Equinix Enters Malaysia with $40M Data Center Investment

Rhea-AI Summary

Equinix, Inc. (Nasdaq: EQIX) has announced its entry into Malaysia with a $40 million investment in a new International Business Exchange (IBX) data center located in Johor, named JH1. Scheduled to begin operations in Q1 2024, JH1 will offer 500 cabinets and 1,960 square meters of colocation space. This expansion aligns with Malaysia's digital economy objectives, projected to reach $34 billion by 2025. The new facility aims to facilitate the growth of local businesses and attract foreign investment, further cementing Equinix's position in the Asia-Pacific region.

Positive

• Investment of $40 million into the Malaysian market.
• New IBX data center in Johor to offer 500 cabinets and 1,960 square meters of colocation space.
• Alignment with Malaysia's digital economy goals, projected at $34 billion by 2025.
• Potential to enhance local businesses' growth through access to Platform Equinix and a vast ecosystem of partners.

Negative

• None.

KUALA LUMPUR, Malaysia and REDWOOD CITY, Calif., Nov. 30, 2022 /PRNewswire/ -- Equinix, Inc. (Nasdaq: EQIX), the world's digital infrastructure company™, today announced its market entry into Malaysia with plans to build a new International Business Exchange^TM (IBX®) data center located in Johor, called JH1. With an initial investment of approximately $40 million, JH1 is scheduled to begin operations in Q1 2024, providing 500 cabinets and 1,960 square meters of colocation space. The world-class IBX data center will support Malaysian companies and multinationals doing business in Malaysia with access to Platform Equinix® to bring together and interconnect the foundational digital infrastructure that powers their success. 

Malaysia's digital economy is forecast to reach $34 billion in Gross Merchandise Value by 2025,¹ with the country on course to achieve a digital economy contribution to Gross Domestic Product of at least 25.5% the same year.² Equinix's expansion in Malaysia will unlock opportunities for Malaysian businesses expanding internationally and for multinational corporations pursuing growth and innovation in the Malaysian market. Malaysian companies will benefit from the ability to accelerate their evolution from traditional to digital businesses by rapidly scaling their infrastructure, easily adopting hybrid multicloud architectures and interconnecting with strategic business partners within the Platform Equinix ecosystem of more than 10,000 customers.

Equinix's expansion in Malaysia is in line with the MyDIGITAL initiative launched by the Malaysian Government, which aims to provide a blueprint for the country to accelerate growth of digital products and services. Datuk Onn Hafiz Ghazi, Chief Minister of Johor, said: "While the digital economy represents a catalyst for the Malaysian economy, data centers are integral in supporting digital ecosystems and their sustained growth. We welcome this investment by Equinix, along with the global expertise they bring to Johor, as well as the rich digital experiences and outcomes that will benefit this state and the country. We are looking forward to working together, in transforming Malaysia into a digitally driven, high-income nation at the forefront of this region's digital economy."

This expansion marks Equinix's second foray into ASEAN (the Association of Southeast Asian Nations) following the recently announced plans to expand into Indonesia, allowing the company to address digital infrastructure demand critical to the region's digital growth. Jeremy Deutsch, President, Asia-Pacific, Equinix, commented: "Establishing a presence in Johor strengthens Equinix's leadership position in Asia-Pacific within a strategic market such as Malaysia, one of the most requested markets in Asia-Pacific by our global customers. I would like to express our gratitude to the Digital Investment Office (DIO), Invest Johor, and Tenaga Nasional Berhad (TNB) for their assistance and support. We look forward to deepening our collaboration through future expansion, maximizing local businesses' digital growth potential with rich digital experiences and outcomes."

Highlights / Key Facts

• JH1, a two-story facility, will be located at Nusajaya Tech Park (NTP) in Iskandar, Johor. It is 15 kilometers from Singapore, allowing the data center to address excess demand from organizations in the city-state in addition to Malaysian domestic demand.
  
