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KUALA LUMPUR (Aug 28): Data centre and cloud-computing projects accounted for nearly half of Malaysia's approved investments in the first half of 2026 (1H2026), as overall approved investments rose 11.7% year-on-year to RM218.5 billion.
Data centre and cloud-computing projects attracted RM95.8 billion in investments during the six-month period, equivalent to nearly 44% of total approved investments, as demand for artificial intelligence (AI) computing power continued to grow across the region, the Malaysian Investment Development Authority (Mida) said in a statement on Friday.
The services sector accounted for the bulk of approved investments at RM149.6 billion or 68.5% of the total, followed by manufacturing at RM51.3 billion or 23.5%, and the primary sector at RM17.6 billion or 8%.
Within services, approved investments rose 21% year-on-year, while information and communications — which includes data centre and cloud-computing projects — surged 68.2% to RM103.3 billion.
Foreign investments rose 18.5% to RM126.9 billion and accounted for 58.1% of total approved investments, while domestic investments increased 3.5% to RM91.6 billion.
The US was the largest source of foreign investments at RM33.1 billion, followed by Singapore at RM25.9 billion, Japan at RM22.3 billion, China at RM16.5 billion and the Cayman Islands at RM4.1 billion. These five top foreign sources of investment accounted for more than 80% of approved foreign investments.
By location, Selangor attracted the most approved investments at RM70 billion across 835 projects, followed by Johor at RM59.4 billion, Kuala Lumpur at RM26.6 billion, Penang at RM20.2 billion and Sarawak at RM10.8 billion.
Mida chairman Tengku Datuk Seri Zafrul Abdul Aziz said the manufacturing sector saw semiconductor investment shift from back-end assembly towards front-end design and equipment, reflecting the implementation of the National Semiconductor Strategy.
"Guided by the New Industrial Master Plan 2030, Mida will continue to prioritise and implement investments that transfer technology, deepen local vendor participation and create high-value jobs for Malaysians,” he said.
Approved manufacturing investments, however, fell 25.1% year-on-year to RM51.3 billion, although the number of projects surged 88.2% to 973.
Mida said the decline was due to unusually large investments of RM18.5 billion in basic metals, chemicals and non-metallic minerals approved in the first half of 2025. Excluding these projects, manufacturing investments would have grown 2.6%.
Domestic manufacturing investments rose 23% to RM18.6 billion, while foreign investments accounted for RM32.7 billion or 63.8% of manufacturing approvals.
Meanwhile, approved investments in the primary sector surged more than fivefold to RM17.6 billion from RM3.5 billion, driven entirely by 23 offshore oil and gas projects.
The first-half figure has already surpassed the RM14.2 billion approved for the primary sector for the whole of 2025.
Mida reviewing RM72.1b proposals, another RM58.4b in potential leads
Looking ahead, Mida said it was reviewing 227 investment proposals worth RM72.1 billion as at Aug 10, comprising 128 services projects worth RM36.5 billion and 99 manufacturing projects worth RM35.6 billion.
Another RM58.4 billion worth of potential investments were under discussion, with the near-term pipeline concentrated in semiconductors, AI infrastructure, renewable energy and medical devices.
On the implementation of previously approved investments, Mida said 87% of the 5,822 manufacturing projects approved between 2021 and June 2026 had reached implementation stage, while 9.8% remained in the planning phase and 3.2% were not implemented.
More than 90% of manufacturing projects approved between 2021 and 2024 have been implemented, while the implementation rates for projects approved in 2025 and 1H2026 stood at 83.8% and 65.5%, respectively.
Mida chief executive officer Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said securing investment commitments was only part of Mida's role, as the agency also helps investors overcome regulatory and implementation hurdles to ensure approved projects materialise.
"Our engagement does not end at approvals: we stay involved to handhold projects and, through #InvestLokal, deepen the participation of SMEs and local vendors, so that each ringgit committed becomes real capacity and skilled employment for Malaysians,” he said.