In anticipation of the forthcoming surge in data center development, several key players in the technology and electronic manufacturing services (EMS) sectors are poised to capitalize on the opportunity.
Notable among them are PIE Industrial Bhd, Nationgate Holdings Bhd, Malaysian Pacific Industries Bhd, and Inari Amertron Bhd.
Additionally, LGMS Bhd, Malaysia’s sole dedicated cybersecurity services firm, stands to gain considerably from this growth, according to Kenanga Research.
The realm of cybersecurity for local data centers remains an underexplored opportunity, according to the research firm.
Among the prominent construction firms in the data center arena, Kenanga Research highlights Southern Score Builders Bhd—a mechanical and engineering contractor—as a potential undervalued asset.
Kenanga Research holds a positive outlook on the technology sector, favoring PIE, LGMS, and Inari, with an “outperform” rating for these companies and target prices set at RM6.75, RM1.90, and RM4.60, respectively.
The data center market in Malaysia is brimming with potential, with various players involved in different aspects from development to specialized services. As Malaysia aims to become a leading hub for data center growth in the region, the country has the capacity to support over 3,000 megawatts (MW) of IT power.
Currently, Malaysia’s operational IT capacity is under 500MW, indicating the early stages of a substantial data center expansion, akin to the early days of the government’s large-scale solar energy initiative.
The market for AI servers in Malaysia is projected to be worth RM97.8 billion. This projection assumes that 40% of the anticipated increase in IT capacity—about 2,600MW—will be dedicated to AI servers, which typically require around 11kW each.
Although local firms in the outsourced semiconductor assembly and test sector and EMS players are relatively new to server-related activities, they have substantial experience in serving multinational corporations, according to Kenanga Research.
