Malaysia must prioritize supply chain planning for AI data center growth

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Highlights

BMI research expects Malaysia to have 4.6GW of data center capacity planned or under construction, with an increasing focus on AI projects.
Data center operators in Malaysia are facing supply chain pressure due to tighter construction timelines and demand for specialized materials and labor.
Panduit recommends that operators integrate supply chain planning early, use standardized architectural designs and adopt lifecycle-based procurement to reduce the risk of delays or component shortages.

This article was translated from the original. Read the original version by our correspondent here.

The need for early planning for data center projects

As reported by The Edge Malaysia, Simin Sirun, regional business director for ASEAN, India and Korea at Panduit, said network and data center operators need to view supply chain planning as a key component of infrastructure design.

She said supply chains across the Asia-Pacific region are becoming increasingly complex amid rising investment in AI, cloud infrastructure, advanced manufacturing, digitalization and data centers, all of which require more specialized materials and manufacturing capacity. In Malaysia, this is further compounded by the rapid pace of project approvals and implementation.

According to Sirun, customers increasingly need infrastructure delivered within tighter construction and power-on schedules. This puts pressure not only on component availability, but also on demand forecasting, qualification, logistics and installation capacity.

She recommended that operators integrate supply chain planning into infrastructure design at an earlier stage, including by defining architectures early and using standardized, scalable connectivity platforms. This, she said, can reduce the risk of failure across demand forecasting, production capacity, component qualification, logistics and final installation if specifications and alternatives are not aligned with construction schedules.

Sirun also highlighted localization as another way to strengthen supply chains. She said the shift should begin with early supplier engagement, standardized designs, approved alternative configurations and stronger collaboration among developers, consultants, contractors and infrastructure providers.

Implications for Malaysia's 4.6GW capacity rollout

Research by BMI, a Fitch Solutions company, estimates that Malaysia has 4.6GW of data center capacity planned or under construction, with a growing focus on AI-based projects. Sirun said the key structural risk lies in the potential mismatch between the pace of data center development and the readiness of the broader supporting ecosystem to enable coordinated and reliable scaling.

She said that while power availability is certainly a major concern for data centers, operators must not overlook transmission and distribution capacity, planning approvals, skilled labor, connectivity, cooling and the availability of critical infrastructure components if they want to ensure successful data center deployment.

According to Sirun, Malaysia needs to prioritize coordinated planning among government agencies, utilities, developers, technology providers and supply chains to ensure smooth data center deployment. She added that the country has a strong foundation in its manufacturing ecosystem, skilled talent and strategic connectivity to regional markets.

For data center operators in Malaysia, she said the most important change to protect target power-on timelines is to move from transactional procurement to lifecycle- and schedule-based procurement. In AI data center projects, she said, selecting infrastructure based solely on unit price can create greater risks if products cannot be supplied, integrated, installed or scaled within the required timeframe.

Previously, we outlined how approval of 27 data center projects by the data center task force through July 2026 is accelerating Malaysia's digital infrastructure development.

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