Malaysia set for exciting digital growth with KIDEX’s first data center investment


Malaysia is about to witness exciting growth in the data industry once Kulai Iskandar Data Exchange’s (KIDEX) first data center comes online.

Developed by TPM Technopark, a wholly owned subsidiary of Johor Corporation (JCorp), with ideation and planning supported by the Malaysia Digital Economy Corporation (MDEC), KIDEX spans across 745 acres of land and is designed to attract the development of data centers in Johor.

The data center is a built-to-suit facility for a leading technology company, which will spread across six acres and will feature at least Tier III specifications.

“The completion of the facility will be a great catalyst to the growth of the data industry in the high-growth Iskandar region of Johor as well as a boost for KIDEX to become a regional data hub,” said Wan Murdani Mohammad, the Director of the Digital Infrastructure Services Division at MDEC.

Despite the international travel ban due to the COVID-19 pandemic, MDEC and TPM Technopark have increased promotional activities to attract developers from APAC who are seeking to expand or have a foothold in the region.

After welcoming their first data center investment, KIDEX has received strong investment interest from local and overseas data center developers as well as data center support services, equipment testing facilities and renewable energy generation plants to provide alternative power supplies to complement the existing 600MW capacity at the JCorp owned KIDEX.

“We strive to position KIDEX as an alternative data center hub to complement the existing data hub in Singapore, presenting KIDEX as the best option for data center players seeking to establish large scale or cost-competitive operations in the region,” added Mr. Mohammad.

According to JCorp, KIDEX is expected to attract a total of US$4.2 billion (RM17.5 billion) worth of investments from data center developers and support services as well as segments related to the data industry, including the Internet of Things, cloud computing, data storage, virtual and augmented reality, e-commerce, banking, artificial intelligence and software engineering.

What makes KIDEX an attractive place for investment?

Strategically located in the heart of Southeast Asia, with global connectivity, close proximity to Senai International Airport and dark fiber availability linked to nearby Singapore, KIDEX offers an opportunity for the local and international digital economy to grow.

For data center developers, KIDEX presents an attractive location, offering competitive land prices and ample land availability, which is particularly important at a time when neighbouring Singapore has a moratorium on new data center builds and sparser land availability.

TPM Technopark has developed KIDEX to feature closely located high, stable, redundant and abundant power of up to 600MW provided through dual sources of transmission, as well as a redundant water supply, rainwater catchment banks, and a planned independent natural gas and chilled water co-generation plant able to generate up to an additional 240MW of power.

KIDEX is designed to distribute 17 Million Liters Per Day (MLD) of potable water. To date two on-site elevated water tanks have been built and are able to supply a total of 10 MLD. Additional water supply can easily be made available upon an increase in demand from investors.

And as data center sustainability becomes more crucial to attract customers, data centers at KIDEX can leverage a planned solar power field and a water recycling plant for efficient power and cooling.

The Data Exchange also has main and service roads for easy access, inspiring green landscaping, high-tech security systems to keep data centers safe, and ‘Plug and Play’ capabilities for speedy deployment.

All this enables KIDEX to have infrastructure and utilities that will cater for Tier III data centers at a competitive cost.

“Data center developers and operators investing in KIDEX will enjoy higher return on investment on their projects due to the lower project investment cost and daily operational cost incurred,” said JCorp.

As for attracting customers to data centers, KIDEX is located at the center of a larger 7,290 acres of land development in Sedenak that will feature industries, retails and residences built to the theme of Industry 4.0, promoting the adoption of automation and data exchange in manufacturing technologies, including cyber-physical systems, IoT, cloud computing, artificial intelligence and smart factories.

The wider land development is also set to welcome investors from the logistics, electrical and electronic, and medical industries to Sedenak.

Looking beyond KIDEX, Malaysia has a good track record for being safe from natural disasters like earthquakes and tsunamis, which could damage a data center.

How will KIDEX benefit Southeast Asian society?

Malaysia’s data center market has also received exceptional support from the Malaysian Government through its agency, MDEC and the Malaysian Investment Development Authority (MIDA), who provides data center investors with support and incentives to grow the country as the leading regional hub for data center services.

“KIDEX spearheads the best that Malaysia has to offer to potential investors in the region,” said Mr. Mohammad.

KIDEX is one initiative of many that is developed to realise the physical development agenda of the Smart City Iskandar Malaysia (BPIM) project, which focuses on smart governance, smart people, smart mobility, smart environment, smart economy and smart living.

Its robust and stable data network infrastructure is expected to benefit the Government, businesses and the people in the Iskandar Malaysia economic corridor.

“KIDEX will not only help transform Iskandar Malaysia to become a metropolis of international standing, but it will also help realise the Digital Johor agenda at the State level, as well as the National Fiberisation and Connectivity Plan at the National level,” said JCorp.

On top of this, the KIDEX development will create 1,600 jobs in Malaysia, including 400 high-skilled IT, Mechanical and Electrical positions, 200 semi-skilled jobs in server and networking, and 1,000 jobs in support labour. And to assist the employees, KIDEX will spur the demand of 16,000 new houses to be built in the Sedenak area.

“KIDEX shall positively drive the vision of the Government towards Industry 4.0, cloud computing, artificial intelligence, smart factory manufacturing, e-commerce and many more, supporting the digitalisation of industries and the community in the Southeast Asia region,” said JCorp.

Overall, KIDEX signals Malaysia’s commitment to the global data center and digital communities, demonstrating that the country understands the needs and requirements of the data industry.

With rising demand for new data center developments and new projects in Malaysia from the likes of NTT, Vertiv, AIMS Data Centre, G3 Global and PCCW, the country is ready to be a reliable and competitive data hub to serve the exciting digitalisation of Southeast Asia.

Stuart Crowley, Editor at WMedia