It has been reported that Johor, a state of Malaysia that was designated to be the ASEAN data center hub, is facing resource scarcity as the data center’s electricity demand is far exceeding than the state’s current power generating capacity by about ten times. Furthermore, the state is also hit with extreme drought to the point it needs to rely on Singapore’s water and construct new reservoirs.
Mr. Koraphat Vorachet, Division Head of Research at Krungsri Securities (KSS), viewed these limitations as an opportunity for Thailand as world class’ investors, such as Google, and about more than 20 middle-class investors, have applied with Thailand Board of Investment (BOI), reflecting the investment flow toward the nation’s data center business.
Thailand’s strengths that received high attention are its electricity system that is more stable than Malaysia, firm water source, and location that is close to South East Asia’s main internet hubs, such as Singapore and Hongkong. If Thailand can set its positioning correctly, there is a potential to become the data center hub of the CLMV region (Cambodia, Laos, Myanmar, and Vietnam), following Singapore and Malaysia.
Moreover, this development is likely to grow the share of some companies in certain industries. The details are as follow:
- The first industry to benefit from this is the power producer, and the companies that will likely see their shares grow are Gulf Development PCL (SET: GULF) and Global Power Synergy PCL (SET: GPSC).
- The second industry is the industrial estate such as WHA Corporation PCL (SET: WHA) and AMATA Corporation PCL (SET: AMATA).
- Next is the telecommunication/infrastructure industry such as Advanced Info Service PCL (SET: ADVANC) and True Corporation PCL (SET: TRUE).
- The data center construction such as Infraset PCL (SET: INSET) are also included as well.
- Finally, it is the digital transformation/integration industry such as Bluebik Group PCL (SET: BBIK).
