Moody’s expects SE Asia data center capacity to grow 24% annually

By Romel S. Gurky

Moody’s Ratings expects data center capacity in South and Southeast Asia to grow at a compound annual growth rate of 24 percent over the next four to five years, supported by rising demand for digital infrastructure and cloud services.

The rating agency said South and Southeast Asia currently account for more than 3.5 gigawatts of operational data center capacity globally, with capacity projected to double by 2030. Growth is expected to increasingly spread to markets including India, Malaysia, Indonesia, Thailand, and Vietnam.

Moody’s said Southeast Asia is evolving into a multi hub data center ecosystem anchored by Singapore, while emerging markets are benefiting from land availability, lower costs, and regional spillover demand.

Singapore remains the region’s largest data center hub with an estimated 1 gigawatt of installed capacity, supported by submarine cable connectivity and a stable regulatory environment. However, land, power, and sustainability constraints are pushing operators toward a hub and spoke deployment model with additional capacity developed in nearby markets.

Malaysia, particularly Johor, has emerged as a major alternative market with around 897 megawatts of installed capacity and a large development pipeline. Moody’s said the state has attracted investments from hyperscalers including Microsoft, Oracle, and ByteDance.

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Indonesia, led by Greater Jakarta and Batam, has data center capacity exceeding 300 megawatts, driven by domestic digital demand, data localization requirements, and demand from global hyperscalers and local technology companies.

Moody’s said developers in Indonesia and Malaysia continue to face challenges related to power and water availability, grid reliability, and regulatory complexity.

Thailand and Vietnam are also emerging as growing markets supported by increasing enterprise demand and cloud adoption, while the Philippines continues to expand gradually through enterprise and outsourcing sector demand.

The report said Chinese hyperscalers and data center operators are expanding in Southeast Asia to diversify operations and support multinational clients. Companies including GDS Holdings and Bridge Data Centres are increasing their presence in markets such as Malaysia, Indonesia, and Thailand.

Moody’s said future growth in the sector will depend on power availability, grid stability, execution capability, and regulatory support across emerging markets.

Editing by Alexander Ginting