Malaysia - Country Commercial Guide
Information & Communications Technology

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-11-06


Malaysia’s Digital Transformation continues to drive demand for U.S. technologies in the information and communications technology sector (ICT) as Malaysia seeks to become the digital hub in Southeast Asia. Malaysia is focused on the development of connectivity, satellite broadband, digital infrastructure for buildings, 5G ecosystems, and smart automation. This provides U.S. companies opportunity in the near term to supply cybersecurity and digital technology.

Malaysia is strategically situated in the heart of the region, with easy access to other growing markets and robust infrastructure, connectivity, and economic stability. The ICT sector is one of the fastest-growing sectors in the Malaysian market, currently contributing 19.1 percent of the country’s GDP (2019) and is expected to reach 22.6 percent by 2025.

Based on a report from GlobalData Market Opportunity Forecasts, ICT spending in Malaysia will reach $25.2 billion by 2023. This spending will be supported by a growing rate of digital adoption and cloud computing in Malaysia. The leading growth areas in the ICT sector include cloud computing, data analytics, storage, cybersecurity, business process outsourcing, and mobility with the highest compound annual growth rate (CAGR) of 21 percent during the forecast period.

Overall, the manufacturing sector in Malaysia continues to be the highest contributor to total ICT spending. This trend is expected to marginally increase from 18.4 percent to 18.5 percent of the total ICT revenue between 2018-2023. Government policies, such as the Industry4WRD policy, play an essential role in promoting digitalization throughout all economic sectors and industries. Industry4WRD aims to transform the manufacturing sector and related services in the next five years.

In 2021, the Government of Malaysia (GOM) launched the MyDIGITAL ( initiative as a comprehensive approach designed to anchor the country’s digital economy by 2030. This initiative serves as part of the government’s plans to transform Malaysia into a digitally driven, high income nation and a regional leader in digital economy. MyDIGITAL is implemented via the Malaysia Digital Economy Blueprint, and will take place in three phases. Phase One (2021-2022) is focused on strengthening the foundation of digital adoption. Phase Two’s (2023-2025) aim is to drive inclusive digital transformation. Phase Three’s goal (2026-2030) is to make Malaysia a digital content and cybersecurity lead in the regional market.

As part of the effort to accelerate innovation and create an efficient digital ecosystem, the GOM sets out four key digital infrastructure projects under MyDIGITAL that will be executed via Malaysia Digital Economy Blueprint. These projects will be implemented through Public Private Partnerships in which the private partners with suitable financial capacity and technical competency will contribute via capital and skills injection. The four key projects are as follows:

  • $5.06 billion to be invested over five years through the National Digital Network (JENDELA) project to strengthen existing connectivity.
  • $39 million to be invested by several telecommunications companies to strengthen connection to the international subsea cable network until 2023.
  • $3.57 billion to be invested over 10 years for the implementation of 5G nationwide. This is expected to create approximately 105,000 job opportunities.
  • $2.85 – $3.57 billion to be invested by Cloud Service Provider (CSP) companies over the next five years to increase data storage space, reduce operating costs and improve analytical efficiency.

ICT Revenue and Growth in Malaysia

ICT Revenue and Growth in Malaysia
ICT Revenue and Growth in Malaysia

6: Source: GlobalData Market Opportunity Forecasts 2020

Leading Subsectors

The leading ICT subsectors in Malaysia are cybersecurity and data systems integration, which can include Internet of Things, Big Data Analytics, cloud computing, and Artificial Intelligence. Malaysia is also focused on 5G implementation to improve the country’s connectivity. U.S. companies are well-positioned to compete in the market by exporting ICT products and services that offer quality and innovation in these areas.

The GOM budget for 2021 and the Economic Stimulus Package 2020 provides strong incentives in digital transformation, connectivity, security, satellite broadband, digital infrastructure for buildings, 5G ecosystems, and smart automation.


