Malaysia’s Data Centre Expansion to Reduce Industry 4.0 Costs for SMEs, Says MIDA

PETALING JAYA (Nov 18): Malaysia’s rapid acceleration in hyperscale and AI-ready data centre investments is expected to significantly lower the cost of Industry 4.0 adoption for small and medium enterprises (SMEs), according to Malaysian Investment Development Authority (MIDA) chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid.

Speaking at the Federation of Malaysian Manufacturers’ New Manufacturing Summit, he said Malaysia’s expanding digital infrastructure is now providing the computational power necessary to support automation, AI-enabled manufacturing systems and data-driven industrial operations nationwide.

“These facilities give manufacturers scalable computing capacity for digital twins, real-time analytics and cloud-based manufacturing execution systems. This reduces upfront capital expenditure and makes advanced digital tools far more accessible to SMEs,” he said.

Data Centres to Accelerate Industry 4.0 Adoption

The rise of AI-driven quality control, predictive maintenance and real-time supply chain optimisation requires intensive computing resources—something most SMEs cannot afford to build in-house. With more data centres coming online, manufacturers can tap into cloud-based Industry 4.0 systems without heavy investment.

This trend also supports the broader property and industrial ecosystem, complementing the surge in demand for industrial land in Selangor, purpose-built digital infrastructure near industrial property in the Subang area, and manufacturing clusters such as factory hubs in Puchong.

ESG Requirements Now Key to Global Supply Chains

Sikh Shamsul also highlighted that global supply chains increasingly demand transparency on carbon reporting, responsible sourcing and labour standards.

“Companies unable to meet ESG requirements risk being excluded from major international contracts,” he noted.

Malaysia is aligning with these global expectations through:

• The National Energy Transition Roadmap (NETR)

• The national commitment to achieve net zero emissions by 2050

• Expanded renewable energy infrastructure

• The rollout of a carbon pricing mechanism by 2026 for iron, steel and energy sectors

These policies create a regulatory environment that encourages clean energy adoption and efficiency-focused investments across industries.

Investment Momentum Remains Strong

From January to September 2025, MIDA approved RM285.2 billion in total investments. Of this:

• RM93.8 billion (32.9%) came from manufacturing

• Over 800 approved projects are expected to create nearly 73,000 new jobs

This investment momentum also strengthens demand for supporting commercial assets—ranging from commercial property in KL to expanding business hubs such as office space in Bukit Jalil, which attract tech companies and Industry 4.0 solution providers.