malaysia'sambitionsasadigital,AI-driveneconomy
Modern, digital economies that support high-paying onshore jobs are enabled by the physical
infrastructure of data centres – in effect, data centres are the engine rooms of the digital economy.
Data centres are fundamental to the wider information ecosystem and serve as core infrastructure for the digital economy: Without them, countries
have to rely on imported data centre services, raising sovereignty and latency challenges for their users (including banking, healthcare and transport). Those
with the energy and water capacity to expand their data centre industry can also become net exporters of data where use cases are less sensitive to these
concerns (such as AI Training facilities) – thereby also gaining long-term benefits over time for its national tax strategy, with onshore data activity protecting
substance based exclusions under BEPS 2.0.[a]
Data centres are not an end goal in themselves – they are the physical clustering of computing power that enables digitalisation and the related efficiencies that power
modern economies and improved quality of life.
Executive Summary
Data centres are critical enablers of high-paying onshore jobs: Data centre clusters are vital for attracting tech FDI and driving digitalisation. They support
indigenous cloud-native and AI-native start-ups, while also helping traditional sectors like healthcare, financial services, and education modernise.
Data centres are drivers of national living standards: By powering digital services – from smart cities and healthcare to education and sustainability, from e-
commerce to improving road and air traffic control safety – data centres enhance national quality of life. They enable more efficient public services, rural access to
information, and innovations that improve living standards.
2
3
Data centre
enabled activities include:
Sovereign AI Accessible
e-Commerce
Streamlined
public
services
Accessible
financial
services
Scalable
cloud
computing
Connected,
smart cities
Sources: [a] Base Erosion and Profit Shifting (BEPS) 2.0 Initiative KPMG Malaysia
1

7
Malaysia’sdigitalvisionandstrategy
Vision
Malaysia’s digital vision is set out in the national initiative
MYDIGITAL – the Malaysian Digital Economy Blueprint –
which outlines the Government’s aspirations to transform the
country into a digitally-driven, high-income nation and a
regional leader in the digital economy.
MYDIGITAL is designed to complement national development
policies such as the ‘WKB 2030’, which identifies the digital
economy as a key economic growth area.
It provides the way forward to fully realise this potential in
achieving inclusive, responsible and sustainable
socioeconomic development. [a]
Strategy
Malaysia has identified six strategic thrusts as part of
MYDIGITAL to develop Malaysia’s digital economy: [a]
1. Drive digital transformation in the public sector
2. Boost economic competitiveness through digitalisation
3. Build enabling digital infrastructure (including data
centres and cloud infrastructure)
4. Build agile and competent digital talent
5. Create an inclusive digital society
6. Build a trusted, secure and ethical digital environment
Executive Summary
Data centres are essential to Malaysia’s digital ambitions – powering AI, cloud computing, and tech
innovation that drive national productivity and global competitiveness.
Sources: [a] Economic Planning Unit, Prime Minister’s Department

8
DatacentresasstrategicinfrastructureforMalaysia’sdigitaleconomy
As strategic digital infrastructure, data centres generate investment, support highly-skilled jobs, and
enable growth across Malaysia’s most dynamic sectors.
Executive Summary
Economic impacts: Malaysia’s ambition to lead in the digital economy depends on
critical infrastructure like data centres – not only for the significant number of jobs
created during construction and operations, but also for the productivity gains they
unlock across AI, cloud computing, and the broader technology ecosystem.
Enabling the digital economy: Data centres are fundamental to Malaysia’s digital
infrastructure – powering AI, fintech, cloud computing, online retail, and public services.
They make it possible for businesses, government and households to operate efficiently
and securely, and compete globally. They are a key determinant of competitiveness and
sovereignty.
High-value job creation: Data centres help create and retain highly-skilled roles [1] –
including network engineers, data specialists, cloud infrastructure specialists, and ICT
security professionals. These are skilled, high-paying jobs that contribute to Malaysia’s
transition to a knowledge-based economy and help reduce talent outflow.
Sustainability: Data centre operators are actively reducing environmental impact and
becoming increasingly resource efficient. Innovations include sourcing renewable
energy, deploying advanced water reuse and cooling systems, and recovering waste
heat – aligning with Malaysia’s green growth ambitions.
Return on resource use: While data centres require land, energy and water, the value
they generate is significant. By enabling productivity growth, digital transformation and
high-value job creation, their economic and societal contribution far exceeds their
resource footprint.
Strategic digital infrastructure
Like roads, ports, and the electricty grid, data centres have become
critical infrastructure. They are the foundation of a country’s
computing power. They support the functioning of digital services
across the public and private sectors, and enable economic activity,
public services and national competitiveness.
Strong economic contribution
Data centres contribute directly to economic activity and the
creation and retention of high-value jobs and exports – with
resource use that is being actively managed. Operators are
minimising environmental impact through energy efficient
design, and using renewable energy sources.
Policy support
Malaysia is one of the fastest growing hubs for data centres – with
current capacity of 505MW estimated to increase to 3.6GW by 2030.
Malaysia can build on this progress to strengthen the data centre
ecosystem in support of growing demand for digital services such as
cloud computing and AI. International examples show that clear,
sustainable policy can unlock investment, innovation, and long-term
economic value.
Note: [1] These are known as ‘Tier 3’ roles. They are highly-skilled and include roles like system architects, network engineers, server administrators, cloud infrastructure specialists, and platform engineers.

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Datacentresdeliverhigh-valuereturnstotheMalaysianeconomy
Data centres are strategic assets – they deliver significant returns by enabling industry growth,
supporting high-value jobs, and underpinning Malaysia’s digital economy.
Data centres in Malaysia rely on
resources such as:
• Land: with appropriate planning
permission, power and fibre
infrastructure
• Water: for cooling systems
• Energy: where possible from
sustainable sources
Skilled personnel are needed to
construct and operate data centres.
Based on current capacity, over 1,000
people are estimated to be employed in
operating data centres in Malaysia.
Financial investment is needed to
acquire land, construct the data centre
and support ongoing operating
expenditure.
Inputs
Data centres act as the digital
economy’s core infrastructure – storing,
processing and distributing data. Each
type of data centre serves a specific
purpose and supports different service
offerings. This can be simplified into three
types:
54 data centres of various types are
currently operational in Malaysia
Hyperscaler
Enterprise
Edge
Types of data centre
• $24bn in economic output per year from construction, equivalent to
$7.6bn in GVA
• $10.2bn annual economic output supported by the operation of data
centres – equivalent to $4.2bn in GVA
• ~30,900 total jobs supported each year through the operation of data
centres – contributing $1.3bn in annual wages
• ~4,300 high-value knowledge jobs supported each year (~14% of the
total)
Enabled impacts:
• Productivity growth & a competitive economy
• Digital service delivery – critical infrastructure for high growth fintech, AI,
e-commerce sectors and public services
• Facilitates exportable digital services
Data centres play an important role in enabling high-value, knowledge-
intensive employment, both in their own operations and across the wider
digital economy. These include roles in cloud engineering and software
development, many of which are created by datacentre customers and
ecosystem partners. Approximately 86% of supported jobs fall outside the
‘knowledge job’ definition, yet many require specialised expertise and offer
competitive wages. As of Q3 2024, there were more than 357,000 ‘digital
talents’ on LinkedIn in Malaysia, underscoring the country’s capacity to
support and scale a digitally skilled workforce that sustains innovation,
attracts investment, and drives productivity across the digital economy. [a][1]
Economic Impacts (2030)
Executive Summary
Sources: [a] MDEC – Digital Talent Snapshot in Malaysia, Q3 2024
Note: [1] The term ‘digital talent’ in the MDEC report is defined as talents currently employed and having an active LinkedIn profile.

10
Datacentresgenerateeconomicbenefitsthroughoutthevaluechain
Investment in data centre capacity is a catalyst for Malaysia’s digital economy – enabling high-value jobs
and innovation, while also delivering direct economic benefits through construction and operations.
Sources: [a] KPMG Impact Model
Note: [1] Gross Value Added (GVA) measures the value of goods and services produced minus the cost of inputs, whereas economic output reflects total turnover and includes intermediate consumption.
$24.0bn economic
output
• Equivalent to $7.6bn in GVA
• Supported during
construction in the baseline
scenario
Jobs supported
annually
~20,000
• 20,000 direct jobs supported
during construction
• With thousands more
sustained across the wider
supply chain
$10.2bn economic
output
• Equivalent to $4.2bn in GVA
• Supported by ongoing
operations of data centres –
not one-off investments
~31,000 jobs
supported
• $1.3bn in annual wages
• Attributable to ongoing
operations of data centres
Potential
economic output
Economic impacts supported by data centres in Malaysia (2030)
(USD $2024m, baseline scenario) [a][1]
Executive Summary
Estimated growth in total operational employment, 2024-2030
Baseline Scenario
In line with Malaysian Government definitions, a knowledge worker is defined as a
qualified person who holds a degree and has at least ten years’ experience working in
any of the qualified activities. It is estimated that 14% of the operational jobs supported
by data centres would qualify as knowledge jobs.
Operational jobs include IT system management, power and cooling maintenance, and
security. Construction jobs include site preparation, engineering, electrical and
mechanical installations. While the primary economic value of data centres lies in the
high-value digital economy jobs they enable, both the construction and operation phases
also deliver substantial job creation benefits in their own right.
1,000
3,300
2024 Employment
7,300
23,600
2030 Employment
4,300
(14%)
Knowledge Jobs
4,400
30,900 30,900
+26,600
Direct Indirect and induced

Context:data
centresinMalaysia
02

12
Malaysiandatacentrelandscapeoperationaloverview
Johor accounted for 79% (397MW) of Malaysia’s data centre capacity in 2024, with investor interest now
spreading across the country to regions in Northern Malaysia.
Malaysia’s data centre landscape in 2024
In 2024, a total of 54 operational data centres were located across
Malaysia, offering a total live IT capacity of 505MW.[a] Around 79%
(397MW) of the MW capacity across 12 data centres was in the
Johor region, followed by 20% (107MW) across 37 data centres in the
Klang Valley region. 5 data centres providing combined capacity of
1MW were in the Sarawak and Penang regions.
Distribution of data centres and MW capacity in Malaysia in 2024
Johor’s ample land, reliable power, government incentives and
proximity to export data to Singapore make it a prime location for large-
scale data centres in Malaysia. With a focus on AI-driven data centres
and sustainability, Johor is emerging as a digital hub in the APAC region,
attracting major operators and developers looking to establish capacities of
100MW and above.
Johor has established itself as a leading hyperscale, enterprise and built-to-suit hub, with a 1%
colocation vacancy rate – among the lowest in APAC.[b] Its strategic location in the Johor-Singapore
Special Economic Zone (JS-SEZ), robust infrastructure, and land availability position it as a regional
powerhouse.[c] This momentum helps to drive nationwide investment, with global tech firms committing
upwards of $2bn to develop data centres in regions such as Selangor in the Klang Valley and to build out
a comprehensive AI and cloud ecosystem across Malaysia. The increase in nationwide investments
reflects growing confidence in Malaysia’s digital infrastructure potential, enabling wider service offerings.
22%
69%
9%
Johor region Klang Valley region Other
79%
21%
0%
1). MW IT Capacity
2). No. of data centres
While Johor and Klang Valley lead in MW capacity, investor interest is rising
in Northern and Eastern Malaysia. Data centre developers are beginning to
establish large-scale data centre campuses in regions like Kedah,
underscoring the strategic importance of the North Kedah Special Economic
Zone in diversifying and expanding Malaysia’s digital infrastructure.
Penang (0.4MW)
Sarawak (0.6MW)
Johor (397MW)
Klang Valley (107MW)
Context: data centres in Malaysia
Kedah (0MW)
Negeri Sembilan (0MW)
Although Kuala Lumpur, located in the Klang Valley, reports a lower MW
capacity than emerging regions like Johor, its status as Malaysia’s capital
and primary economic centre reinforces its role as a prime base for cloud
infrastructure and a catalyst for the nation’s AI data centre ambitions.
Sources: [a] Knight Frank [b] Cushman & Wakefield [c] Malaysian Investment Development Authority (MIDA)

