Market Trends of Malaysia Data Center Networking Industry
Telecommunication Holds the Major Share.
- Malaysia is going through an extended negotiation phase in the telecom sector. The two sides here are the government and the four main operators in the Malaysian telecom landscape: Maxis Berhad, Celcom Axiata Berhad, Digi Telecommunications, and U Mobile. In 2022, these four operators have requested a review of the government’s 5G access offer as they want at least a 51% stake in the government-owned 5G agency DNB.
- The development of digital infrastructures, such as data centers, is central to enabling 5G applications. With this, various investors are signing an agreement for the 5G launch. For instance, in November 2022, Malaysian telcos Celcom and DiGi approved the merger agreement. Once the two companies are fully merged, the new entity will be one of the largest carriers in Malaysia, with over 20 million subscribers.
- In context to data center investment for telecom, in the recent past, TM ONE, a business unit of state-controlled telecommunications company Telekom Malaysia, invested up to MYR 300 million (USD 70.94 million) for the development of a data center in Johor Bahru to cater to a growing demand from foreign entities. The facility is currently constructed as a core data center. With the growing scope of 5G in Malaysia, the data flow will increase exponentially, catering to the need for colocation.
- 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 (USD 31.88 Million) on the country’s GDP and create 750,000 jobs.
- Moreover, rising smartphone users coupled with discounted internet services and the increasing data traffic per smartphone drive the demand for telecom services, creating more need for data storage space and leading to rising demand for data center networking solutions in the region.
Understand The Key Trends Shaping This Market
Download PDF
Ethernet Switches Holds Largest Market Share
- Datacenter Ethernet switches are network devices that operate in a data center environment. In order to facilitate the efficiency and rapid transfer of data, they play an essential role in establishing interconnection between servers, storage devices, or other network equipment at a data center. Switches are designed for high-speed data transmission with support for gigabit and multigigabit Ethernet, including 10 GbE, 25 GbE, 40 GbE, 100 GbE, and beyond.
- Malaysia has actively promoted Digital Transformation in different sectors such as finance, healthcare, and education. The core of this transformation is data centers, and connecting servers, storage, or networking equipment at those facilities requires an Ethernet switch.
- In order to process data quickly and reliably, there is a need for more effective connectivity in data centers as demand for data increases. Data center operators can achieve the highest possible data transfer speed and low-latency transmission by using Ethernet switches.
- Malaysia is becoming a regional hub for many businesses, which is driving more organizations to invest in cloud systems, which are, in turn, driving the need for more local data centers. The new government hybrid cloud service, called MyGovCloud, will be a combination of both private cloud services from PDSA and public cloud from a cloud service provider (CSP).
- The Malaysian Investment Development Authority (MIDA) plans to continue to attract quality investments with greater specialization in eight strategic and high-impact sectors under the 12th Malaysia Plan (12MP), including E&E, global services, aerospace, and smart farming. Such developmental aspects are expected to further complement the growth of the data centers in the region and substantiate the growth of network devices and services in the market.
- The key players in the market focus on updating the network devices to meet the market demand. In August 2023, H3C launched a new generation of data center switches, the S9827 series, the first 800G product built on CPO silicon photonics technology, boasts a single-chip bandwidth of up to 51.2T, supporting 64 800G ports, achieving an 8-fold throughput increase over 400G products. This design is based on advanced technologies, including liquid cooling and intelligent lossless operations that lead to an extremely widespread, low latency, energy-efficient smart network.
