Data Centers in Malaysia

Malaysia – A Premier Hub for Southeast Asia

Executive Summary

Malaysia is a strategic location for businesses targeting the rapidly growing digital economies across Southeast Asia. With its excellent international connectivity, diverse provider ecosystem, and direct access to major cloud platforms, the country provides the reliable infrastructure needed to deliver high-performance, low-latency services to millions of users in the region.

Malaysia: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: Malaysia features a competitive market with over 23 network service providers operating within its 35 colocation facilities, as of September 2025. This environment ensures access to multiple transit and transport options.

Direct Cloud On-Ramps: The country has over 3 dedicated cloud on-ramps providing direct, low-latency connections to 5 cloud regions, as of September 2025. Available providers include Alibaba Cloud, Amazon Web Services (AWS), and Microsoft Azure.

Internet Exchange Points (IXPs): The Malaysia Internet Exchange (MyIX) is the country's primary peering point, enabling efficient local traffic exchange and reducing reliance on international transit. This improves performance and lowers costs for content delivery within Malaysia.

Bare Metal: Bare metal server solutions are widely available from various providers. Global providers like Hivelocity and phoenixNAP offer dedicated server hosting in the region for workloads requiring maximum performance and control.

Power Analysis

Average Cost Of Power: Industrial power costs are estimated to be between MYR 0.40 – 0.55 per kWh, as of September 2025. These competitive rates help manage the significant operational expenses of high-density computing.

Power Grid Reliability: The national power grid is generally stable, particularly in key economic zones like Cyberjaya and Kuala Lumpur where data centers are concentrated. Facilities in these areas are supported by redundant power feeds from multiple substations to ensure high levels of uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are strategically located in clusters like Cyberjaya, Kuala Lumpur, and Johor Bahru. These locations provide close proximity to financial services hubs, government centers, and manufacturing zones, enabling low-latency connections for critical business applications.

Regional Market Reach: Malaysia's central location in Southeast Asia and extensive subsea cable connectivity make it an ideal base for serving the entire ASEAN region, a market of over 680 million people. It offers a stable and cost-effective alternative to neighboring hubs.

Tax Advantage For Data Centers: Malaysia does not currently offer specific tax incentives designed exclusively for data center development or operation. The standard corporate tax laws and Sales and Service Tax (SST) are applicable to data center investments and services.

Natural Disaster Risk

Malaysia has a moderate overall disaster risk profile, with a composite score of 3.3 out of 10, as of September 2025. While the country is located outside the Pacific Ring of Fire, minimizing earthquake and volcanic activity, site selection requires careful consideration of specific regional hazards.

The most significant natural risks include:

• River & Coastal Flooding: Ranked as the highest threats, particularly during monsoon seasons in coastal and low-lying areas.
• Tsunami: A notable risk for coastal regions facing the Indian Ocean and South China Sea.
• Epidemic: The region has a moderate vulnerability to epidemics.