13
TheroleofdatacentresascorenationalinfrastructureinMalaysia
Data centres are essential infrastructure of a modern, digital economy – driving Malaysia’s national
growth and reinforcing its position as a first mover in AI.
Critical Infrastructure
Data centres represent core digital infrastructure and
strengthens Malaysia’s position as a strategic location
and key hub for AI and IT services:
Sector dependency: Data centres provide the
infrastructure that lies behind all digital aspects of
social and work life, including video calling,
messaging and apps, retail, banking, travel and
public services such as healthcare and welfare.
Enabling digital economies: Data centres host
critical software and data that allows world
leading companies to run their businesses,
organise supply chains, and pay staff.
Integration into wider society: Data centres are
not separate or optional infrastructure. They offer
benefits across the supply chain through increased
and well-paid employment, innovation, productivity
and increased economic activity.
Global Context [1]
Malaysia is emerging as a first mover in AI, supported by a rapidly expanding data centre market. With streamlined approvals, competitive costs, and strong infrastructure,
Malaysia offers an attractive environment for global tech players. Kuala Lumpur and Johor are set to drive Malaysia’s position as a global AI data centre hub, enhancing business
services, attracting tech start-ups, and boosting high-skilled employment. This growth will boost Malaysia’s digital economy and support broader economic development outside of the
immediate data centre ecosystem. As the backbone of AI and digital innovation, data centres will continue to provide critical infrastructure needed to power Malaysia’s
digital economy and enable growth across the wider economy. Owning and operating local AI infrastructure can give Malaysia greater control over data governance, national
security and provide opportunities to lead in fields like sustainable data centre design and renewable-powered AI infrastructure.
Malaysia hosts key clusters of data centres and technology
companies; the growth of the sector is part of a large-
scale global digital transformation. Data centres securely
store and manage the data which forms much of the world’s
information, commerce, and interpersonal connection.
• Traditionally data centre hubs emerge around large metro
economies, e.g. Beijing, Tokyo, Shanghai, Sydney,
Mumbai and Singapore. These markets account for over
half of APAC’s total capacity today. [a].
• As initial hubs face capacity challenges, similar to trends in
Europe and the Americas, new markets emerge that serve
local demand and provide a net export of high-value
services back into those initial hubs – Johor is an example
of this.
Malaysia more generally has the opportunity to emerge as a
strong international hub, supported by a positive policy
environment.
Data centres
Sources: [a] Cushman & Wakefield
Note: [1] International benchmarking exercises can be found in Appendix 1: International Benchmarking.

14
InvestmentintheMalaysiandatacentreecosystem
Malaysia has attracted growing interest from data centre investors, owing to factors such as strong
regional connectivity and a growing digital economy.
Increased investor interest in data centres (Southeast Asia)[a][1]
% growth in MW capacity from 2023 to 2026
185%
124% 112%
87%
36% 36%
14%
Malaysia Indonesia Thailand Vietnam Australia Japan Singapore
Average land purchase costs in APAC (2025)[c][1]
Values are in $m per square metre (SQM)
10,981
4,480
1,289
1,036
805
524
South Korea
Japan
Singapore
Australia
New Zealand
Malaysia
Land availability and lower land
purchase costs position Malaysia as a
viable location in the APAC region for data
centre developers. In 2024, Malaysia
attracted $34 billion of investment from
major cloud providers and developers.
Malaysia is set to lead Southeast Asia in data centre investment growth – which is
projected to rise 185% from 2023 to 2025. This will be driven by its expanding digital
economy, land availability and regional connectivity. Continued AI investment is
essential to sustaining this momentum, supporting economic growth, competitiveness,
and resilience. Without it, Malaysia risks stagnation in key sectors such as healthcare,
manufacturing, and agriculture, a widening skills gap, and missing out on over $100
billion in potential GDP gains due to reduced productivity and innovation.
Malaysia has emerged as a hub for providers looking to expand their services and to
meet the rising demand for AI data centres since ChatGPT’s launch in 2022. AI is
projected to contribute ~$115 billion to the Malaysian economy over a five-year period
from 2025 to 2030.[b] Through the National AI Office (NAIO), the government aims to
enhance sustainability while ensuring economic competitiveness through two key
pillars: an inclusive sector-wide AI economy and digital infrastructure and talent
development.
While the Malaysian government supports sustainable and increased data centre
growth to expand its digital economy, changes to voltage-based power tariffs could
raise electricity costs for operators, potentially weakening Malaysia’s competitiveness
as a regional AI data centre hub. Higher operational costs may delay or scale back the
number of AI and cloud developments, slowing the rollout of AI-driven services in key
sectors like healthcare and education. As data centres underpin fintech, e-commerce,
and smart city infrastructure, rising costs could impact service quality and increase
prices across the broader digital economy in Malaysia.
Sources: [a] CBRE [b] Ministry of Digital [c] Cushman & Wakefield
Note: [1] International benchmarking can be found in Appendix 1: International Benchmarking.

15
Datacentrevaluechain
Data centres are a critical enabler of Malaysia’s digital economy – supporting a specialised supply chain
upstream and enabling growth across high-value digital sectors downstream.
Malaysia’s data centre value chain is
anchored by a network of high-value
support industries. These firms are critical
to enabling data centre construction,
operation and growth, driving demand for
skilled local technicians and engineers
who carry out builds, installations, upgrades
and maintenance. As demand accelerates,
these industries benefit through job creation,
skills development and long-term investment.
Data centres act as the digital economy’s
core infrastructure – storing, processing
and distributing data. Malaysia’s capacity is
forecast to grow from ~505MW in 2024 to
~3,600MW by 2030. This capacity expansion
is driven by strong hyperscale demand in
Johor, alongside growing needs for
colocation and edge computing across
Malaysia.
The presence of reliable and scalable data
centres unlocks innovation across high-
growth sectors. These sectors rely on data
infrastructure to scale efficiently, ensure
uptime and meet growing digital demands.
Data centres underpin wider growth by
driving investment, enabling high-value
job creation, digital exports and
enhancing productivity in these enabled
sectors.
For sectors like finance,
telecoms and energy, data
centres are critical.
Downtime can lead to:
• Lost revenue
• Operational disruption
• Recovery costs
• Reputational damage
Construction &
MEP
Equipment &
manufacturing
Operations &
maintenance
Professional
services
Adjacent
manufacturing
DC supply chain
Hyperscaler
Enterprise
Edge
Data centres
• Fintech
• SaaS
• Pharma R&D
• e-commerce
• Enterprise IT
• Financial platforms
• Telecommunications
• Retail systems
• Gaming
Enabled sectors
Data centres are key drivers of
Malaysia’s digital economy.
Their growth expands supply chains,
attracts high-value investments, and
creates highly-skilled jobs. This growth
also boosts demand in supporting
industries – such as rack assembly,
electronics recycling and light industrial
services – enhancing employment and
export capabilities. As foundational
infrastructure, data centres drive digital
transformation across Malaysia’s most
innovative sectors. Sectors like Fintech,
SaaS, and Pharma R&D are increasingly
leveraging advanced AI and cloud
technologies to enhance their services.
Growing AI data centre investment can unlock diverse local supply chain and export opportunities, particularly in high-value, tech-driven sectors, while strengthening Malaysia’s
regional economic role. Key areas include expanding AI-as-a-service and cloud offerings to ASEAN markets, exporting renewable energy and data centre technologies (e.g. cooling
systems technology), leading in circular economy practices such as e-waste management and IT assest recovery, and the development of data centre graphics processing units
(GPUs). These opportunities support industrial diversification, high-value job creation, and development of exportable digital capabilities that advance Malaysia’s digital offering.

16
Impact Strategic role Supporting evidence of scale
National
economic growth
& high-value
investment [a]
Data centres are key contributors to Malaysia’s
digital economy, underpinning high-value
investment inflows and driving long-term growth
across sectors such as AI, cloud computing, fintech
and platform services.
Critical
infrastructure [b][c]
Data centres act as the core infrastructure for
Malaysia’s digital services sector, enabling the
government’s national cloud and AI strategy, secure
financial systems and advanced cybersecurity
capability.
Position as a
rapidly emerging
hub [d][e][1]
Malaysia offers a scalable and cost-effective
complement to more mature hubs like Singapore,
with the capacity to support growing regional
demand thanks to its land availability and
competitive operating environment.
Job creation and
skills
development [f][g][h]
The data centre sector in Malaysia supports high-
quality job creation and enables long-term digital
skills growth in Malaysia through training and
hiring incentives.
Global
competitiveness &
investor
confidence [g]
Data centres are foundational to Malaysia’s
digital competitiveness. They support high-value
exports in fintech, AI and digital services while
anchoring global investor interest.
• US$36.7b digital investment secured by Malaysia in 2024 – up from US$10.5bn in 2023.
• 25.5% of GDP expected to come from Malaysia’s digital economy in 2025.
• Investments in data centres and cloud infrastructure accounted for 76.8% of total approved digital
investments in 2024.
• Malaysia’s rising focus on data sovereignty can help it develop a strong data ecosystem, which could
attract FDI and create new job opportunities.
• One example is Google’s planned $2.2bn investment in building new cloud & AI infrastructure, which is
expected to add $3.2bn to the economy and create 26,500 jobs by 2030.
• Land costs: USD $2,000-4000/m2 (Malaysia) vs USD $11,500/m2 (Singapore).
• Construction costs for 10MW data centre: USD $85m (Malaysia) vs USD $113m (Singapore).
• Energy costs: USD $0.10/kWh (Malaysia) vs USD $0.27/kWh (Singapore).
• Malaysia offers low-lag connectivity and proximity to 20 international subsea cables with <5ms latency
between Johor and Singapore.
• Digital investments in 2024 generated over 48,000 jobs in Malaysia.
• Malaysia has implemented the Data Centre Certified Technician Programme, offering comprehensive
training in data centre management, hardware maintenance, networking and disaster recovery.
• Malaysia has also introduced the MD Workforce Place & Train programme which focuses on upskilling
employees through job-relevant training, ensuring they gain the necessary qualifications and skills to
thrive in the digital economy.
• USD $48.1bn in digital exports in 2023 (57% of total services exports).
• Strong policy foundation (MD status, GITA, BoGs).
• Continued support is essential to avoid investment leakage into competing markets such as Indonesia,
Vietnam and Thailand.
StrategicroleofdatacentresinMalaysia’sdigitaleconomy
Data centres are critical national infrastructure – continued public support is essential to unlock their full
economic impact.
Sources: [a] MDEC via ET HR World Southeast Asia [b] Moxie Insights [c] Open Gov Asia [d] BCISM [e] Zenlaver [f] MIDA [g] MDEC [h] Custom Media Academy
Note: [1] In the context of data centres, Malaysia is considered a ‘Tier 2’ regional hub. This refers to a market that is rapidly emerging as a significant player in the data centre industry, but is not yet as matured as traditional ‘Tier 1’ hubs like
Singapore.

