Malaysia Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Malaysia Data Center Market Analysis

The Malaysia Data Center Market size is estimated at 1.26 thousand MW in 2025, and is expected to reach 2.53 thousand MW by 2030, growing at a CAGR of 15.01%. Further, the market is expected to generate colocation revenue of USD 710 Million in 2025 and is projected to reach USD 1,873.2 Million by 2030, growing at a CAGR of 21.41% during the forecast period (2025-2030).

The Malaysian data center landscape is experiencing significant transformation through infrastructure modernization and certification upgrades. As of 2022, the country housed 42 Tier 3 data center facilities, demonstrating the industry's commitment to maintaining high operational standards and reliability. The emphasis on tier certification reflects the growing sophistication of Malaysia's digital infrastructure, with data center infrastructure being designed to ensure concurrent maintainability and minimal disruption during maintenance activities. This trend is further evidenced by the ongoing construction of 12 new data center facilities across the country, indicating robust expansion of the infrastructure backbone.

Geographic distribution of data centers in Malaysia shows strategic concentration in key digital corridors. Data center Cyberjaya has emerged as the premier data center hub, hosting 70.6% of the country's Tier 3 certified facilities, leveraging its position within the Multimedia Super Corridor. The development of new digital districts, such as the Johor Digital District, is creating additional technology ecosystems that enable collaboration between multinational companies and startups. These digital corridors are being supported by comprehensive infrastructure development, including advanced connectivity solutions and purpose-built facilities.

Industry consolidation and strategic partnerships are reshaping the competitive landscape. A notable development in late 2022 was the merger approval between Malaysian telcos Celcom and DiGi, which is set to create one of the country's largest carriers with over 20 million subscribers. This consolidation trend is complemented by increasing collaboration between local and international players, as evidenced by partnerships between Malaysian authorities and global cloud providers to accelerate public sector cloud adoption. The Public Sector Data Center (PDSA) has already demonstrated significant progress, having installed over 1,000 servers supporting 120 government agencies.

Sustainability initiatives and government support are driving the next phase of market development. The Malaysian government has implemented attractive incentives, including the Green Investment Tax Allowance (GITA) offering 100% of qualifying capital expenditure for three years, offset against 70% of statutory income. These initiatives are encouraging the development of green data centers and sustainable infrastructure. The data center industry is responding with innovative approaches to energy efficiency, with several new facilities incorporating renewable energy solutions and advanced cooling systems to minimize environmental impact while maintaining operational excellence.

Malaysia Data Center Market Trends

Growth in digital consumers boost the data center demand in country

• The total number of smartphone users in the country was 29.46 million in 2022. This is expected to witness a CAGR of 1.43% during the forecast period, reaching 32.54 million by 2029.
• According to Google's research findings regarding mobile searches in Malaysia, a share as high as 52% of the population use mobile phones to search, 36% use their computers or laptops, and 12% use tablets. Thus, a staggering 64% of the searches performed in Malaysia are through mobile devices. Due to the COVID-19 pandemic and the strict enforcement of MCO, which included remaining indoors at all times, internet traffic in Malaysia recorded a 23% increase in the first week of March 2020. While the second week saw an 8.6% increase, complaints of slow internet speeds also began emerging. This could be due to the growing number of active internet users.
• Malaysia added three million new digital consumers between the pandemic's start in 2020 and the first quarter of 2021. Considering that 55.9% of e-commerce transactions in Malaysia are completed on a mobile device, the growing smartphone penetration means more people will opt to shop online over the coming years, according to the Digital 2022-Malaysia report.

Expansion of 5G and rising mergers between companies such as Malaysian telcos Celcom and DiGi increase data center facilities in Malaysia

• Major telecommunication operators in Malaysia include Celcom, Digi, Maxis, U Mobile, Telekom Malaysia, and Time dotCom. In terms of actual geographical mobile network coverage in Malaysia, Celcom is ranked first, with 9.2 out of 10 points, followed by Digi and Maxis, which have 8.6 points each, followed by U Mobile with 7.7 points and Unifi with 7.0 points.
• Ericsson is at the forefront of 5G services in Malaysia, where it is working closely with Digital Nasional Berhad to deliver a world-class 5G network for Malaysia. 5G will serve as the catalyst for Malaysia’s digital transformation and provide the platform for IR4.0. Currently, the government has identified 700MHz, 3.5GHz, and 26/28GHz as the pioneer spectrum bands for the roll-out of 5G in Malaysia.
• Malaysian telcos Celcom and DiGi have also approved a merger agreement. Once the two companies are fully merged, the new entity will be the largest carrier in Malaysia, with over 20 million subscribers. The company also said that the implementation of 5G technology would have a positive impact of MYR 150 billion on the country’s GDP and create 750,000 jobs.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: By Hotspot

Rest of Malaysia Segment in Malaysian Data Center Market

The Rest of Malaysia segment, which includes key regions like Johor Bahru and George Town, dominates the Malaysian data center market with approximately 56% data center market share in 2024, representing an IT load capacity of 402.09 MW. This segment is also experiencing the most rapid growth, projected to expand at around 25% CAGR from 2024 to 2029. The Johor Digital District has emerged as a dynamic tech ecosystem spread between Johor Bahru and Iskandar Puteri, enabling multinational companies to work alongside startups. The majority of startups are recording significant growth in Johor Bahru, positioning it as a major upcoming hotspot likely to compete with the Cyberjaya-Kuala Lumpur region. George Town is evolving as a major digital transformation hub, with the government's creative digital district (CD Square) initiative aimed at attracting digital companies and creating high-income jobs in the technology sector.

