PETALING JAYA: Kenanga Research anticipates a rise in demand for cloud services as global cloud service providers (CSPs) continue to invest heavily in data centres, cloud and artificial intelligence (AI) infrastructure in Malaysia.
The research house said it believes players involved in various roles within the cloud industry such as CSPs, distributors for global CSPs, managed-cloud service providers, software vendors and system integrators, stand to benefit.
Among the beneficiaries include Telekom Malaysia Bhd
, Maxis Bhd, CelcomDigi Bhd, OCK Group Bhd, as well as TIME Dotcom Bhd, Dagang Nexchange Bhd, Vstecs Bhd and SNS Network Technology Bhd.
“Tenaga Nasional Bhd (TNB) will be a long-term beneficiary, given the expected resilience in electricity demand from data centres, while YTL Power International Bhd does not expect delays in AI chip scheduled for delivery in the first quarter of 2025.
“Other names to watch out for include Southern Cable Group Bhd,” the research house added.
It pointed out that in recent months, global tech giants have collectively pledged investments exceeding US$16.5bil in these areas.
They include hyperscale CSPs such as AWS (US$6.2bil), Microsoft (US$2.2bil), Google (US$2bil) and Oracle (US$6.5bil).
“These investments are expected to catalyse cloud demand as data centres house the servers that provide storage capacity and computing power essential for cloud-service delivery.
“Theoretically, the increased availability of these resources at scale should drive down costs and improve cloud performance, resulting in more competitive pricing and enhanced service quality.
“In turn, this would spur greater adoption and demand from both new and existing cloud customers,” Kenanga Research said.
The research house added that contrary to some opinions, the data centre boom is not creating an oversupply situation, while power supply is not a constraint as TNB has explained that it has sufficient capacity to meet demand.
According to the research house, TNB has received over 70 electricity supply applications for data centres in Johor and the Klang Valley, with total maximum demand exceeding 11,000 megawatts (MW).
Currently, the total installed capacity in Peninsular Malaysia is 27,385 MW, with grid demand at around 18,000 MW
“TNB guarantees power supply once the Energy Supply Agreements are signed and it has implemented a fast-tracked green lane process for high-voltage data centre connections, reducing the timeframe to 12 months compared with the typical 36 months for normal high-voltage bulk supply,” Kenanga Research said.
The research house pointed out that YTL Power believes that there is no oversupply issue as the world is moving rapidly into advanced technology spaces.
“New supply of data centres is easily absorbed by fast-growing demand. Malaysia’s strategic location, relative absence of natural disasters, consistent and stable electricity and water supply, along with government support, make it an attractive destination for tech giants to set up their data centres.
“YTL Power believes Malaysia should seize this opportunity, as the data centre industry is relatively young.
“Meanwhile, YTL Power does not expect delays in AI chip delivery and expects Nvidia’s Blackwell chips, to be housed in a 20MW AI data centre, to be delivered on schedule in the first quarter of 2025. Power supply is not an issue, ” it added.