18
PolicyandregulatorysettinginMalaysia
The Malaysian Government has launched a range of policies and initiatives to position the country as a
leading and sustainable data centre hub in the APAC region.
Three key strategies to support data centre growth and development in Malaysia.
Government strategy Strategy overview
Green Lane
Pathway[b]
Established by Tenaga Nasional Berhard (TNB), the Green Lane Pathway
delivers efficient, environmentally responsible solutions for data centre operators
by streamlining onboarding and simplifying the setup of data centre
operations to attract more data centre investments to Malaysia.
Benefits for the DC landscape
The pathway provides fast-track supply offerings
for electricity, allowing data centres to be
connected three times faster than normal,
reducing the implementation period from 36-48
months to around 12 months.
Digital Ecosystem
Acceleration
Scheme
(DESAC)[c]
Introduced under Budget 2022 by the Malaysian Government, the DESAC
initiative aims to strengthen Malaysia’s digital ecosystem and attract high-
quality digital infrastructure projects to accelerate the nation’s digital
economy.
Since its introduction, the Malaysian Government
has approved 21 data centre projects, worth
$24bn – 90% of which is foreign direct
investment – boosting the country’s digital
infrastructure growth.
Johor-Singapore
Special Economic
Zone (JS-SEZ)[a]
JS-SEZ was established to enhance economic integration and attract global
investments. It encompasses nine flagship zones (e.g. Johor Bahru
Waterfront) and targets 11 key economic sectors (e.g. Digital Economy). It is
designed to boost growth and development in both regions.
The JS-SEZ supports Malaysia’s data centre
growth by streamlining regulations, improving
connectivity, developing skilled talent and
promoting sustainable digital infrastructure.
Since 2019, the Malaysian government has advanced its data centre sector through initiatives aligned with national strategies like the Twelfth Malaysia Plan (2021-2025) and the
National Energy Transition Roadmap (NETR).[d] To address sustainability concerns and skills gaps, the Government introduced the Guideline for Sustainable Development of
Data Centre in December 2024.[e] Additional guidelines, incorporating metrics like Carbon Usage Effectiveness (CUE), Power Usage Effectiveness (PUE), and Water Usage
Effectiveness (WUE) to ensure that data centres meet sustainability requirements and to support goals of 70% renewable energy usage and net-zero emissions by 2050 are in
development.[f] The Malaysian government has invested resource in adopting a coordinated approach, for example establishing the Data Centre Task Force (DCTF) which focuses
on enhancing coordination and strategies for the growth of data centres and their ecosystems.[g] The Corporate Renewable Energy Support Scheme (CRESS) aims to enhance
corporate access to green electricity, enabling third parties (such as data centres) to supply or purchase renewable energy via the grid, driving the energy transition. [b]
Policy landscape
Sources: [a] MIDA [b] Tenaga Nasional Berhard (TNB) [c] MIDA [d] Ministry of Economy [e] MIDA [f] Forbes [g] Ministry of Investment, Trade and Industry

19
The data centre boom has generated
approximately 40,000 jobs in Malaysia,
including roles in engineering, construction,
operations and support services.[f] The sector
has elevated demand for high-skilled
professionals and is fostering a
knowledge-based workforce in Malaysia.
Malaysia’sdigitalincentives
Targeted incentives driving Malaysia’s digital infrastructure [a,b,c,d]
Digital
Ecosystem
Acceleration
Scheme
Green
Investment
Tax
Allowance
Malaysia
Digital (MD)
Status
Companies incorporated in Malaysia with minimum $236
paid up capital and at least 2 full-time Knowledge Workers
earning $1,182 monthly can apply for MD status. Grants
access to all MD-specific tax incentives and non-fiscal
benefits.
Investment Tax
Allowance
(ITA)
MD status companies can receive 50-100% ITA on
qualifying capital expenditure (QCE), deductible against
up to 100% of statutory income for 5 years.
New digital infrastructure firms (e.g. data centres) may
receive 0-10% tax rates for 10 years and 100% ITA on
QCE. Existing firms diversifying may qualify for a flat 10%
rate.
Offers 100% ITA on QCE for green tech investments
over 3 years, offset against up to 70% of income.
Includes renewable energy, efficient cooling and energy-
saving systems.
Bill of
Guarantees
Includes 10 core guarantees (e.g. no internet
censorship, infrastructure access, import duty
exemptions, foreign worker quotas, IP protection and
capital sourcing freedoms) for all MD status companies.
36.7
2023 2024
10.5
+26.2
77%
23%
40,000 1.2m
The Malaysian Digital Economy Corporation
(MDEC) announced that digital investments hit a
record US$36.7bn in 2024, compared to
US$10.5bn in 2023. The agency attributed the
record investments down to a stable government
with pro-business policies reinforcing the
country’s reputation as a global tech hub.[e]
Investments in data centres and cloud
infrastructure accounted for 76.8% of total
approved digital investments in 2024, a sharp
rise from 55.5% in 2023.These facilities are
critical enablers of AI, fintech, cloud services
and smart manufacturing.[e]
In 2023, Malaysia’s digital economy
employed more than 1.2 million people and
contributed to around 25% of its GDP.[f]
This workforce spans software engineering,
cloud operations, cybersecurity etc. and
reflects Malaysia’s growing capacity to
support high-value digital sectors.
Malaysia’s digital incentives are attracting high-value global investments and strengthening its ambitions
of being a global tech hub.
Policy landscape
Data centre and cloud infrastructure
Other digital investments
Sources: [a] Crowe Malaysia – Malaysia’s Digital Status: Tax Incentives [b] Skrine – Investment in Data Centres in Malaysia [c] Open Gov Asia – Malaysia: Tax Incentives to Boost Digital Economy [d] CCS & Co – The Malaysia Digital (MD)
Bill of Guarantees [e] Digital News Asia [f] Rest of World – Malaysia’s new data centres create thousands of jobs

20
Recommendations
With the right policy environment, the Malaysian government can encourage sustainable growth of data
centres, generating local employment and economic impact across the value chain.
Local jobs Sustainability Economy
Investment in data centres should
encourage sustainable growth and
facilitate increased investment in
renewable energy. Regulations or
voluntary industry commitments on
PUE and WUE, targets for use of
renewable energy and wider
investment in key infrastructure can
help ensure growth in data centres
does not have an adverse
environmental impact.
Data centre operators are attracted to
Malaysia due to the strategic location,
competitive land costs and robust
supporting infrastructure.
However, Malaysia’s economic policy
landscape can present challenges.
The introduction of higher taxes, tariffs
and service charges can hinder the
country’s appeal as a destination for
AI-related investments with demand
moving to other regions.
There is significant economic opportunity from establishing clear, supportive policy for investment in data centres
in Malaysia, allowing the region to capitalise on the first mover advantage.
Policy landscape
While data centres generate jobs during
construction and operations, their
greatest potential lies in enabling high-
skilled, long-term careers in Malaysia’s
digital economy. To realise this,
workforce policies must prioritise
advanced digital, engineering and
technical skills, helping to ensure that
Malaysians are not just building data
centres, but also running and
innovating within them.

21
Data centres face sustainability challenges due to
constraints on key resources. Data centres run
continuously to support digital services, driving the
high energy and water usage. This puts a strain on
the national electricity grid and water resources.
Data centres require a large amount of water to
facilitate cooling, fire suppression and maintenance.
18% of Malaysia’s energy is from renewable
sources. Strategic planning of data centres is
essential to ensure grid connection and local
connection stability.
To support cooling needs sustainably, operators
including AirTrunk and Google are building
dedicated water treatment plants, reducing strain on
local water resources. New build data centre will be
using ‘closed loop’ water systems, reducing
dependence compared to older data centres. Data
centre operators are generating renewable power
onsite. The government is introducing an electricity
hike in 2025 which will reduce the cost
competitiveness of data centres in Malaysia.
Employment is required in both the construction and
operation of data centres. When data centres
become operational, they will need more skilled
professionals. Recruiting has been somewhat
challenging for data centres as there isn’t currently
the required skillset in Malaysia.
Stakeholders are working with education institutes
and universities to offer training and courses to
upskill the workforce. Companies are upskilling
employees in Singapore while the data centres are
under construction in Malaysia. Online training is
also being used to upskill and train employees.
Challenges Stakeholder actions
Sustainability
Employment
Stakeholderviewsonkeychallenges
Policy landscape
Hyperscalers plan to overcome challenges which could constrain their capacity expansion in Malaysia.
Data centre operator and user
Stakeholder insights
There’s a growing need for coordinated policy
to ensure grid resilience and to promote clean
energy generation.
We’re keen to invest more, but policy support
around talent development and infrastructure
will be key to scaling effectively.
We’re partnering with universities to offer free
digital training and certifications, building local
cloud and data centre expertise.
We prioritise developing and hiring local
talent in Malaysia because of their strong
skills and deep sector expertise.

22
Governmentcalltoaction
Policy landscape
Continued engagement with data centre operators will help maintain a competitive environment.
Reliable regulatory framework
To support long-term planning and ensure greater operational continuity,
enhanced policy certainty and the provision of timely, transparent guidance
would help operators adapt more effectively to evolving conditions.
A more predictable and stable regulatory environment, underpinned by clear
communication and consistent implementation, would contribute to stronger
overall investor confidence and sustained sector growth.
Sustainable development
Addressing sustainability challenges-particularly in energy and water use-
can help Malaysia remain competitive and attractive to investors. The
introduction of energy efficiency standards by the federal government is a
positive step toward reducing electricity and cooling demands in data
centres. Effective collaboration between federal and local authorities will be
important to ensure consistent and regionally appropriate implementation.
Land use is currently guided by the 2024 ‘Planning Guidelines for Data
Centres’, with additional guidance on responsible power and water use
under development. Continued government support – through renewable
energy incentives and well-defined market pathways – could help enable
the development of sustainable data centre infrastructure.
Tariff structures
To maintain a competitive environment, it may be beneficial for the federal
government to review tax and energy tariff structures to support national data
centre ambitions. Recent changes could affect Malaysia’s competitiveness,
which may influence investor decisions and shift interest toward neighbouring
markets such as Thailand or Vietnam, potentially undermining Malaysia’s
ambition to be a leading global hub for AI data centres. Consultation on
proposed changes to tariff structures with data centre operators could help
ensure objectives of the proposed intervention are understood by industry and
can be implemented effectively.
Upskill workforce
Malaysia has taken steps to strengthen its digital workforce through
initiatives like the Malaysia Digital Economy Blueprint and Malaysia Digital
status, both of which prioritise skills development. However, the availability
of skilled data centre professionals per capita remains lower than in more
established markets such as Singapore, Hong Kong, Korea and Japan.
Additionally, regional peers like Thailand and Vietnam report lower attrition
rates, suggesting that enhanced talent retention strategies and greater
collaboration between government and industry on workforce development
could further support Malaysia’s competitiveness in this sector.
01
02
03
04
Stronger collaboration between the federal government and local authorities could ensure data centre policies are effectively implemented and tailored to regional needs. Local
governments can play a role in communicating specific requirements and constraints early, helping to minimise disruptions to data centre development and operations.