Cyberjaya-Kuala Lumpur Segment in Malaysian Data Center Market

The Cyberjaya-Kuala Lumpur hotspot represents a significant portion of Malaysia's data center market, holding approximately 44% data center market share in 2024. This region is primarily considered under the Multimedia Super Corridor, which has been revamped as Malaysia Digital, serving as the new national strategic initiative to encourage and attract companies, talents, and investments to Malaysia's digital economy. Cyberjaya stands out as a major city, with most of its data centers offering colocation facility solutions. The city's vast land availability makes it an ideal location for industry players. Meanwhile, Kuala Lumpur's growth transformation strategy involves pivoting toward next-generation digital industries, with prominent multinational corporations relocating their Asia-Pacific 'high-value, high-impact' central operating models to the city, leveraging Industry 4.0 technologies and the ICT talent pool.

Segment Analysis: By Data Center Size

Mega Segment in Malaysia Data Center Market

The mega segment dominates the Malaysia data center market, commanding approximately 64% of the total IT load capacity in 2024. With a substantial capacity of around 453 MW, mega data centers have established themselves as the cornerstone of Malaysia's digital infrastructure. Currently, there are four mega data centers operating in the country, with several providers like CSF Group, Bridge Data Center, and GDS Holdings Ltd constructing upcoming facilities. The segment's growth is significantly supported by the increasing adoption of renewable energy, with renewables currently contributing about 18% to Malaysia's energy mix, predominantly through hydropower technologies which account for 86% of renewable capacity. The mega data center construction developments are witnessing substantial investments, particularly in the Cyberjaya-Kuala Lumpur and Johor Bahru regions, driven by the rising demand for hyperscale facilities and the government's supportive policies for large-scale digital infrastructure.

Growth Trajectory of Mega Data Centers in Malaysia

The mega data center segment is experiencing remarkable growth and is projected to maintain its momentum with approximately a 24% growth rate from 2024 to 2029. This exceptional growth is primarily driven by the increasing demand for hyperscale facilities and the adoption of advanced technologies. Major industry players are making significant investments in this segment, with several new facilities under construction. For instance, Yondr Group has announced plans for a 200 MW hyperscale campus to be developed on 72.8 acres of land in Malaysia. The segment's growth is further supported by the country's favorable investment climate, including tax benefits and incentives for large-scale data center developments, particularly in free trade zones. The increasing adoption of cloud services, digital transformation initiatives, and the growing need for high-capacity data processing capabilities are also contributing to the segment's rapid expansion.

Remaining Segments in Data Center Size Market

The Malaysian data center market encompasses several other segments, including large, medium, massive, and small data centers, each serving specific market needs. The large segment maintains a significant presence, particularly in the Cyberjaya-Kuala Lumpur region, catering to enterprises requiring substantial but not hyperscale infrastructure. Medium-sized facilities primarily serve regional businesses and government organizations, offering balanced capacity and cost-effectiveness. The massive segment focuses on serving specific industry verticals with specialized requirements, while small data centers cater to local businesses and edge computing needs. These segments complement each other, creating a diverse ecosystem that supports various business requirements and technological needs across different scales of operation.

Segment Analysis: By Tier Type

Tier 3 Segment in Malaysia Data Center Market

The Tier 3 data center segment dominates the Malaysian data center market, accounting for approximately 81% of the total IT load capacity in 2024. This significant market share is driven by the segment's ability to provide concurrent maintainability, allowing for any planned maintenance activity of power and cooling systems without disrupting computer hardware operations. Most telecom operators prefer establishing Tier 3 data centers as they prevent uneven disturbances and provide enhanced reliability. The segment's prominence is further strengthened by its widespread adoption in Cyberjaya, which hosts the maximum number of Tier 3 data centers with a 70.6% share, followed by strategic locations in Kuala Lumpur, Johor Bahru, and George Town. Major industry players like VADS BERHAD, Open DC Sdn Bhd, and NTT Ltd have established multiple Tier 3 certified facilities across these locations, contributing to the segment's market leadership.

Tier 1 & 2 Segment in Malaysia Data Center Market

The Tier 1 & 2 segment is emerging as the fastest-growing segment in the Malaysian data center market, projected to expand at approximately 23% CAGR from 2024 to 2029. This growth trajectory is particularly noteworthy given the segment's relatively smaller base, indicating increasing demand for basic data center infrastructure among certain business segments. The segment's growth is supported by its cost-effectiveness and suitability for organizations with less critical data storage needs. Despite the market's general preference for higher tier facilities, Tier 1 & 2 data centers are finding their niche among smaller enterprises and specific applications where basic infrastructure suffices. The segment's expansion is also facilitated by the Malaysian government's digital transformation initiatives and support for diverse data center solutions across different tier levels.

Remaining Segments in Tier Type Segmentation

The Tier 4 data center segment represents the highest level of data center certification, offering the most robust infrastructure with complete fault tolerance and redundancy. Currently, only a select few companies, including TelcoHubeXchange and Regal Orion Sdn Bhd, operate Tier 4 certified facilities in Malaysia. These facilities cater to organizations with mission-critical operations requiring the highest levels of reliability and uptime. While the segment maintains a smaller market share compared to Tier 3, it plays a crucial role in serving enterprises with zero-tolerance for downtime, particularly in the financial services and critical infrastructure sectors. The segment's development is characterized by sophisticated infrastructure investments and stringent certification requirements, making it a specialized but essential component of Malaysia's data center ecosystem.

Segment Analysis: By Absorption

Free With This Report

We provide a complimentary and exhaustive set of data points on the country and regional level metrics that present the fundamental structure of the industry. Presented in the form of 50+ free charts, the sections cover difficult to find data on various countries on smartphone users, data traffic per smartphone, mobile and broadband data speed, fiber connectivity network, and submarine cables.