Malaysia's data centre boom opens up to RM162bil M&E market
KUALA LUMPUR: Malaysia’s cumulative data centre capacity pipeline could reach eight to nine gigawatts (GW) by 2030, translating into a RM128 billion to RM162 billion total addressable market for the domestic mechanical and electrical (M&E) sector.
KUALA LUMPUR: Malaysia's data centre capacity pipeline may expand to eight to nine gigawatts by 2030, generating a RM128 billion to RM162 billion market opportunity for the local mechanical and electrical sector, according to CIMB Securities Sdn Bhd. The firm's latest report highlights the surge in demand, with 3.8GW of capacity under construction or secured by electricity supply agreements, and an additional 4GW to 5GW projected to be added by 2030.
The data centre boom is also stimulating growth in related supply chain sectors, benefiting local subcontractors and equipment manufacturers. The estimated capital value for M&E equipment and construction per megawatt ranges from RM16 million to RM18 million.
Despite the stability in cost per MW since the boom began, rising power intensity from advanced server designs is leading to larger job awards. Favorable localisation policies encouraging greater participation in the supply chain further bolster the market. Local players possess an edge over competitors, demonstrating agility in navigating complex regulations.
Kerbaya Prospek Group Bhd recently joined the competition by securing a large RM858 million contract for mechanical, electrical, and plumbing services in Iskandar Puteri. Some contractors are setting themselves apart by designing data centre campuses with integrated utility infrastructure, reducing risks and improving chances for repeat business. El Niño's effects on extreme weather and water availability are also impacting the industry, putting pressure on mechanical cooling systems and expanding M&E job scopes.
CIMB Securities maintains a neutral stance on the construction sector but views the data centre pipeline as a potential silver lining. The firm retains "Buy" recommendations for Gamuda Bhd and IJM Corp Bhd, citing the former's RM7 billion worth of data centre wins from its Springhill campus, and the latter's restructuring and potential dividend growth, driven by data centre progress billing.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