24
Economicimpactsgeneratedbydatacentres
Data centres use resources to operate, in return generating direct economic impact and employment, and
supporting industries which contribute to economic output.
Economic impacts
Data centres use physical and digital inputs, such as land, energy, skilled labour, and IT infrastructure. Using these inputs, data centres process, store, and transmit
data. This activity generates economic outputs such as high-value jobs and increased economic activity. Beyond that, data centres enable broader impacts by
powering the digital economy, improving productivity, supporting infrastructure development, and creating opportunities in education, exports, and innovation.
Inputs
• Land: Data centres must have appropriate
planning permission and be close to power and
fibre infrastructure.
• Energy: Data centres require a reliable electricity
supply, ideally sourced from renewable energy
sources and with energy efficient design. A single
hyperscale data centre can consume 20-50 MW,
equivalent to powering up to 35,000 homes.[a]
• People: Skilled personnel are needed to construct
and operate data centres (engineers, contractors,
IT technicians etc.).
• Water: Access to reliable and sustainable water
sources is required for the cooling systems. Large
data centres can consume up to 19 million litres
of water per day.[b]
• Financial investment: Needed to acquire the land
and construct the data centre, alongside ongoing
operating expenditure.
Outputs
• Employment: Created during both construction
and operations - supporting household incomes.
• GVA: Contribution to GVA by supporting digital
services and enabling economic activity.
• Data processing: Large amounts of data handled,
enabling productivity gains in services such as AI
and cloud computing.
• Data storage: Provides scalable storage solutions
beyond typical in-house capabilities.
• Digital services: Enables operation of services
e.g. streaming, online banking and remote working.
Enabled
• A digital economy: Which supports innovation
and an ecosystem of tech firms.
• Improved productivity: Enables digital tools and
automation across sectors.
• Improved local infrastructure: Driving upgrades
in power and fibre networks.
• Education and training initiatives: Leads to
investment in digital skills and workforce
development.
• FDI and Export opportunities: Enables a hub for
digital services, attracting FDI and increasing
exports.
• Critical infrastructure: Facilitates day to day
activities such as e-commerce, online banking etc.
Sources: [a] Cundall – Controls and Instrumentation for Hyperscale Data Centres [b] Environmental and Energy Study Institute (EESI) – Data Centres and Water Consumption: Data Centers and Water Consumption | Article | EESI

25
Estimatedoperationalcapacityandpipeline(2024to2030)
Malaysia’s data centre capacity could grow from 505MW in 2024 to between 2.1GW and 5.1GW in 2030.
Economic impacts
21%
79%
2024 capacity
505
Malaysian data centre capacity estimate (2024, MW) and forecast development pipeline (2025 to 2030, MW)[1][2][a][b][c]
The Penang and Sarawak regions have a
combined operational capacity of 1MW (or
~0.2% of total capacity) for 2024.
Penang & Sarawak regions
Klang Valley region
Johor region
Malaysian data centre capacity pipeline (2025 to 2030, MW) by scenario
Under the baseline scenario, we estimate that Malaysia’s operational capacity could grow from 505MW in 2024 to 3,578MW in 2030 at an average CAGR of 38%. Around
70% of all data centre applications are assumed to be delivered in this scenario. An increase or decrease in the number of projects accepted could result in a higher or lower
operational capacity by 2030. To reach the high scenario, the government could continue to streamline the application process to ensure more data centres are approved and
developed resulting in a higher overall MW capacity in 2030. This can support Malaysia’s ambition to become Southeast Asia’s major AI data centre hub.
638
2,137
710
3,578
766
5,137
2025f. 2026f. 2027f. 2028f. 2029f. 2030f.
Low scenario Baseline scenario High scenario
Sources: [a] KPMG analysis [b] Knight Frank Malaysia report: KFM_DC Whitepaper Report_2024.pdf [c] Knight Frank Global Data Centres report: data-centres-global-forecast-report-2025-11877.pdf
Note: [1] A detailed discussion of the scenario assumptions and rationale can be found on pg. 46, Appendix 3: Methodology.
[2] The 2024 estimate is informed by data on estimated operational MW capacity in Malaysia up to December 2024.

26
Investment to increase data centre capacity will generate broad-based economic value – from high-value
job creation to national growth – with measurable impacts across the Malaysian economy.
Economic impacts
Sources: [a] KPMG Impact Model
Note: [1] Gross Value Added (GVA) measures the value of goods and services produced minus the costs of inputs, whereas economic output reflects total turnover and includes intermediate consumption.
[2] Our economic assessment is based on an input-output model, and captures the direct and wider measurable effects of data centre activity in Malaysia. This represents a lower-bound estimate of the total economic contribution.
The wider ‘enabled’ impact – including productivity gains, ecosystem development, digitally enabled publics services – extends beyond what is readily quantifiable and is not reflected in the values provided here.
Economicbenefitsofhigh,baselineandlowcapacity
$24.0bn
Equivalent to $7.6bn in GVA.
38% CAGR 2025-2030
High
Baseline
Annual economic output supported
through the operational activity of
each capacity scenario
$10.2bn
Jobs supported each year through
operational activity of each capacity
scenario
~30,900
Contributing $1.3bn in annual wages.
$11.0bn
29% CAGR 2025-2030
Low
$6.1bn
~18,500
Contributing $790m in annual wages.
Potential economic output
supported during the construction of
each capacity scenario
$39.0bn
Equivalent to $12.4bn in Gross Value
Added (GVA).
45% CAGR 2025-2030
$14.6bn
~44,400
Contributing $1.9bn in annual wages.
Values shown are a lower-bound estimate of the total economic contribution. The wider ‘enabled’ economic impact extends beyond what is readily
quantifiable and is not included in the values here.
Economic impacts supported by data centres in Malaysia (2030) (USD $2024bn)[1][2][a]

27
EconomicoutputandGVAimpacts:Baselinescenario
In 2030, data centres in Malaysia could support ~$34bn in total economic output and ~$12bn in GVA,
approximately 4.1% and 3.5% of the national totals, respectively.[1][2]
]
Direct, indirect, and induced economic output, $2024bn Direct, indirect, and induced gross value added, $2024bn
Economic output Gross Value Added (GVA)
Across both construction and operation, data centres in Malaysia could contribute ~4.1% of national economic output and ~3.5% of GVA by 2030,
respectively.[a][b]
14.0
12.8
0.3
7.4
0.5
0.7
2024 output 2030 output
1.4
34.2
+32.8
Direct output Indirect output Induced output
4.5
4.6
0.1
2.7
0.2
0.3
2024 GVA 2030 GVA
0.6
11.8
+11.2
Direct GVA Indirect GVA Induced GVA
Economic impacts
Sources: [a] KPMG Impact Model [b] KPMG analysis
Note: [1] Gross Value Added (GVA) measures the value of goods and services produced minus the cost of inputs, whereas economic output reflects total turnover and includes intermediate consumption.
[2] The results reported relate to total economic output and GVA that could be supported by data centres under our baseline scenario. The results do not reflect values for the high and low scenarios.

28
Annualjobsandincome
Total employment across the industry has the potential to grow significantly as capacity expands, with
up to 30,900 jobs supported – including 4,300 high-value roles.
1,000
3,300
2024 Employment
7,300
23,600
2030 Employment
4,300
(14%)
Knowledge Jobs
4,400
30,900 30,900
+26,600
• Between 2024 and 2030, total employment supported by data centres in Malaysia is
projected to grow by approximately 26,600 jobs from 4,400 in 2024 to 30,900 in 2030,
including 4,300 high-value knowledge jobs. Of these, around 23,600 will be indirect
or induced, highlighting the sector’s strong multiplier effect on the economy.
• Over the same period, total annual wage income supported by the sector is projected
to increase nearly eightfold – from $175m in 2024 to approximately $1.3bn by 2030.
Most of this income growth (~$1.1bn) will accrue from supply chain and wage induced
impacts (~$0.97bn), highlighting data centres’ broader economic influence.
• In 2024, data centres supported ~1,000 direct operational jobs with an estimated 61%
based onsite. These roles typically include hardware and facilities technicians, security
personnel, and cleaning staff. Around 39% of jobs are based offsite, including
software engineers & developers, cloud architects, sales & marketing teams, and
finance teams. By 2030, this number is estimated to reach up to 7,300 direct
operational jobs.
• While direct operational employment remains modest over the period, the broader
economic contribution could be significant. Data centres could support over 4,000 high-
skilled knowledge-based jobs by 2030-driving income growth, enabling skilled
employment and advancing Malaysia’s transition to a high-value digital economy.
• A report by MDEC found that there was 2% growth in digital talents on LinkedIn
between Q2 and Q3 in 2024. The report also found that 50% of industries with demand
for digital talents are from non-tech sectors. [b].
• The data centre sector drives high-value, knowledge-intensive jobs – both within its own
operations and across the broader digital economy, enabling roles in cloud engineering,
AI, cybersecurity and software development. Data engineering holds the top position
among the fastest growing job titles in Malaysia and Southeast Asia. [b].
x4.2
multiplier effect
For every direct job in data centre operations,
an additional 3.2 jobs are supported
elsewhere in the Malaysian economy.
Estimated growth in total operational employment, 2024-2030
Economic impacts
Sources: [a] KPMG Impact Model [b] Malaysia Digital Economy Corporation (MDEC)
Note: [1] The above jobs represent value chain jobs as a result of expenditure by the industry, creating jobs in supplying industry. [2] Numbers may not add to total due to rounding. [3] In this case, a knowledge worker is a qualified person
who holds a degree and has at least ten years’ experience working in any of the qualified activities, as defined by the Malaysian government.
Direct Indirect and induced
Baseline Scenario

30
Supportingactivityupstream
Malaysia’s data centre supply chain is underpinned by a diverse and high-value ecosystem of industries.
Example Malaysian companies
Designs and delivers civil,
mechanical and electrical
infrastructure for data centres.
Provides critical systems for
power, cooling, connectivity and
network resilience.
Ensures ongoing data centre
uptime, thermal management and
facility performance.
Delivers IT consulting, auditing,
cybersecurity, legal and
compliance expertise.
Manufactures semiconductors,
servers, racks, fibre and other
high-value infrastructure.
Supporting activity Role in DC ecosystem
Construction
& MEP
Example international companies
Equipment
manufacturing
Operations &
maintenance
Professional
services
Adjacent
manufacturing
The expansion of Malaysia’s data centre footprint presents a major opportunity to grow a high-value domestic supply chain – attracting international firms,
scaling local capability and unlocking wider economic benefits across engineering, technology and advanced manufacturing.
Enabling the value chain

31
Enabledimpacts(1/2)
Data centres enable the digital economy and create opportunities to export digital services.
Data centres are a key part of building a strong digital economy. They enable a
wide range of services including online banking, e-commerce, cloud services and
digital public services. With data centres providing reliable connections, local
businesses can adopt new technologies more easily, improve efficiency, and reach
wider markets. Data centres attract foreign direct investment (FDI) to Malaysia
by providing the digital infrastructure essential for global business operations.
Data centres often attract a cluster of related businesses such as cloud
providers, cybersecurity firms and software developers. This creates
agglomeration benefits (advantages firms gain from being located close to each
other). Tech companies benefit from being close to data centres, as they can
capitalise on proximity to high-speed data processing facilities. Being part of
this ecosystem can lead to partnerships, innovation and shared resources. This
ripple effect of tech companies locating close to data centres boosts local
employment in high tech industries, contributing to the diversification and growth of
the economy.
The Malaysian government has launched the Digital Ecosystem Acceleration
Scheme and established a Data Centre Task Force (DCTF) to streamline
development and attract more investors. These initiatives provide clarity,
incentives, and a roadmap for transforming the country into a digital hub and
making data centres a magnet for FDI in Malaysia. In 2021, foreign investors
accounted for 90% of funding in Malaysia’s data centre projects, reflecting strong
global confidence in the country’s digital infrastructure and regulatory framework.
[a] This positions Malaysia as a growing digital hub, attracting major tech firms.
Free flow of data
The Japanese Government has adopted a policy position of promoting the
free flow of data and does not provide data localisation regulations or require
government access.
Increased investments in AI and cloud data centres enables more agile and
scalable digital services for Japan’s wider digital economy.
Infrastructure status for data centres
India has granted critical infrastructure status to data centres, making them
eligible for easier financing and priority lending – something not commonly
seen across the APAC region.[c]
This strengthens India’s wider digital economy by enabling factors such as
priority access to utilities, inclusion in national infrastructure planning and
global competitiveness. The designation of data centres as critical
infrastructure could also help unlock incentives and fast-track development
pipelines.
Critical enabler of a digital economy
The growth of data centres in Malaysia presents significant export opportunities, particularly
in high-value digital services. As these centres attract a cluster of tech firms, cloud service
providers, and cybersecurity companies, they create a digital ecosystem that can export
services such as data analytics, software development, and IT consulting.
Export opportunities
International examples [1]
Sources: [a] Invest KL Malaysia [b] KWM [c] CBRE India
Note: [1] International benchmarking exercises can be found in Appendix 1: International Benchmarking.

