Equinix doubles down in Malaysia with accelerated KL1 data center completion

Beyond Malaysia and Singapore, Equinix has announced plans to enter Indonesia with a US$74 million investment, acquire three data centers in the Philippines, and invest approximately US$500 million in Thailand, though several of these projects remain in developmental stages.

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Equinix Inc has completed the second phase of its KL1 International Business Exchange (IBX) data center in Kuala Lumpur, adding 450 cabinets to the facility. The expansion comes as Malaysia works to establish itself as a competitive player in the region's increasingly crowded data center market.

This development represents Equinix's continued investment in Southeast Asia, where several global and regional operators are racing to build digital infrastructure. The expansion comes less than a year after Equinix launched operations in Malaysia in 2024.

According to the company’s statement, the KL1 facility has attracted customers across cloud and IT services, content and digital media, enterprises, and network providers, though specific occupancy rates were not disclosed.

We've seen encouraging momentum over the past year, with both our Kuala Lumpur and Johor facilities gaining traction among local and international businesses," said Cheam Tat Inn, Managing Director of Malaysia, Equinix.

"Completing KL1's second phase within the first year of our operation in Malaysia signals our deep commitment to helping the nation become a strategic location in the region's digital economy."

This development follows Equinix's established pattern of market expansion, where it typically enters new territories with smaller initial deployments before scaling based on customer uptake.

The company has interconnected its Malaysia data centers (KL1 and JH1) with its established Singapore campus via Equinix Fabric, creating what it describes as a cross-border ecosystem with more than 1,000 companies across multiple sectors.

The timing of Equinix's expansion coincides with ASEAN's growth as a region for foreign direct investment. According to ASEAN reports, FDI reached US$235 billion in 2024, with projections suggesting it could reach approximately US$300 billion annually by 2030.

ASEAN exports are forecast to grow by 6.7% annually through 2030, compared to the global average of 5%. Equinix faces competition in the region, where local providers and other global operators like Digital Realty, NTT, and ST Telemedia are also expanding their footprints.

Malaysia, in particular, has seen increased data center investment, with companies attracted by relatively lower power costs compared to Singapore and government incentives designed to boost the digital economy.

For Malaysian businesses, industry observers note that this expansion could potentially improve access to global digital ecosystems and cloud services, while offering international companies another option for entering Malaysia's digital economy.

Overall, the data center market in Malaysia has grown increasingly competitive, with multiple providers vying for enterprise and cloud customers. Equinix's expansion suggests confidence in continued demand despite regional economic headwinds and concerns about power consumption and sustainability that have affected data center development throughout Southeast Asia.

Meanwhile, the Malaysian government has identified digital infrastructure as a priority sector in its economic development plans, offering various incentives to attract investments. However, challenges remain, including power grid reliability, skilled workforce availability, and balancing economic growth with environmental sustainability goals.

Equinix's continued investment in Malaysia indicates the company sees long-term potential in the market, though actual returns will depend on customer adoption rates and the broader economic environment in the coming years.