Johor Emerges as Malaysia's Leading Data Centre Hub with RM164.45bil Investments

Johor has emerged as Malaysia's leading data center investment hub, with state officials approving RM164.45bil in investments for 42 projects. The investments aim to balance data center growth with resource risks, positioning Johor as a key player in the country's digital economy.

Johor has solidified its position as Malaysia's leading data center investment hub, with state officials approving RM164.45 billion in investments for 42 projects as of the second quarter (2Q) of 2025 [1]. The investments aim to balance data center growth with resource risks, positioning Johor as a key player in the country's digital economy.

Johor Menteri Besar Datuk Onn Hafiz Ghazi stated that these projects are expected to create over 6,000 quality job opportunities and contribute 78.6% of the country's operational IT capacity [1]. The state government aspires to house 6% of Malaysia’s data center capacity by 2030, integrating smart technologies in public services to enhance industry competitiveness and build an inclusive digital ecosystem [1].

The surge in data center investments is driven by the global demand for AI data centers, as seen in Coherent's record revenues in its latest earnings report [2]. Coherent reported revenues of $1.53 billion for the fourth quarter of fiscal 2025, with a 38% year-over-year increase in Q4 revenue and a 61% full-year increase in its data center segment [2]. The company cited strong demand from AI data centers as a key driver, particularly for its 1.6T Datacom transceivers [2].

Malaysia's commitment to AI infrastructure is reflected in the country's rapid growth in GPU imports, with imports surging to $6.45 billion in the first four months of 2025 [3]. This growth is fueled by significant investments from tech giants such as Microsoft, Oracle, and YTL-NVIDIA, which are establishing green AI data centers powered by renewable energy [3].

The transformation of Johor from palm oil plantations to AI processing hubs is evident in its data center capacity, which has exploded from 10 megawatts in 2022 to over 1,500 megawatts today, with projections reaching 3,600 megawatts by 2027 [3]. Knight Frank ranks Malaysia as the world's hottest destination for data center investments in both 2023 and 2024, with Johor alone attracting $3.8 billion in 2025 [3].

The recent signing of the Johor-Singapore Special Economic Zone (JS-SEZ) agreement has further accelerated cross-border integration, providing companies with a preferential 5% corporate tax rate, streamlined immigration processes, and coordinated infrastructure planning between both nations [3]. This strategic move positions Johor as a potential regional digital innovation hub, driving economic growth and improving the quality of life for its residents.

References:
[1] https://theedgemalaysia.com/node/766460
[2] https://www.sdxcentral.com/news/coherent-rides-ai-data-center-wave-as-revenues-soar/
[3] https://introl.com/blog/malaysia-ai-infrastructure-15-billion-investments