32
Enabledimpacts(2/2)
The development of data centres can lead to significant investment in education and training initiatives,
as well as improvements in local infrastructure to support the growing digital economy.
Data centres can play a role in addressing the growing demand for skilled workers
in the ICT sector, particularly in Malaysia, where the industry faces a shortage of
qualified professionals due in part to gaps in education and training. By investing in
local talent development, through partnerships with educational institutions,
apprenticeships, and support for STEM programmes, data centre providers help
bridge this skills gap. These initiatives not only build a more technologically capable
and better-paid workforce but also support the wider digital economy.
These initiatives create employment opportunities, strengthen community
engagement, and enhance the industry's reputation for social responsibility. Over
time, such efforts contribute to greater economic resilience, foster innovation, and
help establish a more sustainable and inclusive digital infrastructure. A report by
MDEC found that the fastest growing skills in Malaysia include Manufacturing
Automation and System Configuration emphasising a focus on automation and
system optimisation. [a]
Example: Microsoft’s Data Centre Academy in Singapore
Microsoft established its first Asian data centre academy (DCA) in Singapore's
Institute of Technical Education (ITE) in 2022. The ITE has an annual intake of
between 14,000 and 15,000 full-time students. [b] The DCA is a five-year commitment
on the part of Microsoft to empower around 300 ITE students to acquire applied data
centre skills. It will enable students to work in a growing ICT sector. Through ITE’s
Work Study Diploma program, Microsoft will offer scholarships to cover tuition
costs for up to 20 ITE students who are interested in a future in the data centre
industry. [c] Upon completion of their academic program, selected students will get an
opportunity to interview for open data centre positions at Microsoft in Singapore.
Data centres drive major upgrades to local infrastructure, particularly in power
supply and digital connectivity. To meet high energy demands of data centres, utility
providers and data centre operators strengthen the power grid by upgrading
substations, installing more robust transformers, and introducing smart grid
technologies. These improvements ensure a stable supply for data centres and
benefit nearby homes and businesses by reducing outages and boosting energy
resilience.
The need for ultra-fast, low-latency internet leads to the expansion of fibre-optic
networks, improving connectivity for the wider community. This investment helps
bridge the digital divide, supports local businesses, and facilitates broader digital
transformation and subsequent economic growth. Malaysia is already experiencing
local infrastructure investment, e.g. a $390m investment in submarine cable network
connectivity. [e]
Example: Local infrastructure upgrades in Indonesia
Indonesian’s data centre development has led to infrastructure improvements. As
major tech companies have established facilities in the country, there has been a
concerted effort to upgrade the national power grid to ensure consistent and
reliable energy supply. These enhancements have helped stabilise electricity access
not just for data centres, but also for surrounding communities. The demand for high-
speed, low-latency connectivity has driven significant investment in fibre-optic
networks in Indonesia. In 2024, there was $3.2 bn in revenue in the fixed
communication services, heavily driven by fibre-optic services.[e]
Education and training Local infrastructure investment
Sources: [a] Malaysia Digital Economy Corporation (MDEC) [b] Department of Statistics Singapore [c] IT News Asia [d] CBRE [e] GlobalData

33
0
100
200
300
400
500
600
0
50
100
150
IT
load
capacity
(MW)
(21%)
2013
(21%)
2014
(21%)
2015
(21%)
2016
(21%)
2017
(22%)
2018
(23%)
2019
(25%)
2020
(25%)
2021
(25%)
2022
(26%)
2023
(26%)
2024
81
86
GDP
($2015b)
93
98
103
112
90
127
133
139
146
116
Colocator Capacity (MW)
GDP (IT, Finance, Insurance & Professional Services)
Singapore has developed a mature and strategically important data centre landscape. Between 2013 and 2024, colocation data centre
capacity grew from 10MW to 550MW. Over the same period, GDP from IT, finance, insurance and professional services rose from $81bn
to $146bn, with these digitally enabled sectors expanding from 21% to 26% of total GDP. While Singapore’s overall GDP contracted
between 2019 and 2020, the IT, finance and professional services sector remained resilient by continuing to grow through the downturn.
The parallel growth in digital infrastructure and high-value services illustrates the critical enabling role data centres play in economic growth
and resilience. While this data shows a strong correlation, causation cannot be directly inferred. However, international studies have
consistently highlighted the role of digital infrastructure as a foundational enabler of innovation, productivity and economic
diversification.[c][d] Modern data centres support latency-sensitive cloud services, scalable enterprise platforms, AI development and fintech
exports. As Malaysia’s data centre sector grows, it has the potential to unlock significant economic value by enabling the
expansion of high-productivity sectors such as cloud services, financial technology, advanced digital services and professional
industries, helping to strengthen Malaysia’s position in the digital economy.
Colocation capacity in Singapore vs growth in high-value digital sectors (2013-2024) [a][b]
IT load capacity (MW) and GDP ($2015bn)
Impactsbeyonddatacentres–Singapore
Singapore’s experience highlights the enabling role of data centre infrastructure in unlocking growth.
550MW
$562bn
$146bn
2024
10MW
$396b
$81b
Colocatorcapacity[a]
21% 26%
2013
GDP(economytotal)[b][1]
GDP(IT,financeetc)[b][2]
%GDP(IT,finance,etc.)
Sources: [a] DC Byte [b] Department of Statistics Singapore [c] OECD [d] World Bank Group
Note: [1] Refers to Singapore GDP
[2] Refers to GDP from IT, finance & professional services.

34
As colocation IT load has scaled from 10MW in 2013 to 550MW in 2024, employment in digitally enabled sectors including information & communications, financial & insurance
services and professional services has increased in parallel. Employment in these digitally enabled sectors has risen by 193,000 (+50%) and has grown at an average rate of
~4% per year. Data centre infrastructure has been a foundational enabler of this growth, supporting latency-sensitive cloud workloads, AI computing and digital platform services
across Southeast Asia. While this data shows a strong correlation, causation cannot be directly inferred. However, international studies have consistently highlighted the role of
digital infrastructure as a foundational enabler of innovation, productivity and economic diversification.[c][d]
This trend highlights a structural employment uplift enabled by reliable and scalable data centre infrastructure. Singapore illustrates how investing in data centre
capacity can deliver long-term job creation, particularly in exportable digital services.
Colocation capacity in Singapore vs growth in high-value digital employment (2013-2024) [a][b]
IT load capacity (MW) and employment (‘000s)
Impactsbeyonddatacentres–Singapore
Singapore’s experience highlights the enabling role of data centre infrastructure in unlocking high-value
employment.
143 153 163 171 174 182 181 197 198 200 197
148
166 167 191 190 196 208
225 236 236 239
92
88 86
87 91 94
103 111
136 139
0
50
100
150
200
250
300
350
400
450
500
550
0
50
100
150
200
250
300
350
400
450
500
550
600
Employment
(000’s)
[b]
IT
load
(MW)
[a]
2013 2014 2015 2016 2017 2018
209
2019 2020 2021
133
2022 2023 2024
383
407 420
441 452 465
494 501
542
566 572 576
167
120
Colocator IT load (MW)
Information & communications jobs
Financial & insurance services jobs
Professional services jobs
As Malaysia expands its data
centre sector, it is well positioned
to unlock similar employment
benefits.
These gains extend beyond the
direct and indirect jobs generated
by data centre construction and
operations. They will also include
newly created roles in AI and data
engineering as well as employment
generated in server operations,
logistics and fibre deployment.
These jobs will be enabled by
scalable digital infrastructure and
will contribute to long-term growth in
high-value, exportable digital
services.
Sources: [a] DC Byte [b] Department of Statistics Singapore [c] OECD [d] World Bank Group

Appendix1:
International
benchmarking

37
StrategicinsightsfromAPACdatacentreleaders:Japan&India
Japan and India seek to grow their digital economies through greater AI and cloud investment.
• DCs are treated as critical
infrastructure as Japan
advances digitalisation
through cloud, AI, 5G, and
e-government services.
• Japan’s Digital Agency and
METI are jointly promoting
a national strategy to build
secure interoperable
digital infrastructure.[a].
Strategic role
Japan
India
Employment & skills
• Japan’s share of global
semiconductor market
share has fallen from 50%
to 10%, limiting domestic
access to advanced chips
for AI and data centres.[d]
• To meet rising investor
demand, local firms are
converting offices into
colocation data centres.[e]
Supply chain
• High construction costs:
Japan leads in APAC in
regional construction costs
per MW for data centres.[f]
• Land & power
constraints: Urban areas
(e.g. Tokyo) face land
shortages and constrained
power – especially for AI
workloads.[g]
Challenges
• In December 2024, the
Seventh Strategic Energy
Plan draft was released,
supporting data centres in
becoming carbon neutral.[h]
• In 2024, Japan expanded
its data centre subsidy
programme to decentralise
development beyond Tokyo
and Osaka.[i]
Policy & governance
• India’s Draft Data Centre
Policy aims to position the
country as a global hub
through fiscal incentives,
local manufacturing and
renewable energy support.
• Several Indian states
introduced data centre
policies to attract
investment.[n].
• Some data centres are
designated as Critical
Information
Infrastructure (CII) due to
their role in digital and
economic growth.[j]
• India’s data centres are
vital to its digital economy
developments, driven by
rising cloud demand.[k]
• IT talent gaps exist in Japan
with over 70% of
organisations
understaffed in key areas
such as cloud and AI.[b]
• Japan is boosting data
centre training to meet the
rising demand for digital
skills, focusing on upskilling
and new talent pathways.[c]
• India’s tech industry
employs over 5.4m people,
with digital services making
up around 37% of the
workforce.[l]
• India’s talent gap - currently
the lowest among global
peers at 25% - is projected
to reach 29% by 2028 as
demand surpasses 6m.[1]
• India’s data centres
depend on imported
hardware, making them
vulnerable to global supply
disruptions.[m].
• India’s global connectivity
via submarine cables and
location to global
markets makes it attractive
to investors.
• Energy sources: India
depends on coal and
imported gas, with
domestic supply meeting
only half of DC demand.
• Grid strain: Clustering of
data centres in cities like
Mumbai and Chennai puts
localised pressure on
power grids.
Malaysia can learn from Japan and India by designating data centres as critical infrastructure. Targeted workforce training - like Japan’s initiatives - can
help bridge skills gaps, while Japan’s success in promoting de-centralised data centre growth highlights the value of nationwide investment to advance the
digital economy. Both countries also underscore the importance of sustainability standards and policies that support data centre operations and
development to enhance their respective digital economies.
Appendix 1: International benchmarking
Sources: [a] METI [b] The Linux Foundation [c] METI [d] CETAS [e] Savills [f] Cushman & Wakefield [g] CBRE [h] Agency of Natural Resources and Energy [i] JETRO Invest Japan Report [j] Department of Financial Services India [k] JLL:
India's Data Centres [l] NASSCOM [m] Economic Times India [n] Ministry of Information and Broadcasting Government of India
Note: [1] ‘Talent gap’ refers to the difference in demand for data centre tech talent and the available supply in the workforce.

