Eye on SEA’s interconnected digital landscape

As Southeast Asia’s digital economy accelerates, Malaysia is well-positioned to become a key hub in the region’s interconnected digital ecosystem. With datacenter (DC) capacity that not only meets local demand but has the potential to serve broader regional needs, Malaysia has established a foundation to support extensive data processing and hosting for neighbouring nations. To maximise the impact of this infrastructure, datacenter operators should prioritise interconnectivity, ensuring that data moves seamlessly across borders with resilience, high performance, and cost efficiency.

By setting high standards for regional connectivity, Malaysia has a unique opportunity to lead Southeast Asia in cross-border digital collaboration, creating a model for efficient and sustainable growth. Additionally, by building expertise in this sector, Malaysia can drive broader economic benefits, enabling diverse industries to leverage advanced digital infrastructure. This strategic focus could enhance digital access and fuel innovation across Southeast Asia, making Malaysia a leader in the digital transformation of the region.

The rapid expansion of Malaysia’s datacenter infrastructure is positioning the country not only to fulfil its own digital needs but also to serve the entire Southeast Asia region. With a strategic overbuild that exceeds domestic demand, Malaysia is establishing itself as a digital powerhouse, ready to support regional connectivity across SEA.

To fully leverage this capacity, the growth of Malaysia’s DC industry needs to be supported by advanced interconnection solutions, like those provided by DE-CIX, one of the world’s leading Internet Exchange operators. By developing a robust interconnectivity framework, Malaysia can enable seamless, resilient, and cost-effective cross-border data flows, reinforcing its position as a central digital hub for Southeast Asia.

With an anticipated 4 GW of datacenter capacity expected to come online in Malaysia over the next four to five years, the country is on track to surpass Singapore as Asia’s largest datacenter hub. Leading this growth, Johor Bahru has rapidly become Southeast Asia’s fastest-growing DC market, with 1.6 GW of total capacity, bolstered by Nvidia’s substantial investment of approximately RM20.24 billion. This expansion supports key industries such as semiconductors, finance, e-commerce, telecommunications, and logistics, which are already well-established in Malaysia. By fostering local expertise and leveraging Malaysia’s industrial strengths, the country can create a more inclusive digital ecosystem that encourages innovation and growth across Southeast Asia.

With a network of over 7,000 individual data centres globally, the data infrastructure ecosystem is vast, yet Malaysia is positioned as one of the leading countries in SEA with significant contributions in the region’s data centre market. Malaysia currently boasts a total live IT capacity of approximately 280 megawatts (MW). Collaboration between datacenters, connectivity providers and Internet Exchanges (IX) is essential to maintain uninterrupted connectivity. While there are sizable datacenter facilities with IX points, Malaysia still has room to increase its number of IX meeting points to enhance data interconnectivity across the country. With a robust electricity infrastructure that ensures operational stability, Malaysia stands out as an ideal location for DC industry expansion within SEA.

The accelerating adoption of technologies like artificial intelligence (AI), 5G, and e-commerce reinforces the critical role of data centres across sectors. By 2028, Malaysia’s datacenter market is projected to generate approximately RM10 billion ($2.25 billion) in revenue. Additionally, Malaysia’s strategic submarine cable landings offer both efficient domestic and international connectivity, enabling its datacenter to complement major regional hubs with expanded peering, networking, and computational resources.

In summary, Malaysia is uniquely positioned to become a cornerstone of Southeast Asia’s digital infrastructure. With substantial DC capacity, proactive infrastructure planning, and strategic investments in connectivity, the country is equipped to support not only its own digital demands but also those of neighbouring countries. As technological advancements continue to reshape economies, Malaysia’s datacenter and interconnection capabilities will be instrumental in driving these transformations. By closing connectivity gaps through a focus on scalability, expertise, and resilience, Malaysia is well-poised to lead an inclusive digital economy that fosters regional growth and innovation across Southeast Asia. – W.Media

*This exclusive authored article appears in the 7th issue of W.Media’s Cloud & Datacenters Magazine. Download a complementary copy here.