KUALA LUMPUR -- Malaysia's data center capacity is set to more than double by the end of the year, new industry research released on Tuesday shows, as the Southeast Asian country becomes a regional hub for the booming sector.
According to estimates by real estate group Jones Lang LaSalle (JLL), Malaysia's operational data center capacity is forecast to rise from about 1,025 megawatts at the end of 2025 to roughly 2,100 MW by the end of 2026.
Facilities of 1,500 MW are currently under construction in the southern state of Johor, which is leading the growth, and 600 WM of facilities are being built in the Greater Kuala Lumpur, according to the estimates. In addition, another 4,000MW, or 4 gigawatts, is planned nationwide.
"Johor has clearly moved beyond being a spillover market," said Sum Chun Kit, JLL Malaysia's capital markets manager, who covers data center transactions, referring to the trend a few years ago of operators shifting from neighboring Singapore due to the city-state's land and power constraints.
JLL pointed to developments such as YTL's planned 500 MW campus in the town of Kulai in Johor as evidence of growing confidence among major developers and technology companies, even as tighter power and water regulations steer the market toward fewer but larger and more efficient projects.
Johor also benefits from land availability, proximity to the city-state and improving cross-border connectivity, JLL said.
In Greater Kuala Lumpur, the Cyberjaya district remains the largest cluster, while newer activity is emerging in northern Kuala Lumpur and Petaling Jaya, JLL said.
Digital Realty, one of the world's largest data center operators, recently entered Malaysia through an acquisition in Cyberjaya, a move seen as a vote of confidence in the country's long-term fundamentals. Vantage Data Centers has completed construction of its fourth facility, which is fully leased, pointing to strong occupancy levels despite rapidly expanding capacity.
Malaysia's data center growth comes as artificial intelligence increasingly reshapes the industry. AI-related workloads accounted for about 20% of global data center capacity in 2025 and are forecast to approach 50% by 2030, according to JLL.
New GPU (graphics processing unit) configurations in data centers can require more than 130 kilowatts per rack, 13 times higher than the roughly 10 kilowatts needed five to six years ago, significantly raising power density and cooling requirements, it said.
"Rack density has increased dramatically, and liquid cooling is no longer optional for future builds if operators want to meet efficiency thresholds," Sum said.
He pointed out that the AI shift is also driving data center demand across the supply chain, including for high-spec industrial space, temperature-controlled logistics and just-in-time hardware manufacturing, particularly in Johor and the Klang Valley, an urban area that includes Kuala Lumpur.
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