38
BenchmarkingAPACdatacentremarkets(1/2)
Malaysia combines fast capacity expansion, strong government support and rising hyperscale interest
with lower cost and execution risk than neighbouring hubs.
Malaysia is one of the fastest growing data centre markets in APAC, with total capacity forecast to double from 1.26GW to 2.53GW and colocation revenue
rising from $0.71bn to $1.87bn between 2025 and 2030 – representing CAGRs of 15% and 21% respectively. This growth trajectory reflects increasing
hyperscale and enterprise demand, supportive government policy (e.g. Malaysia Digital and GITA incentives), and Malaysia’s positioning as a hub in Southeast
Asia. While Singapore remains a high-value, mature hub, its future growth is constrained by land and energy limitations. In contrast, Malaysia combines strong
policy support, land availability and competitive costs positioning it as an attractive location for colocation providers in Southeast Asia.
3.31
India
1.89
2.18
Australia
1.34
2.32
Japan
1.20
1.44
South
Korea
1.27
1.26
Malaysia
1.14
0.97
Indonesia
3.38
1.02
Singapore
0.59
0.51
Thailand
0.43
0.53
Vietnam
6.69f
(15%)
4.07f
(13%) 3.66f
(10%)
2.64f
(13%)
2.53f
(15%) 2.11f
(17%)
1.16f
(3%)
1.10f
(17%)
0.95f
(13%)
0.14
APAC colocation revenue (2025-2030) ($2024b) and CAGR (%) [a]
Country
2025
revenue
2030
revenue (f)
CAGR
India 2.33 4.93 16%
Australia 2.50 5.32 16%
Japan 2.51 4.98 15%
South Korea 1.16 2.02 21%
Malaysia 0.71 1.87 21%
Indonesia 0.68 1.89 23%
Singapore 1.07 1.60 8%
Thailand 0.51 1.21 19%
Vietnam 0.59 1.40 19%
APAC data centre capacity growth (2025-2030)[a]
Forecast installed capacity (GW) and CAGR by country
2025 MW capacity
2026-2030 MW capacity
2030 forecast MW capacity
2025-2030 CAGR
Sources: [a] Mordor Intelligence – Data Centre Market Size & Share Analysis – Growth Trends & Forecasts up to 2030
Among emerging markets Malaysia stands out
as being on track to match the data centre
capacity of established APAC regions like South
Korea and Japan.

39
• Malaysia’s infrastructure is scaling
rapidly, with high availability and
redundancy facilities comprising 81%
of the market.
• New developments increasingly
integrate energy efficiency and
scalability, with operators targeting
hyperscale readiness.
• Around 18% of Malaysia’s grid is renewable
powered.
• The GITA scheme incentivises DC builds
and developers are incorporating advanced
cooling and design efficiencies.
• Regulatory frameworks are investment
friendly and evolving to support green
certifications and carbon reporting.
• Singapore maintains the most advanced
infrastructure in APAC. Enterprise-grade
remains standard, with fault-tolerant
infrastructure adoption accelerating
for high-security workloads.
• Singapore is space constrained.
Expansion is tightly managed under
government planning quotas.
• Thailand is experiencing increased
digital infrastructure development.
• Substantial growth in hyperscale
developments due to supportive
government policies.
• Bangkok has a concentration of digital
businesses with increasing demand
for cloud service data centres.
• Thailand has a high penetration rate
of 5G (9.2%) in the ASEAN region,
driving growth in investments by DC
operators.
• Increased number of digital
consumers particularly across the e-
commerce sector boosting data centre
demand.
• Thailand’s ESG landscape is evolving.
Operators are focusing more on
environmental sustainability in line with
the government’s renewable energy
ambitions for 2021 and 2050.
• However, developers and operators
must adapt to evolving regulations
while maintaining essential services.
• Singapore remains APAC’s premium DC
destination, ideal for regulated and latency-
critical workloads.
• However, rising land prices, moratorium
legacies and ESG limits are pushing
operators to explore nearby markets for
scalable builds.
• Thailand offers strong upside potential
for hyperscale players, with abundant
land, VAT exemptions and a vast
digital market.
• However, execution risk remains high
due to grid constraints as the country
works to expand its renewable energy
capacity.
Infrastructure profile Demand drivers Sustainability & regulation Investment landscape
• Malaysia’s demand is underpinned by
97% smartphone penetration, strong
cloud adoption and 5G deployment.
• Malaysia benefits from both domestic
demand and spillover from
constrained neighbours.
• The GITA scheme incentivises DC
builds and developers are incorporating
advanced cooling and design
efficiencies.
• Regulatory frameworks are investment
friendly and evolving to support green
certifications and carbon reporting.
• Malaysia is seen as a cost-effective,
stable rapidly emerging hub with strong
government support.
• Land, labour and energy costs are
significantly lower than Singapore’s
while offering stronger reliability and
infrastructure readiness than
Indonesia.
• Singapore’s digitally mature market is
driven by enterprise AI, fintech and
smart manufacturing.
• 5G rollout and latency-sensitive
applications maintain demand for
premium infrastructure.
• Singapore enforces strict
sustainability standards: all new DCs
must meet best in class efficiency
targets.
• Operators use PPAs, district cooling
and smart energy systems.
• Singapore remains APAC’s premium
DC destination, ideal for regulated and
latency-critical workloads.
• However, rising land prices, moratorium
legacies and ESG limits are pushing
operators to explore nearby markets
for scalable builds.
Malaysia
[a]
Singapore
[b]
Thailand
[c]
Malaysia is emerging as APAC’s most balanced data centre market – scalable infrastructure, rising
demand and low execution risk.
Sources: [a] Mordor Intelligence – Malaysia Data Centre Size & Share Analysis – Growth Trends & Forecasts up to 2030 [b] Mordor Intelligence – Singapore Data Centre Size & Share Analysis – Growth Trends & Forecasts up to 2030 [c]
Mordor Intelligence – Thailand Data Centre Size & Share Analysis – Growth Trends & Forecasts up to 2030
BenchmarkingAPACdatacentremarkets(2/2)

Appendix2:Enabled
impactcasestudies

41
Casestudy:Cloudcomputing
Cloud computing is the delivery of computing services, such as storage, processing power, databases, networking, software, and analytics over the internet (the
cloud) instead of using local servers or personal devices. Data centres enable cloud computing by hosting the physical infrastructure such as servers, storage, and
networking that powers virtual services accessed over the internet. They allow users and businesses to run applications, store data, and scale resources without
needing to manage hardware themselves. Data centres are strategically located worldwide to ensure minimal latency (time it takes for the data to travel from the
user’s device to the data centre and back) and optimal accessibility for users in different regions.
Overview of data centres role in enabling cloud computing
In order to obey data protection
rules and laws government data
needs to be stored locally.
Our cloud computing services support critical sectors like government,
banking, healthcare, and transportation—enabling faster decision-making
and digital transformation across the economy.
Benefits of data centres to cloud computing
Reliable infrastructure
Data centres provide the physical
infrastructure, servers storage and networking that
cloud computing depends on. This ensures
consistent performance and uptime.
Scalability and cost efficiency
Data centres allow cloud providers to
scale resources up and down quickly, which enables
users to handle varying workloads without investing
in their own hardware, minimising costs.
Security and compliance
Data centres are equipped with advanced
security systems and adhere to strict regulatory
standards, helping cloud services protect sensitive
data.
Data centres are a critical part of cloud computing, providing the infrastructure needed to process
transactions quickly and reliably.
Appendix 2: Enabled impact case studies
SME Data centre operator and user

42
Casestudy:Airtrafficcontrol
Air traffic control (ATC) is a system that directs aircraft on the ground and in the air to ensure safe distances between them and efficient flight paths. It helps to
prevent collisions, manages air traffic flow and supports pilots with navigation and communication. As global air traffic continues to increase, the complexity of
managing air space grows more challenging. To address these complexities ATC systems are using emerging technologies such as AI, cloud computing and
cybersecurity to maintain safety and efficiency. As air traffic management becomes increasingly AI-driven, traditional systems can't keep up with the scale and
speed of data required. Modern AI needs cloud-based, geo-redundant data centres to process real-time, global data for accurate, efficient decision-making.
Overview of data centres role in enabling air traffic control
Benefits of data centres to air traffic control
Real-time
data processing
Data centres allow for the instant analysis of
radar, satellite and aircraft data. This supports quick
decision-making for safe and efficient flight
management.
Improved reliability and
communication
Data centres keep air traffic control systems running
smoothly. They have backup systems, so
communication and monitoring continue without
interruption which is essential for flight safety.
Advanced
decision-making
Data centres support advanced predictive
analytics and AI tools for traffic prediction and
anomaly detection. This helps optimise flight paths
and reduce congestion and delays.
Data centres play a critical role in ATC by providing the computing infrastructure needed to process real
time flight data, support predictive analysis and ensure seamless communication to aircrafts.

43
Casestudy:E-commerceandonlinebanking
E-commerce and online banking are digital services that allow people to shop, pay and manage their finances over the internet, offering convenience, speed and
24/7 access to goods and financial tools. Data centres are a critical part of modern e-commerce and online banking. They provide the infrastructure needed to
process transactions quickly and reliably. They ensure that websites and apps remain accessible at all times, even during periods of high demand. Data centres
have advanced security systems and are compliant with strict regulations to protect sensitive customer information and financial data. Data centres’ ability to scale
computing power, storage and network capacity and adapt in real-time allows businesses and banks to deliver uninterrupted digital experiences to users worldwide.
Overview of data centres’ role in enabling e-commerce and online banking
Data centres ensure that
confidential information remains
secure.
Data centres will play a pivotal role in enabling Malaysia’s digital economy,
supporting sectors like banking and finance and national infrastructure.
Benefits of data centres to e-commerce and online banking
Optimising transaction processing
Data centres provide the infrastructure that
generates data and allows transactions to take place.
This processing of transactions enables seamless
online purchases and banking, ensuring services are
always accessible.
Enhanced data security
Data centres safeguard sensitive data with
robust cybersecurity measures and adhere to strict
regulatory standards to ensure protection against
fraud for customer or payment information.
Elastic scalability for peak demand
During peak demand, such as sales events
or end of month banking activity, data centres
automatically scale resources to keep websites
and banking apps running smoothly without
interruption.
Data centres are a critical part of modern e-commerce and online banking, providing the infrastructure
needed to process transactions quickly and reliably.
Data centre operator and user SME

45
Economic impacts are categorised
as:
a) Direct impact: the economic
activity that the data centre sector
itself generates in Malaysia. This
is shown in economic output,
GVA, labour income and jobs.
b) Indirect impact: the supply chain
impact that occurs as the data
centre sector buys inputs of
goods and services from other
sectors of the economy. This is
shown in economic output, GVA,
labour income and jobs.
c) Induced impact: the wage-
financed impact generated by the
expenditure of wages of data
centre sector employees, and
employees in its supply chain.
This is shown in terms of
economic output, GVA, labour
income and jobs.
03 Outputs
• Findings from the economic
analysis are discussed and
reported under different
scenarios.
• The analysis is carried out at a
national level.
04Reporting
• We used KPMG’s bespoke input-
output model. It draws on project
specific inputs and industry
defined multipliers to estimate
economic impact across
industrial sectors.
• Data is collected from a range of
sources including the Malaysian
Department of Statistics and the
Malaysian Investment
Development Authority and
includes metrics such as
employment contributions and
impact multipliers per sector.
• Analysis is framed around
different pipeline growth
scenarios to demonstrate
outcomes under different
circumstances.
02 Modelling
Project specific inputs required for
the analysis are:
1. Information on costs and
current spend by organisations
across sectors
2. Understanding of how this
spend flows through different
sectors
3. Growth forecasts for
organisations for future spend
This information has been sourced
from publicly available sources and
sense checked with APDCA.
01 Inputs
As company financials are
unavailable, "Opex per
MW" and "Capex per MW“
are used as inputs. Detail
on assumptions used is
provided.
The input-output model captures
the impacts of the data centre
supply chain: Construction &
MEP, equipment and
manufacturing, operations and
maintenance, professional
services and adjacent
manufacturing.
These industries will benefit
through job creation, skills
investment and long-term
investment.
Appendix 3: Methodology
Economicanalysisapproach
We used KPMG’s bespoke input-output (IO) model to estimate the economic impacts of investment.

