Thailand’s ‘data centre rush’ is starting, as Malaysia strains to keep pace with surging demand: Macquarie
MACQUARIE Research said that the data centre boom in Malaysia will continue, but that it is unlikely to keep pace with surging demand.
It said that Thailand, meanwhile, will start to reap the benefits of the surging demand for data centres, a play on the artificial intelligence (AI) trend.
Macquarie in a Nov 29 report, said :
We believe Thailand’s data centre rush is just beginning,
Led by head of Asian sustainability research Charles Yonts, Macquarie analysts said in a report that Thailand would be a stand-out, as it has ample power. New investments from Amazon and Google in the country’s Eastern Economic Corridor would also fuel the rapidly growing demand for digital services.
In particular, the analysts noted that Thailand will benefit from the shift to the so-called “site to power” model, where electricity-guzzling data centres are built where they can access power, rather than trying to get power to preferred sites.
They said in the report, noting Thailand’s advantageous power conditions and supportive regulations,
As the ‘site to power’ model becomes increasingly dominant, data centre operators and investors will need to prioritise markets with robust power infrastructure to stay ahead in this competitive landscape,
To meet the demand for infrastructure and computing power to enable AI, global tech players are stepping up the building of data centres. These are large facilities that accommodate servers, data storage systems and networking equipment that support better Internet services and telecommunications.
The World Economic Forum estimates that generative AI systems might already use around 33 times more energy to complete a task, compared with task-specific software.
South-east Asia is benefiting from the rush, in particular Malaysia, after Singapore halted the building of data centres between 2019 and 2022. Multibillion dollar investments such as those by Google to build data centres are expected to double Malaysia’s current capacity to around one gigawatt over the next two years. Data centre capacity is measured by the amount of electricity consumed, as defined by watts.
But there are signs that Malaysia may be straining under the power requirements of such investments. In November, the southern Malaysian state of Johor said that it had rejected almost 30 per cent of data centre applications in the past five months. This was because the authorities have been trying to focus on conserving resources and regulating the industry to ensure maximum benefits for the local economy.
Top picks
Macquarie said that, in Asia, it continues to see strong demand for data centre operators with a “clean line of sight” to power supply, as well as for power generation and utility companies that can provide it.
In Thailand, Macquarie likes Gulf Energy, its top pick.
It is developing its own data centre, and will also look to supply power (internally and also to hyperscalers), its analysts wrote. Hyperscalers provide the massive cloud computing power needed for AI applications.
Over in Malaysia, Macquarie’s top picks are data centre operator YTL Power, and power utility firm Tenaga Nasional Berhad (TNB). It likes TNB as a beneficiary of rising data centre demand, while it expects YTL Power to commission its AI data centre in mid-2025 with “early access” to Nvidia’s GB200 servers, said Macquarie.
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Thailand’s ‘data centre rush’ is starting, as Malaysia strains to keep pace with surging demand: Macquarie, source
