KUALA LUMPUR: The government will only approve data centre projects after ensuring that energy and water supply capacity is sufficient to meet the needs of the people and local industries.
Investment, Trade and Industry Deputy Minister Sim Tze Tzin said the Data Centre Task Force (DCTF) was established to comprehensively study the entire data centre ecosystem by examining each application based on power and water supply capacity before approval is granted.
He said the government will be responsible for ensuring that the energy supply does not burden the people, while the water supply will continue to be prioritised for residents before any approval is given to data centre companies based on the existing surplus capacity.
“The water supply must be prioritised for residents and Malaysians. So, only when there is excess capacity will we approve it for the data centre companies,“ he explained.
Sim said this while answering an additional question from Datuk Wira Dr Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) in the Dewan Rakyat today regarding the government’s steps and strategies to mitigate energy and water usage by data centres so that it does not affect the energy and water needs of industries and residents in Malaysia in the long term.
Sim noted that Malaysia still has excess capacity to meet the demand from applications handled by the DCTF.
Earlier, Sim said the implementation of the National Semiconductor Strategy has begun to show encouraging results, with approved investments in the semiconductor sector reaching RM91.9 billion from January 2024 to March 2026.
The contribution of foreign direct investment amounted to RM82.9 billion, while domestic direct investment (DDI) totalled RM8.9 billion.
“The government is also focusing on talent development with a target of training 60,000 workers. By December 2025, 18,062 local talents had been trained, reflecting encouraging progress and keeping the initiative on the right track,“ Sim said in response to a question from Chong Zhemin (PH-Kampar) regarding the government’s strategy to attract new investments in the semiconductor and artificial intelligence sectors to ensure Malaysia remains competitive in the region.
