Mida: Data centre growth must build local value, not just capacity

Industry leaders at Data Centre Nexus 2026 urged Malaysia to measure data centre growth by local capabilities and supply chains, not just investment size. Mida recorded RM385.7 billion in data-centre investments from 2021 to H1 2026, with calls for greater SME participation and resource efficiency.

KUALA LUMPUR (Sept 14): Malaysia’s data centre expansion should be judged not only by the capacity it adds, but also by the local capabilities, businesses and supply chains built alongside the investment, industry participants said at Data Centre Nexus (DCN) 2026 on Monday (Sept 14).

The conference, organised by the Malaysian Investment Development Authority (Mida) at Hilton Kuala Lumpur, was themed “Advancing AI-Driven Digital Infrastructure and Sustainable Ecosystems”. The event focused on economic opportunities and resource demands arising from the country’s expanding data centre sector, including renewable energy, grid and industrial infrastructure, cooling technologies and local participation in the supply chain.

Mida chairman Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the priority was to ensure data centre investment produced durable gains for the wider Malaysian economy. “Beyond the headline numbers, Mida keeps asking one question: how do we turn this investment into lasting, tangible value for the wider Malaysian economy?” he said in his luncheon remarks. “In the end, success will not be measured by the size of the investment we attract, but by the value we build around it: stronger Malaysian businesses, deeper local capabilities, and real opportunities for our people.”

Malaysia recorded RM385.7 billion in data-centre-related investments from 2021 to the first half of 2026, according to Mida. The agency said global operators and investors including AWS, Microsoft, Google, Bridge Data Centres, DayOne, AirTrunk and Vantage Data Centres have established or expanded their presence in Malaysia, particularly in Greater Kuala Lumpur and Johor.

Zafrul said attracting capital was only the first step, with the next task being to build a sustainable industry that creates high-value employment and commercial opportunities for Malaysian small and medium-sized enterprises (SMEs). He cited examples in Finland and Denmark of data centres reusing existing infrastructure and supplying surplus heat to nearby communities, saying Malaysia should aim to ensure resource efficiency develops alongside capacity. “These are not charity projects. They are proof that circularity and capacity can grow together,” he said.

At a panel discussion on green solutions, Gading Kencana Sdn Bhd managing director Datuk Dr Guntor Tobeng said Malaysia should seek greater participation by domestic companies across the renewable energy and infrastructure value chain. He identified opportunities in renewable energy development, engineering, procurement and construction (EPC), battery-energy storage, energy-management systems, engineering consultancy, and operations and maintenance. Hyperscalers could help build local capabilities by engaging Malaysian companies earlier in project development, sharing technical requirements and developing standards with local industry, he added.

Princeton Digital Group head of energy and environment Michael Martin said operators should ensure that the cost of developing supporting infrastructure does not fall on ordinary consumers. He said solar alone would be difficult to rely on as a full power solution for large-scale data centres, given the land area and battery storage needed for continuous supply. Instead, infrastructure developed to support data centres should also contribute to the wider electricity system, he said, pointing to advanced geothermal power as a potential component of Malaysia’s future energy mix.

Digital Realty Asia-Pacific head of solutions engineering and design Wayne Heywood said rack power density had risen from about 5kW to 10kW previously to as high as 70kW to 107kW, raising power, heat and water requirements and accelerating changes in cooling technology. He expects direct-to-chip liquid cooling to become the main cooling method within five to seven years. Malaysia’s tropical climate adds challenges including humidity and condensation, requiring cooling systems to be adapted for local conditions, he said.

Mida said DCN 2026’s business-matching programme involved 14 data centre companies and 51 local vendors, compared with eight data centre companies and 17 supply-chain companies at the inaugural event in 2025. Malaysia’s data centre electricity demand is projected to exceed 5,000MW by 2035, according to Mida.