Peninsular Malaysia power use seen up 4.9% in 2027 on data centre growth

Malaysia's data centre market is transitioning towards higher-value, AI-focused deployments, with Johor remaining the dominant hub despite growing power constraints. According to BMI, a unit of Fitch Solutions, the country currently has 125 data centre facilities, with 925.6 megawatts (MW) of live capacity, 2.0 GW under construction, and a planned pipeline of 3.1 GW, largely concentrated in Johor.

The market's growth has been driven by its proximity to power-constrained Singapore, but demand has expanded due to hyperscaler commitments, local enterprise workloads, cloud adoption, and policy initiatives under the MyDigital blueprint. Large AI-focused proposals have secured approvals since 2024, pushing the market towards higher-value, capital-intensive deployments dominated by private-equity-backed platforms.

Power remains a binding constraint, with grid bottlenecks, new tariffs above 100 MW, and stricter sustainability screening raising execution risk and encouraging diversification into Thailand and Vietnam.

Brief written by urgent.news from New Straits Times's own syndicated text. Machine-written — may contain errors; check the original before relying on it.