46
Modelinputs:Datacentrepipelineestimatesandscenarios
Scenarios 2024 2025 2026 2027 2028 2029 2030
High 505 766 1,123 1,650 2,338 3,454 5,137
Baseline 505 710 970 1,345 1,818 2,542 3,578
Low 505 638 806 1,021 1,299 1,660 2,137
Baseline scenario estimate:
• The baseline scenario is informed by Knight Frank’s Malaysia and Global Data
Centre reports. [a][b].
• The Malaysia report provides 2024 regional operating capacity and total pipeline
estimates (no timeline provided).
• Using capacity estimates from the global report, we calculated Johor’s CAGR from
2024 to 2026 and extended it to 2030.
• By 2028, the projection reaches the combined 2024 capacity and pipeline
estimate for Johor. We assume the pipeline will be fully delivered by 2028.
• We estimated different CAGRs for other regions using this method. The
CAGRs vary due to different 2024 operational capacities and pipeline size.
• Using this approach, we estimate that Malaysia’s MW capacity could reach 3.6GW
by 2030.
Table: Data centre operational capacity and pipeline by scenario in MW (2024 to 2030)
In our baseline scenario, we estimate Malaysia’s data centre capacity to increase from 505MW in 2024 to
3,578MW by 2030.
High and low scenario rationale:
• The high and low scenarios are based on estimated rejection rates for data centre
proposals in Malaysia.
• With ~30% of Johor projects reportedly denied in 2024 and little data for other
regions, we apply a similar rate nationwide.
• The baseline scenario assumes 70% of the 2024 proposals are completed, while
the high and low scenarios assume 90% and 50% acceptance, respectively.
• Drawing on 2024 regional operational data from Knight Frank’s Malaysia report, we
estimated the average MW per data centre by region.
• Applying our 2028 pipeline delivery assumption, we projected the number of data
centres and average MW per project.
• We then calculated regional CAGRs (2024 to 2028) and extended them to 2030
to estimate capacity under each scenario.
• Using this approach, we estimate that Malaysia’s data centre capacity could reach
5.1GW by 2030 under the high scenario and 2.1GW under the low scenario.
Applying these pipeline assumptions to our model provides the best estimate of Malaysia’s data centre landscape under different scenarios. The baseline reflects a continuation of
current and past trends, while high and low scenarios capture potential variations in growth. This enables us to estimate impacts on economic indicators such as economic output
and employment per scenario using our bespoke input-output model.
Sources: [a] Malaysia Data Centre Research Report - 2024 | Knight Frank Research [b] data-centres-global-forecast-report-2025-11877.pdf

47
Modelinputs:Capitalandoperatingcosts
Our model incorporates a CAPEX cost of $8.8m per MW and an OPEX cost of $1.4m per MW.
Source Value ($m/MW)
Cushman and Wakefield - APAC data
construction cost guide[a] 8.8
Table: Capital Costs (CAPEX) Our key capital cost assumption, expressed in $ million per MW, is drawn from
Cushman & Wakefield’s 2025 Data Centre Construction Cost Guide. The report offers
a detailed regional breakdown of construction costs for data centres in locations such
as Johor Bahru, Kuala Lumpur, and Selangor. It accounts for factors like construction
cost inflation, local FX rates and provides cost scenarios by data centre type (e.g.
hyperscale, retail colocation), capacity (MW), and site size (acres). Overall, it delivers
a reliable average construction cost per MW for data centres in Malaysia.
Source Type of cost Total cost ($m) Cost per MW ($m/MW)*
Maybank ASEAN Data Centre Report[b]
*Notes 2028 data centre capacity in the
ASEAN region is expected to reach 3,923MW
Annual utility spend 1,859 0.50
Annual utility spend as a % of total OPEX 35% 35%
Annual OPEX 5,311 1.4
Table: Operating Costs (OPEX)
Drawing on Maybank’s estimates for annual OPEX in the ASEAN region, we estimate that approximately 35% of OPEX in the Malaysian context is attributable to utilities. Based on
this, we estimate total annual OPEX to be around $1.4m per MW. To illustrate, a 50MW data centre in Malaysia could incur annual operating costs of approximately $70 million.
Sources: [a] APAC Data Construction Cost Guide 2025 [b] Maybank

48
Modelinputs:Capitalandoperatingjobs
Source Jobs per MW
Turner Construction / Cushman & Wakefield 18
Table: Capital jobs (per MW)[a][b]
Notes [1] The definition of a knowledge worker provided by the Malaysian government: Microsoft Word - PU_A_344 of 2010 - English.doc [2] Drawing on US based CAPEX and OPEX job multipliers in the literature, we applied job constraints to
refine our employment assumptions and estimates. Based on the capital intensity of data centres, Malaysian spending patterns do not accurately reflect the employment intensity of annual data centre operations. Applying constraints
provides more realistic projections of total and knowledge worker job creation associated with data centres in Malaysia for 2024 to 2030. This allows us to more accurately estimate the level of job creation by scenario.
Sources: [a] Turner Construction: Turner Construction Company to Build Hyperscale Data Center for Meta in Indiana | Insights | Turner Construction Company [[b] Cushman & Wakefield: Data Center Development Cost Guide 2025 [c] The Edge
Malaysia: My Say: Data centres: Strategic trade-offs and the promise of high-value jobs
Our estimate of capital jobs per MW is informed by data from Meta’s hyperscale
data centre investment in Indiana in the US., which involved approximately $800
million and supported around 1,250 construction jobs during the build
phase. Using an average US capital expenditure cost of $11.7 million per MW,
we infer a facility size of 68 MW.[b] This translates to around 18 direct
construction jobs per MW of installed capacity.
Metrics Assumptions
Data centre campus (MW) 500
Collecive Workforce (operations) 726 1,023
Of which knowledge workers 198 330
Collective jobs per MW (Collective workforce/MW) 1.5 2.0
Knowledge workers per MW (Of which knowledge workers/MW) 0.4 0.7
Non high-value operational jobs per MW 1.1 1.4
Table: Operating jobs (per MW)[1][2][c]
Based on estimates for operational employment in a 500MW data centre in Malaysia, we estimate that an average of 2 employees per MW once a data centre becomes operational,
with approximately 0.7 of these considered knowledge workers. Knowledge workers in this context refer to IT operations roles such as server managers, network engineers,
cybersecurity analysts and similar positions. Using these assumptions, we can estimate the total number of operational jobs supported by Malaysia’s data capacity, including the
share of knowledge workers, both currently and over the 2025-2030 period.
Our model assumes 18 capital jobs per MW and 2 operational jobs per MW.

49
Modelinputs:Knowledgejobssectorallocation
We estimate that ~53% of high-value workers operating within the data centre ecosystem qualify as
knowledge workers.
Type of knowledge worker % with degree qualification % aged 35 and over [a] % of knowledge workers
Average % of knowledge
workers
Managers
80%
76% 61%
53%
Professionals 64% 51%
Technicians and associate
professionals
58% 46%
Table: Percentage split of knowledge workers by role[1][a]
Using our inputs for capital and operational jobs per MW (as detailed on pg. 48), we estimate the total employment of the data centre ecosystem in Malaysia-including direct,
indirect, and induced jobs. From this, we estimate the share of total employment attributable to jobs in high-value sectors such as IT, fintech and engineering. We assume that these
sectors are primarily made up of skilled workers including managers, professionals, technicians and associate professionals. Drawing on data from the Department of Statistics
Malaysia, we estimate that approximately 80% of workers in these roles hold a college, university or equivalent qualification. Within this group, we further estimate that
around 53% qualify as knowledge workers, based on the Malaysian government’s classification.[1]
In our model, these knowledge workers are distributed across a range of sectors, including – but not limited to-information technology and services, telecommunications,
financial and insurance activities, and professional, scientific, and technical services.
As Malaysia’s data centre capacity continues to expand, the sector is expected to play a key role in enabling broader industries such as finance and healthcare. This growth will
likely drive an increase in the number of knowledge workers across the wider value chain, both directly and indirectly linked to the data centre ecosystem. The above values enable
us to project the potential growth of knowledge workers under various growth scenarios, while also highlighting opportunities for growth across both and emerging and established
sectors across the data centre ecosystem.
Sources: [a] Department of Statistics Malaysia (DOSM)
Note: [1] A knowledge worker is defined as a qualified person who (1) holds a degree in any professional or technical field from a college, institution or university recognised by the Government of Malaysia and has at least ten years
experience in any of the qualified activities; or (2) holds a doctoral degree and has at least five years working experience in any of the qualified activity: Microsoft Word - PU_A_344 of 2010 - English.doc.

51
Sourcesusedinreport(1/4)
Sources directly used in this report are listed below.
Sources
• Agency of Natural Resources and Energy India: 7th_outline.pdf
• AP News: Ireland embraced data centers that the AI boom needs. Now they're consuming too much of its energy | AP News
• CBRE Investment opportunities in APAC: Navigating Data Centres: Seizing investment opportunities in APAC | CBRE
• CBRE Japan: CBRE Strengthens Data Center Real Estate Services | CBRE CMS Japan
• CCS & Co Malaysia Digital Bill of Guarantees: Microsoft Word - MD BOG Explanatory Notes based on approved MSC BOG in 2014_clean.doc
• CETAS: Japan’s Chip Challenge: Semiconductor Policy for the Data Centre Era | Centre for Emerging Technology and Security
• Cushman & Wakefield APAC Data Centre report: APAC Data Centre Update: H2 2024 | SG | Cushman & Wakefield
• Cushman & Wakefield Data Centre Construction Cost Guide: APAC Data Centre Construction Cost Guide | Cushman & Wakefield
• Crowe Malaysia Malaysia’s Digital Status: Malaysia Digital Status: Tax Incentives | Crowe Malaysia PLT
• Data Centres Ireland: Data Centres: A Cornerstone of Ireland’s Foreign Direct Investment and Economic Growth - A view from Jason O'Conaill, Industry Expert - DataCentres
Ireland 2025
• DataCentre Magazine Microsoft Data Centre Hub in Johor: Microsoft to Expand Data Centre hub in Johor, Malaysia | Data Centre Magazine
• DC Byte: DC Byte: Data Centre Market Overview
• Department of Financial Services India: Critical Information Infrastructure (CII) | Department of Financial Services | Ministry of Finance | Government of India
• Department of Statistics Singapore: Number Of Full-Time ITE Students Intake By Sex, Annual | SINGSTAT | data.gov.sg
• Department of Statistics Singapore: Singapore Department of Statistics (DOS) | SingStat Table Builder
• Digital News Asia: Shaping the future of data centers in Malaysia | Digital News Asia
• Economic Times India – various reports
• Enterprise Ireland: Helping Irish Business Go Global | Enterprise Ireland
• Environmental and Energy Study Institute (EESI): Data Centers and Water Consumption | Article | EESI
Appendix 4: Sources

