New data centre demand 'has not stopped', to benefit Johor—Equinix Malaysia MD

• “Singapore is clearly at the stage where I don't think we can expand anymore in terms of physical capacity.”

CYBERJAYA (May 7): As Singapore reaches its physical limits for data centre expansion, Malaysia—particularly Johor—is emerging as a preferred destination for global digital infrastructure providers, said Equinix Malaysia managing director Cheam Tat Inn.

“Singapore is clearly at the stage where I don't think we can expand anymore in terms of physical capacity,” Cheam said during a media tour of Equinix’s Kuala Lumpur data centre (KL1) on Wednesday.

“But demand hasn’t stopped—customers are still looking for digital infrastructure and they are going to look somewhere else to expand, and Johor seems to be [the choice] because of proximity,” he added.

The shift toward Johor is underpinned by its geographical advantage and direct low-latency network connectivity with Singapore. The state is also benefitting from broader trends reshaping the regional digital economy, and is more cost-competitive compared with the neighbouring city-state.

Malaysia is "one of the few interesting countries" housing three key digital ecosystems: data centres, artificial intelligence (AI) and semiconductors, Cheam said.

“This positions us very well in terms of the ability to deploy digital infrastructure to support the rapid growth of the digital economy in the region,” he added.

Malaysia’s data centre boom began gaining traction at the end of 2022, coinciding with Singapore’s temporary moratorium on new data centre developments introduced in 2019.

Although Singapore has since lifted the freeze, new applications are limited to a 60MW per year quota, significantly constraining growth potential.

This policy has prompted global tech giants and data centre operators to look beyond Singapore, with Johor being the logical next step due to its proximity and connectivity advantages.

Looking ahead, Cheam is optimistic about continued growth in Malaysia’s data centre market, especially as the country pushes forward with its digital economy ambitions.

“Malaysia wants to be a digital economy powerhouse, which means the commitment to drive the digital economy is going to be there—and as a result, you will need to continue to provide digital infrastructure. So the way we are seeing it is there will still be growth,” he said.

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