KULAI, May 6 – Johor’s Kulai district, some 70 kilometres north of Singapore, is known for its rubber plantations and oil palm estates.
These days, however, you’ll also find hundreds of acres of construction sites with cranes and work crews.
Within three years, the sites will become industrial parks hosting multiple data centres – buildings that house large groups of high-speed computers, servers and routers that store, process as well as distribute vast amounts of data, CNA reports.
The world’s growing reliance on cloud-based technology has fuelled the growth of data centres, and Johor has become one of the hotspots in Malaysia.
In particular, southern Johor, with its proximity to the Singapore’s financial hub and comparative advantages like abundant land and cheaper power, could be well-positioned to be a key regional player, experts say.
Major data centre players like Nvidia, AirTrunk, GDS International, YTL Power as well as Princeton Digital Group have set up operations there, and tech giant Microsoft has reportedly purchased land in Kulai to open a data centre.
According to resource site Baxtel, Johor has 13 data centre facilities across more than 1.65 million square feet of land mass. The state is also ranked as the largest data centre market in Malaysia and ninth-largest in Asia Pacific. Baxtel added that four other data centres are being constructed in Johor.
Johor is expected to pull RM17 billion (US$3.6 billion) in new data centre investments this year, building on RM51.1 billion in investments in 2022, according to Malaysian property agency Zerin Properties.
The Malaysia government has also supported Johor’s data centre ecosystem by building industrial parks with suitable infrastructure. Two of the biggest are the 745-acre Sedenak Tech Park (STeP) and 509-acre Nusajaya Tech Park.
Elsewhere in the country, data centres are spread across the Klang Valley, Penang, Kedah and Sarawak. Cyberjaya, dubbed Malaysia’s tech capital near Kuala Lumpur, reportedly has 13 data centres in operation.
However, it caters to the domestic market while Johor caters to multinational corporations with regional presence, digital economy experts told CNA.
According to a report by real estate agency Knight Frank, the data centre market in Johor is expected to surpass Greater KL in terms of “live capacity”.
Johor’s data centre boom is driven by its proximity to land-scarce Singapore which, between 2019 and 2022, paused new data centre development.
Another factor is United States-China strategic competition, which has spurred corporations from China and the West to diversify and expand in Southeast Asia in the semiconductor and digital infrastructure space.
Malaysia has made international headlines for becoming an unlikely beneficiary of the US-China trade war, which has impacted the global supply chain in crucial sectors like semiconductors and manufacturing.
Various US semiconductor firms have set up shop in Penang, which has a free-trade zone and industrial parks. Cheap labour and its large English-speaking population are additional draws.