52
Sources
• Government of Ireland Department of Business: government-statement-data-centres-enterprise-strategy.pdf
• Hanley Energy: Global turnkey data center solution providers | Hanley Energy
• Infocomm Media Development Authority (IMDA): Advisory Guidelines for Cloud Services and Data Centres | IMDA
• International Trade Administration: Ireland - Digital Economy
• Invest KL Malaysia: Malaysia attracts UDS 24.1 bn in data centre investment since 2021 –Malaysia Attracts USD 24.1 Billion in Data Centre Investments Since 2021 - Relevant
News | InvestKL
• Irish Times: Data centres could use 70% of Ireland’s electricity by 2030, committee to hear – The Irish Times
• IT News ASIA: Microsoft sets up its first Asian data centre academy with ITE – Microsoft sets up its first Asian data centre academy with ITE - Data Centres - Software - iTnews
Asia
• JETRO: Section6. Subsidy for Development of Regional Data Centers | Chapter3. Recent Government Measures - JETRO Invest Japan Report 2023 - Reports - Why Invest -
Investing in Japan - Japan External Trade Organization – JETRO
• JLL: India's Data Centres: 77% Growth to 1.8 GW by 2027
• KPMG Malaysia Base Erosion and Profit Shifting (BEPS): - KPMG Malaysia
• Knight Frank Global Data Centre report: data-centres-global-forecast-report-2025-11877.pdf
• Knight Frank Malaysia Data Centre report: KFM_DC Whitepaper Report_2024.pdf
• Linux Foundation: lfr_techtalent_jp2025_052325.pdf
• Mason Hayes & Curran: Data Centres in Ireland – Energy Concerns | Mason Hayes Curran
• Maybank ASEAN Data Centre report: ASEAN Data Centre report
• Mayer Brown: Singapore's Green Data Centre Roadmap
• METI: Japan’s Initiatives for Interoperable Data Infrastructures Officially Named “Ouranos Ecosystem”
Appendix 4: Sources

53
Sources
• METI: Publicizing the Report by the Study Group on the Development of Digitally Skilled Workforce for the Era of Society 5.0: For Skills-Based Workforce Development
• Microsoft AI-powered data centres in Malaysia: Why Malaysia needs datacenters for an AI-powered future - Source Asia
• MIDA: Riding the data centre wave - MIDA | Malaysian Investment Development Authority
• MIDA JS-SEZ: Iskandar Malaysia: The Cornerstone of The Johor-Singapore Special Economic Zone - MIDA | Malaysian Investment Development Authority
• MIDA Green incentives: HORIZONTAL of Green Incentives Budget 2024
• Ministry of Economy National Energy Transition Roadmap: National Energy Transition Roadmap_0.pdf
• Ministry of Housing and Local Government Data Centre planning guidelines: – Ministry of Housing and Local Government Presentation
• Ministry of Information and Broadcasting Government of India: doc2022128141601.pdf
• Mordor Intelligence: Indonesia Data Centre Size & Share Analysis – Growth Trends & Forecasts up to 2030: Indonesia Data Center Market Size & Share Analysis - Industry
Research Report - Growth Trends
• Mordor Intelligence: Singapore Data Centre Size & Share Analysis – Growth Trends & Forecasts up to 2030: Singapore Data Center Market Size & Share Analysis - Industry
• Mordor Intelligence: Malaysia Data Centre Size & Share Analysis – Growth Trends & Forecasts up to 2030: Malaysia Data Center Market Size & Share Analysis - Industry
• OECD: Digital | OECD
• Open Gov Asia Malaysia Tax incentives to Boost Digital Economy: Malaysia: Tax Incentives to Boost Digital Economy – OpenGov Asia
• Reuters Google Data Centre investment: Google to invest $2 bln in data centre and cloud services in Malaysia | Reuters
• Research and Markets APAC Data Centre report (2025 - 2030): APAC Data Center Colocation Market - Forecasts from 2025 to 2030
• Rest of World Malaysia’s new data centres create thousands of jobs: Malaysia’s data center boom fuels jobs and environmental concerns - Rest of World
• Savills: acr---jp-data-ctr-1h-2023.pdf
Appendix 4: Sources

54
Sources
• Singapore Business Review: Data centre operators turn West amidst Tai Seng space crunch | Singapore Business Review
• Skrine Investment in Data Centres in Malaysia: Skrine - Advocates & Solicitors
• Tenaga Nasional Green Lane Pathway: tnb.com.my/announcements/tnb-establishes-exclusive-green-lane-pathway
• The Times: How Irish companies built the cloud — and billions rained down
• World Bank Group: Digital: Development news, research, data | World Bank
• YTL Data Centers Data Centre locations Malaysia: Malaysia - YTL Data Center Holdings Pte. Ltd.
Appendix 4: Sources

55
Additionalsourcesusedtoinformthereport(1/3)
Sources
• Access Partnership Economic Impact of Generative AI: The Economic Impact of Generative AI: The future of work in Malaysia - Access Partnership
• Amazon Data Centre Investment: Amazon data center investment: local jobs, education, sustainability
• ARC Group ASEAN’s Data Center Boom: Harnessing ASEAN’s Data Center Boom- ARC Group
• Bain & Company Southeast Asia’s Green Economy 2025 Report: Southeast Asia's Green Economy 2025 Report | Bain & Company
• Bernama Google Data Centre investment in Malaysia: BERNAMA - Google To Invest Rm9.4 Bln In Malaysia, Support Over Rm15.04 Bln In Positive Economic Impact
• BloombergNEF Malaysia Power Generation: BNEF
• Customedia Academy JS-SEZ: JS-SEZ Explained: A Potent Catalyst for Digital Infrastructure – Custommedia Academy
• DCByte 2024 Global Data Centre Index: 2024 Global Data Centre Index | DC Byte
• Department of Statistics Malaysia (DOSM) Latest Data: DOS | SingStat Website - Latest Data
• Department of Statistics Malaysia (DOSM) Population: Population Table: Malaysia | OpenDOSM
• Department of Statistics Malaysia (DOSM) Water Consumption: Water Consumption by State and Sector | data.gov.my
• Digital Infra Network: Google Malaysia data centre power and water efficiency: Google's Malaysia data centre redefines power and water efficiency | Digital Infra Network
• Economist Intelligence Unit (EIU) Economic Growth Malaysia: Economic growth | Country Report | EIU
• Edge DC Fibre-Optic: Fiber Optic: The Key to High-Speed Connectivity for Indonesian Data Centers
• Energy Information Administration (EIA) Country Analysis Malaysia: Country Analysis Brief: Malaysia
• Emir Research Malaysia Data Centre Boom: Malaysia’s Emerging Data Centre Boom: Seizing Opportunities and Powering a Sustainable Future
• Fast Company Risks for data centre boom in Malaysia: Why Malaysia's bets on data centers is risky - Fast Company
• Forbes Google Gamuda data centre development: Google Doubles Down On Malaysia With $236 Million Data Center Deal Awarded To Gamuda
• Halim Hong & Quek (HHQ) Corporate Investments in Malaysia’s Data Center Sector: The Ultimate Guide to Corporate Investments in Malaysia’s Data Center Sector: Strategies
and Opportunities Explained – HHQ
Sources consulted to inform messaging in this report are listed below.
Appendix 4: Sources

56
Sources
• Infocomm Media Development Authority Singapore Digital Economy Reports: Singapore Digital Economy Reports | IMDA
• International Energy Agency (IEA) Electricity 2024: Electricity 2024 - Analysis and forecast to 2026
• International Trade Administration (ITA) Malaysia Digital Economy: Malaysia - Digital Economy
• IPM Due Dilligence study for data centre development in Malaysia: Due-Diligence-Study-for-Data-Centre-Development-in-Malaysia.pdf
• IRENA Malaysia Energy Transition Outlook: Malaysia energy transition outlook
• Iskandar Regional Development Authority JS-SEZ: Iskandar Regional Development Authority
• JLL 2025 Global Data Center Outlook: 2025 Global Data Center Outlook
• JLL Growth of AI data centers: Growth of AI creates unprecedented demand for global data centers
• Kearney Analysis How data center operators can win in Southeast Asia: How data center operators can win in Southeast Asia | Kearney
• Khazanah Research Institute Energy and Ecological Impacts of Data Centres: Views
• LowCarbonPower Electricity in Malaysia in 2024: Malaysia Electricity Generation Mix 2024 | Low-Carbon Power Data
• Mandala Empowering Australia’s Digital Future: Empowering Australia's Digital Future
• MDEC Malaysia Digital: Malaysia Digital | MDEC
• MIDA JS-SEZ data centre opportunities: JS-SEZ offers data centre opportunities by the bucketful - MIDA | Malaysian Investment Development Authority
• MIDA Malaysia data centre growth in 2025: Malaysia set for booming data centre growth in 2025 - MIDA | Malaysian Investment Development Authority
• MIDA Data centre players pour in investments: Data centre players pour in investments - MIDA | Malaysian Investment Development Authority
• MIDA Digital Ecosystem Acceleration Scheme (DESAC): DESAC-Guideline_MIDA.pdf
• MIDA Google’s Malaysia data centre sets new standard for power and water usage: Google’s Malaysia data centre sets new standard for power, water usage efficiency - MIDA |
Malaysian Investment Development Authority
Appendix 4: Sources

57
Sources
• MIDA Green Lane Pathway: Malaysia launches green lane pathway to propel digital, manufacturing powerhouse ambitions - MIDA | Malaysian Investment Development
Authority
• MIDA Malaysia Investment Performance Report 2024: MIDA_IPR-2024_SP_Screen.pdf
• MIDA Sustainable Infrastructure, Local impact: Sustainable Infrastructure, Local Impact - MIDA | Malaysian Investment Development Authority
• Ministry of Investment, Trade and Industry Cabotage Policy: Ministry of Investment, Trade and Industry
• Ministry of Investment, Trade and Industry GIS Summary: PowerPoint Presentation
• Ministry of Investment, Trade and Industry New Industrial Master Plan 2030: FA-Summary NIMP 2030_v2
• Ministry of Economy MyDigital Malaysia Digital Economy Blueprint: Malaysia Digital Economy Blueprint
• Savills Annual Report and Accounts 2024: SAVILLS AR24 Suruhanjaya Tenaga Guidelines for Corporate Renewable Energy Supply Scheme (CRESS): Guideline for CRESS
(First Edition Sept 2024)_.pdf
• Techerati Data Centres: Enables of the Digital Economy: Data centres: Enablers of the Digital Economy – Techerati
• The Straits Times ASEAN trade: Asean has reached ‘consensus’ on trade, US tariffs and power grid ahead of summit: Anwar | The Straits Times
• The Straits Times Johor rejects data centre applications: Johor rejects nearly 30% of data centre applications to protect local resources | The Straits Times
• Uptime Institute Global Data Center Survey 2024: Uptime Institute Global Data Center Survey 2024 | Uptime Intelligence
• Vantage Data Centres Data Centre Campus Cyberjaya: Vantage Data Centers Breaks Ground on 256MW Cyberjaya Campus - Vantage Data Centers
• W.media Kedah the next data centre hub in Malaysia: Kedah Poised to Become the Next Data Center Hub in Malaysia? – W.Media
Appendix 4: Sources

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