Google Commits US$2 Billion Investment in Malaysia, What It Means to Tech Sector?
Google is set to invest US$2 billion in Malaysia's first data center and Cloud region at Sime Darby's Elmina Business Park, supporting 26,500 jobs across various sectors, with the total economic impact valued at $3.2 billion.
"When operational, Malaysia will join the 11 countries where Google has built and currently operates data centres to serve users around the world", the minister of Miti said. "The Google Cloud region, on the other hand, will deliver high-performance and low-latency cloud infrastructure, analytics, and AI services to large enterprises, start-ups, and public-sector organisations, while maintaining the highest security and regulatory compliance standards."
Alphabet and Google's President Ruth Porat stated that the first data center and Cloud region represent Google's largest investment in Malaysia to date. "With today's (Thursday) announcement, Malaysia and Google are partnering to advance our shared work to create a supportive ecosystem for innovation, and unlock the potential of digital transformation," she said.
Since the end of last year when NVIDIA collaborated with YTL Power to establish a $4.3 billion AI data center park, international investment in Malaysian data centers has significantly increased. In early May, Microsoft announced a $2.2 billion investment in Malaysia's AI infrastructure and plans to purchase land in Kulai, Johor, to set up a new data center. Sime Darby Property, in collaboration with its partner Pearl Computing, is developing a data center on a 49-acre site within the 1,500-acre Elmina Business Park in May.
Semicon SEA 2024 kicks off with Malaysia's vision to lead semiconductor industry
During the SEMICON Southeast Asia 2024 conference held from 28 to 30 May, Malaysian Prime Minister Anwar Ibrahim announced a 3-phase plan backed by US$5.3 billion in fiscal support and targeted incentives.
The initial stage, "Strengthening Our Foundation," capitalizes on Malaysia's current industrial strengths and expertise. This phase is about enhancing Outsourced Semiconductor Assembly and Test (OSAT) services with state-of-the-art packaging technologies, scaling up the production of less advanced chips and power semiconductors, and nurturing homegrown leaders in chip design.
The second stage, termed "Advancing to the Leading Edge," aims to advance into sophisticated logic and memory chip development, production, and testing, as well as to integrate more deeply with major semiconductor purchasers. Anwar is optimistic that the successful execution of the initial stage will draw top-tier advanced semiconductor producers to set up shop in Malaysia.
The third and conclusive stage, "Pioneering Innovation," is set to foster globally competitive Malaysian companies specializing in semiconductor design, advanced packaging, and production equipment. It also seeks to attract tech industry powerhouses like Apple, Huawei, and Lenovo for high-end manufacturing within Malaysia.
The Minister of International Trade and Industry, Tengku Datuk Seri Zafrul Tengku Abdul Aziz, highlighted that semiconductor exports currently represent 40% of Malaysia's total exports, positioning the country as the world's sixth-largest exporter in the sector. "With continued growth expected, global demand for semiconductors is projected to reach US$1 trillion (RM4.69 trillion) by 2030."
Analysts are bullish on the prospects of the tech sector
"Now that many of these American tech giants are diversifying their investment risks away from China, Malaysia with its traditional involvement in high-tech industry is in a good position to welcome the relocation of their operations," said Oh Ei Sun, principal adviser for Pacific Research Center of Malaysia. Semiconductor stocks, in particular, have risen following plans by the United States to impose double tariffs on semiconductors imported from China.
President and CEO Ajit Manocha is also optimistic about the prospects of Malaysia's semiconductor industry. "Events like Semicon Southeast Asia play a crucial role in fostering dialogue, partnership, and innovation. The growth in participation this year reflects the growing relevance of this event and the collective commitment to advancing the semiconductor ecosystem to Southeast Asia and beyond," said Manocha.
Investors are closely monitoring which companies stand to benefit from the technology wave sweeping Malaysia, driven by numerous developments.
Since signing an agreement with NVIDIA last year, the company's stock price has risen substantially, buoyed by the partnership. This year, the company's stock price has surged by more than 100%.
Analysts have noted that being the sole data center operator in Southeast Asia equipped with a 500-megawatt solar power facility, the company is poised to excel in the provision of clean energy as well as in its swift capacity expansion, positioning it as a top choice for clients. By 2035, the demand for electricity by data centers is anticipated to exceed 4300 megawatts, and the national energy company's move into renewable energy generation has also significantly boosted the company's appeal.
"The group has an advantage as Nvidia's preferred partner in Malaysia for AI-Cloud service provider compared to other data center owners, as converting a conventional data center to an AI-data center infrastructure is difficult and costly," Hong Leong Investment Bank noted.
In the financial report released on May 23, Inari Amertron, Malaysia's largest outsourced semiconductor assembly and testing company, announced that its net profit had increased by 29% compared to the same period last year. Since the beginning of the year, the stock has risen by over 13%.
Inari has indicated that its current operations are "expected to benefit" from the anticipated launch ofartificial intelligence(AI) smartphones, as well as the growth of high-bandwidth optoelectronics in networks and data centers serving the AI market.
Google's planned data center will be located in Sime Darby Property's Elmina Business Park in Greater Kuala Lumpur. As the world's largest palm oil producer by area, Sime Darby Plantation is making strides towards sustainability by venturing into green industrial parks. The company has set a goal to transition from its current role as a real estate developer to an industrial company by 2025.
Analysts suggest that given Sime Darby Plantation's extensive land bank, the company's stock could potentially reap benefits from the development of green industrial parks, involvement in large-scale solar projects (LSS), and the growing demand for data centers.
Mooers, are you bullish on Malaysia's tech sector? ![]()
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lefthand : Typo in para 4, it is Kulai, not Kulay
牛不吃草 lefthand: I google see there is a place call Kulay, in Kluang
105133409 : verified
lefthand 牛不吃草: Nope is Kulai, you can refer para 6Johor’s data centres getting a boost from the Singapore factor; water, power remain bottlenecks
牛不吃草 lefthand: Okayyy
Capalatte : up up
Moomoo News MYOP lefthand: We sincerely apologize for the oversight in our article. Your careful reading and subsequent feedback have helped us identify and rectify the mistake. We are grateful for your contribution and thank you for helping us ensure the accuracy of our content.
PokaiTrader : Many of the news items on MooMoo feel like algorithmic curated. I have come across many times news items use same keyword as Malaysian ticker name but turns out to be foreign company news. Needs better Ai and machine methodology and basic fact checking.
Moomoo Lily PokaiTrader: Hi mooer, thank you for your support and feedback. Your feedback is very important to us and we have forwarded it to the relevant department. We will continue to optimize and improve the quality of our products and services in the future. Thank you for your support.
Moo News Support PokaiTrader: Dear Mooer, Thank you very much for your opinions and feedback. We sincerely apologize for the inconvenience caused by the incorrect news matching issue. We have resolved some of the mismatch issues, and we are continuously working to optimize the remaining ones. We also look forward to your assistance by providing specific examples where errors have occurred to help us improve further. Thank you once again! Wishing you a wonderful day.
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