Jakarta (AFP) – New data centres are springing up worldwide as demand soars for artificial intelligence and cloud computing, with Asia one of the sector’s fastest-growing regions. Land and power shortages in connectivity hub Singapore have driven a tech infrastructure boom in nearby countries where the growing business user base has also attracted US and Chinese investment.
AFP gives a run-down of where these data centres are being built, and why:
**Malaysia** – When resource constraints led Singapore to halt new data centre developments between 2019 and 2022, tech companies began to build across the border in Malaysia, which has fast become a powerhouse for the sector. Malaysia accounts for over half of under-construction data centre capacity among five countries also including Indonesia, Thailand, the Philippines, and Vietnam, market intelligence firm DC Byte says. Its policies are friendly, said Michael Freeman, regional director for Malaysia, Thailand, and Vietnam at construction project management company Turner and Townsend. The country “moves faster largely because of its streamlined, standardised permitting system and predictable utility allocation, which gives developers clarity on power, water, land use, and approval timelines,” Freeman told AFP. The building boom has been especially rapid in the southern state of Johor, which has imposed tighter requirements on water and power use for new data centres to stop them straining local resources.
**Indonesia** – “In contrast, Thailand, Indonesia, and the Philippines each face structural barriers that slow project timelines, despite strong demand and growing investment interest,” Freeman said. “Indonesia’s comparatively slower speed stems primarily from unreliable and coal-heavy power, slow renewable energy approvals, and grid access uncertainties,” as well as drawn-out permit procedures, he added. Still, tech giants want to cater to Indonesia’s huge, tech-savvy population. Microsoft, which is investing $1.7 billion in Indonesia for new cloud and AI infrastructure, recently gave AFP a rare look inside an operational data centre near Jakarta, a factory-like facility running non-stop to process AI queries. The US company has signed a deal with the state-owned electricity provider to raise Indonesia’s renewable energy capacity by around 200 megawatts over a decade.
**Thailand, Philippines** – Google launched a new “cloud region” in Bangkok in January, saying their data centres would contribute more than $40 billion in economic value to Thailand over five years. “Many people are rushing to Thailand,” but the country could face constraints, said Singapore-based tech journalist Paul Mah. “I’m not saying limited power, but getting power to the right places where the operators want the data centre to be,” Mah told AFP. The Philippines, too, is set for a surge in data centre building projects, with companies eyeing its developing digital economy. “Emerging markets, including Thailand, India, Indonesia, and the Philippines are at the nascent stages of building their data centre infrastructure but possess immense potential for growth,” says KPMG.
**Vietnam** – “Vietnam has been a hot topic in the data center market for several years” thanks to high demand and power availability there, Freeman said. Its permitting system remains a challenge, he added, although the government is making efforts to be more investor-friendly, with dedicated tech parks and simplified processes for setting up data centres. “We fully expect to see an influx of multi-national providers entering the Vietnam market in the coming years,” Freeman said. “Our expectation is that when one or two build successfully and demonstrate the case that the permitting system is working as intended, we will likely see a major surge in interest and developments.”
© 2024 AFP
