KUALA LUMPUR, July 21 (Xinhua) -- Malaysia is well positioned to become one of Southeast Asia's largest data center hubs by 2030, despite facing execution and funding challenges as the industry transitions toward more sustainable growth, S&P Global Ratings said on Monday.
In a report, the ratings agency said Malaysia could nearly triple its data center capacity by 2030, supported by its proximity to Singapore, strong digital connectivity and expanding power and water infrastructure.
"Malaysia is slowing down to get ahead in data centers. The country's data center sector is in a reset mode -- from rapid expansion toward a model that aims for sustainable growth," said S&P Global Ratings credit analyst Spencer Ng.
He added that the shift would provide time for the country to expand critical power and water resources needed to support long-term industry growth.
However, S&P cautioned that Malaysia must overcome significant execution risks, warning that any delays in the planned power or water rollouts could constrain growth.
The agency also highlighted funding as a key challenge, estimating that data center developers will require around 20 billion U.S. dollars over the next three years for powered shells and equipment alone.
While public credit for data centers is still nascent in the Asia Pacific, it opined that Malaysia's robust solvency framework and established capital markets position it favorably against Southeast Asian peers. ■