KUALA LUMPUR: New data centres in Malaysia will be encouraged or required to meet a minimum 30 per cent local content requirement to ensure greater economic benefits for the country, the Dewan Rakyat heard today.
Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said the requirement, agreed upon by the Data Centre Task Force (DCTF), aimed to integrate local companies into foreign investors' supply chains, create jobs and reduce reliance on imported products.
"This will create job opportunities, build the capacity of local companies to compete globally, and reduce our reliance on imported products, especially servers, integration systems, cooling systems and electrical systems," he said in response to a question from Rodziah Ismail (PH-Ampang).
Johari said local participation would begin at the development stage, with investors required to engage local consultants, contractors and providers of construction, engineering and logistics services.
"So, engaging a local consultant is one of the requirements, and we do not allow them to use foreign consultants," he said.
He said the government wanted local companies and universities to have access to data centres' computing capacity for research and development, enabling Malaysians to develop their expertise in the technology.
"We want to ensure that our local companies and universities are given access to the computing capacity of these data centres to conduct activities like research and development," he said.
He said the government was also working to ensure data centres did not place an undue burden on national resources, with electricity costs reflecting market prices and investors expected to bear the cost of necessary transmission infrastructure upgrades.
He said 57 data centres were consuming 6,237MW of electricity supplied by Tenaga Nasional Bhd (TNB), while another 60 projects in the pipeline would require a further 11,172MW.
On water use, Johari said state governments should assess their reserves carefully before approving water supply for data centres, adding that operators had been required to use water-recycling technology.
He said data centres' contribution to gross domestic product was estimated to have increased from RM900 million in 2021 to a projected RM14.1 billion in 2025, reflecting economic activity from construction, operations and utility spending.
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