MALAYSIA: Kenanga Research expects Malaysia’s cloud services demand to rise as global cloud service providers (CSPs) continue to invest in data centres, cloud, and artificial intelligence (AI) infrastructure.
According to The Star, the research house noted that a range of industry players, including CSPs, distributors, managed-cloud service providers, software vendors, and system integrators, stand to benefit from this influx of investment.
According to Kenanga Research, key beneficiaries include Malaysian firms such as Telekom Malaysia Bhd, Maxis Bhd, CelcomDigi Bhd, OCK Group Bhd, TIME Dotcom Bhd, Dagang Nexchange Bhd, Vstecs Bhd, and SNS Network Technology Bhd.
The research house said Tenaga Nasional Bhd (TNB) is expected to benefit long-term from steady electricity demand as data centres require substantial power.
YTL Power International Bhd anticipates no delays in AI chip deliveries, with the first batch expected in the first quarter of 2025.
The research house also mentioned Southern Cable Group Bhd as another company to watch as demand for cloud services and data centres increases in Malaysia.
Kenanga Research said that global tech giants have collectively pledged more than US$16.5 billion (S$21.76 billion) to cloud and data infrastructure in Malaysia.
Amazon Web Services (AWS) has committed US$ 6.2 billion(S$8.18 billion), Oracle US$ 6.5 billion (S$8.57 billion), Microsoft US$ 2.2 billion (S$2.90 billion), and Google US$ 2 billion (S$2.64 billion).
These investments will likely boost demand for cloud services, as data centres house the servers that provide the necessary storage and computing power.
Theoretically, with more resources available, costs may decrease, and cloud performance could improve, leading to better pricing and service quality.
This should encourage new and existing customers to adopt cloud solutions more widely, the research house added.
The research house noted that, contrary to some views, the growth in data centres is not leading to an oversupply.
TNB has confirmed that power supply is not a concern, as it has enough capacity to meet current demand.
TNB has received over 70 applications for electricity supply to data centres in Johor and the Klang Valley, with total demand exceeding 11,000 megawatts (MW), said the research house.
Currently, Peninsular Malaysia’s total installed capacity stands at 27,385 MW, with grid demand around 18,000 MW.
Kenanga Research said that “TNB guarantees power supply once the Energy Supply Agreements are signed.”
TNB also implemented a fast-tracked process for high-voltage data centre connections, reducing the timeframe from the typical 36 months to just 12 months.
The research house noted that YTL Power believes there is no oversupply issue, as the world is quickly advancing into new technology areas.
The research house also said that the new supply of data centres can easily meet the rapidly increasing demand, adding that Malaysia’s strategic location, low risk of natural disasters, reliable electricity and water supply, and supportive government policies make it an appealing choice for tech companies to establish their data centres.
YTL Power believes Malaysia should take advantage of this opportunity, as the data centre industry is still relatively young, said Kenanga Research.
In addition, the research house noted that YTL Power anticipates no delays in the delivery of AI chips, expecting Nvidia’s Blackwell chips for a 20 MW AI data centre to arrive on time in the first quarter of 2025, stating that “power supply is not an issue.” /TISG
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