Malaysia’s data centre sector set for rapid growth to 2030
The Asia Pacific Data Centre Association has published a newly commissioned report by KPMG assessing the economic impact of the data centre sector in Malaysia.
Growth projections
The report finds that Malaysia ranks as one of the fastest growing data centre markets in Asia Pacific, driven by rapid capacity expansion, strong government support, increasing investment by hyperscale operators, and a comparatively lower cost and execution risk profile relative to neighbouring markets.
According to the study, the country's total data centre capacity is expected to double from 1.26GW to 2.53GW between 2025 and 2030. Over the same period, annual colocation revenue is projected to rise from USD$0.71 billion to USD$1.87 billion, representing compound annual growth rates of 15 percent and 21 percent, respectively.
Economic contributions
The independent study reveals that the data centre sector contributed an estimated USD$1.4 billion to Malaysia's total economic output in 2024, supporting over 4,400 jobs. By 2030, total economic output from the sector could reach USD$34 billion, and employment supported by the industry is projected to grow to 30,900 jobs annually. This includes around 4,300 high-value knowledge roles within data centre operations and across the wider digital economy.
For each direct job in the data centre sector, the report estimates that an additional 3.2 jobs are supported elsewhere in the Malaysian economy. Annual wage income supported by the sector is projected to increase nearly eightfold, reaching USD$1.3 billion by 2030.
Industry impacts
The report notes that the data centre industry is not only generating high-wage employment but is also enabling the growth of a broader digital business ecosystem. The presence of data centres attracts related digital businesses such as cloud service providers, software development companies, and cybersecurity firms, thus contributing to the diversification and expansion of Malaysia's digital economy.
Data centre operators are also investing in local talent development, which the report points to as helping to address skills gaps within the ICT sector and supporting increased wage growth and job prospects for communities. The industry's infrastructure investments are noted as being significant drivers for upgrades to local utilities, particularly in energy supply and digital connectivity.
Policy considerations
The report recommends measures to support the sector's continued growth and its contribution to the wider economy. Suggested areas of focus for government and industry collaboration include reviewing tax and energy tariff structures, ensuring regulatory predictability, addressing sustainability issues, and investing in workforce upskilling.
"As Malaysia positions itself as a regional digital hub, data centres are the foundational infrastructure that powers and enables AI, cloud adoption, and digital transformation across sectors," said Jeremy Deutsch, Chair of the APDCA. "This report provides compelling evidence of the sector's tangible benefits and broad-based impact on the Malaysian economy, rakyat, and nation, and underscores the need for supportive policies to sustain this momentum and achieve Malaysia's digital ambitions."
KPMG's analysis is described as providing the most comprehensive assessment to date of the direct, indirect, and induced impacts of the data centre industry in Malaysia. The report identifies that continued investment will be required to unlock further value for the digital economy and sustain sector growth through to 2030 and beyond.