  
• Equinix also has the option of acquiring additional land in NTP to build a second facility, supporting Malaysia's digital growth aspirations. Companies and multinationals doing business in Malaysia will be able to access Platform Equinix to store and distribute large volumes of latency-sensitive data and applications closer to end users and local markets.
  
  
• Today, Malaysia is one of the top three colocation markets in ASEAN, with momentum driven by growing demand and investment from hyperscalers and cloud service providers, as well as national policies favorable for digital growth. According to Synergy Research, the Malaysia data center market is expected to grow at a compound annual growth rate (CAGR) of nearly 10% during 2021–2026.³ This shows the need for increased digital services and data center services capacity in Malaysia.
  
  
• As indicated in the Global Interconnection Index (GXI) 2023, organizations are connecting to three times as many business ecosystem partners and metros, consuming more than twice the amount of interconnection bandwidth on average in the past five quarters than in the previous five years. Organizations need access to ecosystems comprising network companies, cloud and system integrator companies, and enterprise customers who can take advantage of a full platform service across a global footprint. The Johor data center will provide organizations with access to vibrant ecosystems made up of more than 2,100 networks and over 3,000 cloud, IT and system integrator services that Equinix works with globally.
  
  
• When opened, the new IBX data center in Johor will increase Equinix's total global footprint of more than 245 data centers across 71 metros and 32 countries, providing Equinix's 10,000+ customers more ways to securely deploy, directly connect and effectively scale their digital infrastructure in a rapidly growing economy. It is expected to also present opportunities for further expansion into new metros and market segments in Malaysia.
  
  
• In Asia-Pacific, Equinix currently has 51 data centers across 13 metros across Australia, China, Hong Kong, India, Japan, Korea and Singapore. In addition, Equinix also announced expansions into Chennai in India, and Jakarta in Indonesia in 2022, strengthening its market leadership in the region.

Additional Quote 

Ts. Mahadhir Aziz, CEO of Malaysia Digital Economy Corporation (MDEC), Malaysia's lead digital economy agency
"We welcome Equinix's investment via the JH1 data center and we are proud to have facilitated their market entry into Malaysia. This new upcoming facility will enhance Malaysia's capabilities and further strengthen the country's digital infrastructure backbone, in line with the new national strategic initiative, Malaysia Digital. MDEC will strive to facilitate further effective collaborations in our bid to firmly establish the nation as the digital hub of ASEAN."

Supporting Resources

• Equinix Expands to Indonesia with $74M Data Center Investment [press release]
• Equinix Invests Over $86 Million to Build Its Third Data Center in Mumbai [press release]
• Equinix Invests Over US$9 Million to Acquire Land in Chennai for Expansion [press release]

About Equinix
Equinix (Nasdaq: EQIX) is the world's digital infrastructure company. Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.

Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, risks to our business and operating results related to the COVID-19 pandemic; the current inflationary environment; foreign currency exchange rate fluctuations; increased costs to procure power and the general volatility in the global energy market; the challenges of acquiring, operating and constructing IBX and xScale^® data centers and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; risks related to our taxation as a REIT and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent and upcoming Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.

¹ https://economysea.withgoogle.com/home/
² https://www.mida.gov.my/mida-news/digital-economy-able-to-contribute-25-5pc-towards-malaysias-gdp-by-2025/
³ Synergy Research Group, Colocation Forecast, Mar, 2022

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SOURCE Equinix, Inc.

FAQ

What is Equinix's recent investment in Malaysia?

Equinix announced a $40 million investment to build a new IBX data center in Johor, Malaysia.

When will Equinix's data center in Johor begin operations?

The JH1 data center is scheduled to start operations in Q1 2024.

What are the features of the new Equinix data center in Malaysia?

The new data center will provide 500 cabinets and 1,960 square meters of colocation space.

How does Equinix's expansion in Malaysia support local businesses?

It provides access to Platform Equinix, enabling rapid scaling and digital transformation for local companies.

What is the projected digital economy value for Malaysia by 2025?

Malaysia's digital economy is expected to reach $34 billion by 2025.