Cybersecurity: Malaysia’s cybersecurity industry, which can include Internet of things, Big Data Analytics, cloud computing, and Artificial Intelligence, is ranks third globally and is ranked third among 193 countries in terms of its commitment to cybersecurity, according to the 2018 Global Cybersecurity Index. The estimated value of Malaysia’s security services market in 2021 is Artificial Intelligence $6.37 million. The top 10 percent of job opportunities in Malaysia are related to cybersecurity.

Cybersecurity is identified as one of the top priorities for the GOM due to the drastic increase in cybersecurity threats. In 2019 alone, Frost & Sullivan reported that the potential economic loss in Malaysia due to cybersecurity incidents is $12.2 billion. This loss is more than 4 percent of Malaysia’s total GDP of $2.96 billion. 

In the past, Malaysian companies have not prioritized cybersecurity due to budget cuts. However, the current global pandemic is pushing more companies to go digital, thus creating demands for cybersecurity solutions to protect the vulnerability of their companies.

Cybersecurity Demand by Industry
Cybersecurity Demand by Industry



Source: Malaysia Digital ; Economy Corporation

In 2020, the GOM launched the Malaysia Cyber Security Strategy (MCSS) 2020-2024 with an allocation of $4.3 million to step up national cybersecurity preparedness and upgrade the country’s cybersecurity measures. This cyber strategy outlines five pillars to guide and improve the country’s cybersecurity management in the next five years. 

The first pillar is to boost the management of national governance and cybersecurity by improving Malaysia’s critical ICT infrastructure. The second pillar focuses on bolstering the enforcement of current cybersecurity laws by reviewing related legislation and formulating laws on cybersecurity. The remaining pillars are focused to empower innovation, improve cybersecurity talents in Malaysia, and leverage regional and international cooperation to protect the country’s cyberspace.

This cyber strategy also identified eleven critical national infrastructure sectors. They include national defense and security, banking and finance, ICT, energy, transportation, water, health services, government bodies, emergency services, and food and agriculture.

Data Systems Integration: The GOM has identified data system integration as a critical tool to accelerate digitalization across all industrial sector with the implementation of digital technologies such as artificial intelligence, the Internet of Things (IoT), Big Data Analytics (BDA), and cloud computing.

Cloud Computing: Cloud adoption is primarily concentrated among Malaysia’s larger enterprises, while adoption among SMEs is relatively low. Microsoft’s Digital Transformation Study, however, found 79 percent of businesses in Malaysia acknowledged cloud computing as essential for digital transformation. According to 81 percent of companies in Malaysia, cloud computing and the decreasing cost of devices have made it more affordable for companies of any size to transform digitally. To encourage the adoption of digital technologies, the GOM is offering wide-ranging incentives. These incentives include tax breaks for the E&E sector and related intellectual property, automation equipment capital allowance for services, provision of incentives for digitalization, and innovation efforts as well as a $4.6 billion Industry Digitalization Transformation Fund.

Internet of Things: The IoT industry is expected to contribute $2.2 billion to the gross national income of Malaysia by 2020 and $9.8 billion by 2025. Malaysia is in an excellent position to seize the economic opportunities generated in IoT due to the country’s high penetration rates in mobile and internet, an established E&E sector, and strong support from various government initiatives.

A major challenge in the growth of the national IoT industry is the lack of a comprehensive IoT ecosystem with no standards in technology, and concernsaboutthe level of security and privacy in the country. To tackle this issue, the GOM established The National IoT Roadmap, which aims to drive Malaysia to be the premier regional IoT development hub, with the objective of creating a national ecosystem that enables the use and industrialization of IoT as a new source of growth for the national economy.

Big Data Analytics: The BDA software market in Malaysia is forecasted to reach $138 million by 2021.  BDA revenue is expected to achieve a CAGR of 8.8 percent over the year 2016 to 2021 forecast period. BDA is identified as an essential tool for the growth of businesses through several digital adoption and implementation processes.

Data Centers: The data center industry in Malaysia is expected to grow over the next five years due to strong growth from both local and international providers. Malaysia’s data center market size is likely to reach revenues of more than $8.0 million by 2025.

