Malaysia's data centre capacity poised for four-fold surge

KUALA LUMPUR: Malaysia's data centre capacity is set to nearly quadruple by the end of the year, according to Juwai IQI. Its co-founder and group chief executive officer, Kashif Ansari, shared that developers are incorporating sustainability and social measures to decrease water and energy use. Local content requirements are boosting Malaysia's economy.

The company anticipates operating data centres in Malaysia to reach around 2,055 megawatts (MW) by year-end, a four-fold increase from the 522 MW operational in the first quarter of 2025. The international real estate technology group predicts eight to nine gigawatts (GW) will be added to Malaysia's capacity by 2030. Unlike in certain markets with speculative building before customer contracts, most new data centres in Malaysia already have confirmed users.

Pre-leased capacity in the nation has risen from approximately 0.85 GW in the first half of 2025 to 1.2 GW in the first half of 2025, making Malaysia the second-largest in the Asia Pacific after Japan. The Malaysian industry is considered robust and well-regulated. A public demand for data centres to create more jobs and income for Malaysians has led Selangor to require new data centres to employ 30% Malaysian firms in their installations.

At the federal level, Malaysia encourages local content use through tax incentives, and the government has ceased approving non-AI, non-hyperscale-grade, non-high-efficiency projects. These factors attract the right kind of data centre developers, contributing to Malaysia becoming Southeast Asia's largest data centre market by 2030 and significantly more sustainable than today.