KUALA LUMPUR, Nov 4 (Bernama) -- Kenanga Investment Bank Bhd anticipates a rise in demand for cloud services, including graphics processing units-as-a-service pioneered by Maxis Bhd locally, as global cloud service providers continue to invest heavily in data centres, cloud, and artificial intelligence (AI) infrastructure in Malaysia.
In a research note today, the investment bank noted that contrary to perception, the data centre boom is not creating an oversupply situation, and the power supply is not a constraint, as Tenaga Nasional Bhd (TNB) has sufficient capacity to meet demand.
“Thus, we believe players involved in various roles within the cloud industry, such as cloud service providers (CSP), distributors for global CSPs, managed-cloud service providers, software vendors and system integrators, stand to benefit, pointing the spotlight on Telekom Malaysia, Maxis, CelcomDigi, and OCK Group as well as Time, Dagang NeXchange, Vstecs and SNS Network,” it said.
Kenanga Investment Bank recently held a Data Centre and Cloud Day conference featuring spokespersons from YTL Power, Maxis, Telekom Malaysia, and TNB.
Meanwhile, the bank stated that TNB will be a long-term beneficiary, given the expected resilience in electricity demand from data centres.
“YTL Power does not expect delays in AI chip delivery to be delivered on schedule in the first quarter of 2025, while names to watch out for transmission and distribution include Southern Cable Group,” it said.
Kenanga Investment posited that local players involved in various roles within the cloud industry stand to benefit from higher adoption and demand for cloud services.
Additionally, it said these players may further boost earnings and differentiate their offerings by bundling connectivity solutions, including last-mile fibre and private 5G networks, with their integrated cloud offerings.
According to the note, TNB has received over 70 data centre project electricity supply applications in Johor and Klang Valley, with a total maximum demand exceeding 11,000 megawatts (MW).
“As of June 2024, 26 projects have signed energy supply agreements (ESA), with a total maximum demand of 4,000 MW.
“Of these, 16 projects (1,700 MW) have already been completed, and 190 MW of data centre capacity was operational as of June 2024, up from 150 MW in March 2024,” Kenanga said.
The bank said that after accounting for the schedules of expiring independent power producers and new plants coming online, TNB still has sufficient capacity to meet this high demand, assuming all 11,000 MW applications are approved.
Currently, Peninsular Malaysia’s total installed capacity is 27,385 MW, with grid demand at around 18,000 MW.
“On the other hand, TNB guarantees power supply once the ESA is signed.
“It has implemented a fast-tracked green lane process for high-voltage (HV) data centre connections, reducing the timeframe to 12 months compared to the typical 36 months for normal HV bulk supply processes,” said the bank.
It said TNB needs to upgrade the transmission and distribution system to accommodate data centre demand.
“Currently, there is no additional surcharge on this specific capital expenditure, as data centre users are billed under the commercial segment, which already has the highest tariff bracket.
“It is anticipated that the upcoming ‘regulatory period 4’ will address this,” it added.
-- BERNAMA
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