Malaysia Data Center Colocation Market Growth Projected to Reach $3.52 Billion by 2030, With a CAGR of 29.98%

The Malaysian data center colocation market is expected to grow at a CAGR of 29.98% from 2024 to 2030. The market size is expected to reach $3.52 billion by 2030, up from $0.73 billion in 2024. The market is driven by factors such as increasing demand for cloud services, growing adoption of big data analytics, and rising investments in digital infrastructure. The market is expected to be driven by the retail and wholesale colocation segments, with retail colocation pricing expected to increase by 25% by 2030. The report includes a detailed analysis of the existing and upcoming data center facilities in Malaysia, as well as an analysis of the market by IT power capacity and colocation pricing.

The Malaysian data center colocation market is poised for significant growth, with a projected Compound Annual Growth Rate (CAGR) of 29.98% from 2024 to 2030. According to a recent report by Arizton, the market size is expected to reach USD 3.52 billion by 2030, up from USD 0.73 billion in 2024 [1].

Key drivers for this growth include increasing demand for cloud services, the adoption of big data analytics, and rising investments in digital infrastructure. The market is segmented into retail and wholesale colocation, with retail pricing expected to increase by 25% by 2030. This growth is further supported by the spillover demand from Singapore and the rapid scale-up of operators expanding regional capacity.

Cyberjaya remains the core hub for colocation, backed by strong investments from local and international players such as AirTrunk, Bridge Data Centres, NTT, and YTL Data Centers. The continued adoption of AI, 5G rollout, and data localization requirements are boosting demand for reliable capacity. Additionally, Malaysia's push for renewable energy and national AI initiatives signal strong government backing for digital growth.

While new power tariffs and surcharges pose cost considerations for operators, Malaysia's strong fundamentals, including network connectivity improvements and a favorable investment climate, reinforce its position as a high-potential market for colocation providers and investors.

The report also highlights the growing demand for high-density, green data centers, driven by the rapid adoption of AI across sectors like manufacturing and healthcare. Leading operators are responding to this trend, with ST Telemedia Global Data Centres (STT GDC) announcing the rollout of AI-ready facilities across Southeast Asian markets, including Malaysia.

Capacity developments in Malaysia's colocation market include the addition of over 751 MW of total core & shell power capacity as of May 2025, with a strong utilization rate of ~85%. Significant deals, such as the Electricity Supply Agreement between Bridge Data Centres and Tenaga Nasional Berhad, and strategic joint ventures like the one between Mah Sing and Bridge Data Centres, are further driving market growth.

The report also notes the adoption of advanced liquid cooling solutions to enhance efficiency and reliability. Providers like Bridge Data Centres offer versatile cooling systems to meet diverse capacity requirements, positioning liquid cooling as a practical path for colocation providers to enhance sustainability and reduce operating costs.

The market analysis includes a detailed look at existing and upcoming data center facilities across Malaysia, as well as an analysis of market size by IT power capacity and colocation pricing. The report also covers updates on submarine cables, cloud on-ramps, and sustainability progress, providing a comprehensive overview of the market landscape.

References:
[1] https://www.theglobeandmail.com/investing/markets/markets-news/GetNews/33503404/malaysia-data-center-colocation-market-investment-to-reach-usd-352-billionby-2030-arizton
[2] https://www.barchart.com/story/news/33503233/malaysia-data-center-colocation-market-investment-to-reach-usd-352-billionby-2030-arizton