Digitalization ASEAN Malaysia News Singapore Southeast Asia Technology Thailand

SEA Emerging As Data Center Hub

pexels cookiecutter 1148820

Southeast Asia is emerging as an ideal region for tech operators to establish a data center base. Singapore, Malaysia, Thailand, Indonesia, and Vietnam are the top five countries.

Singapore is the preferred destination for hosting data centers due to its superior infrastructure and stable regulatory regime. However, it has imposed a three-year halt on data center construction between 2019-22 to assess its environmental impact.

Malaysia seized the bulk of new data center investments entering the region during that period. It now expects facilities with around one gigawatt (GW) of power capacity to come online over the next two years, doubling existing data center capacity.

If approved, another 3 GW has also been announced and will be gradually rolled out in the next three to five years, RHB Bank reports.

Singapore’s data center capacity currently stands at around 1.4 GW.

Among those channeling capital into Malaysia are tech titans like Microsoft, which said in May that it will invest US$2.2 billion (S$2.9 billion) over the next four years to build cloud and AI infrastructure in the country.

Amazon Web Services (AWS) in August announced plans to invest an estimated US$6.2 billion to set up a data centre and cloud region in Malaysia.

Amazon is also planning to invest US$5 billion in data centers in Thailand over the next few years, making the country its fourth AWS region in Asean after Singapore, Indonesia, and Malaysia.

In September, Google said it would invest US$1 billion to build a data center and cloud region in Thailand, which has seen around US$9 billion committed by operators, according to analysts at Morgan Stanley.

By 2028, RHB expects Malaysia to account for over half the data center processing power across the top five Southeast Asian markets, with data centers in Johor making up the bulk of inventories at over 2.3 GW.

According to CBRE, the average construction cost for a data center in Singapore is at around US$11.40 per watt, the highest among nine Asian cities. Meanwhile, in Johor, the average cost is only around US$8.40 per watt. Energy and land costs in Johor are also among the lowest in the region.

Find out more by clicking HERE.

ripavi saunat

VisionFinland YouTube Channel

Topics