Malaysia is becoming a regional hub for many businesses, and this is driving more organizations to invest in cloud systems, which are, in turn, driving the need for more local data centers. The high concentration of international CSP in Singapore has led some to choose Malaysia as a secondary market location for business continuity and disaster recovery, and to support their primary sites in Singapore.

The primary drivers for data center services include an increased demand for cloud services, a higher focus on digitalization of businesses, and government expansion of digital policies. U.S. companies such as IBM, Microsoft, and Amazon Web Services and local participants, such as TM One and AIMS, are some of the cloud vendors that are expanding their infrastructure and availability in Malaysia. On April 20, 2021, Microsoft announced that the company will establish its first data center in the Greater Kuala Lumpur area. The project is estimated to cost $1 billion.

Smart Cities: Smart Cities, an important government initiative that incorporates various leading industry sectors, e.g. ICT, Greentech, smart grid, transportation, and infrastructure, and touches on key policy issues such as 5G, cybersecurity, and RE are currently being discussed in the private and public sectors. The three main pillars of Smart Cities are Smart and Sustainable Solutions, Smart Planning and Smart Infrastructure and Technologies

Based on the ASEAN Smart City Network (ASCN) goals of facilitating cooperation on smart city development, catalyzing bankable projects with the private sector, and securing funding and support from ASEAN’s external partners, the United States established the U.S.-ASEAN Smart Cities Partnership (USASCP) to develop and explore activities and programs that will benefit the ASCN. The concept note for the ASCN can be viewed at ASEAN website.

The USASCP is intended to be a flexible, responsive, and multiyear commitment to ASEAN. The Partnership will be able to help address smart city challenges across a range of sectors especially in the areas of infrastructure, energy and information, and communications technology. The Partnership will consider the ASEAN Smart Cities framework and draw upon individual Smart City Action Plans to inform specific programming and activities. Of the 26 ASCN pilot cities, four are in Malaysia.

5G in Malaysia: One key focus in the MyDIGITAL initiative is to bring forward the plan to roll-out next generation mobile 5G technology from 2021 to 2022. Deployment of 5G will provide Malaysia with digital connectivity and robust infrastructure as 5G can deliver higher multi-Gbps peak data speeds, ultra-low latency, increased reliability, massive network capacity, and a uniform user experience to subscribers. In 2021, the GOM established a special purpose vehicle (SVP) under the Ministry of Finance, Digital Nasional Berhad (DNB), that would be responsible for the development of 5G infrastructure nationwide and the management of Malaysia’s 5G spectrum.

In March 2021, the GOM opened a rigorous tender exercise, including Huawei, ZTE, Cisco, NEC, Nokia, Samsung, Ericsson, and FiberHome to bid for the project. After the vetting process, DNB has appointed Ericsson to design and build the national 5G network at a total cost of $2.6 billion. The nation aims to launch 5G services by the end of 2021 in Kuala Lumpur, Putrajaya, and Cyberjaya. It will also launch services in five major cities and districts in Selangor, Pulau Pinang, Johor, Sabah, and Sarawak by 2022. DNB expects to roll out services to cover 17 cities and rural areas from 2023 onwards. U.S. technology companies can explore commercial opportunities to be part of the 5G ecosystem in Malaysia as the country is open to explore advanced and cutting-edge expertise in this area.


  • ASEAN Framework on Digital Data Governance
  • ASEAN Smart Cities Network eBook
  • Big Data Analytics Forecast
  • Department of Statistics Malaysia
  • Data Localization Policy
  • Energy Commission
  • Global Data Market Opportunity Forecasts
  • Global Security Index
  • Malaysia BDA Framework
  • Malaysia Budget 2020 for the ICT Sector
  • Malaysian Data Center Services Size & Market
  • Malaysia Data Center Overview
  • Malaysia Digital Tax 2020
  • Malaysia Digital Economy Blueprint
  • Malaysia Economic Stimulus Package 2020
  • Malaysia ICT Policy and Guidelines
  • Malaysia IoT Industry Overview
  • Malaysia Green Technology Corporation (Greentech Malaysia)
  • Malaysia National IoT Strategic Roadmap
  • Microsoft to Establish Data Center in Malaysia