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Malaysia
This Week in AsiaEconomics

Malaysia wants to splash out on tech sector, but heavy water demand hard to quench

  • The country’s water crisis could worsen due to huge demand for the resource from data centres and chip manufacturers, analysts say

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Workers replace water valves at the Sungai Dua water treatment plant as Penang’s Chief Minister Chow Kon Yeow inspects their progress in Penang on January 10. Photo: AFP
Joseph Sipalan
Malaysia’s aggressive push to become a technology-driven economy threatens to worsen its water crisis as experts warn the country’s infrastructure could struggle to cope with heavy demand for the resource from the industry’s water-hungry facilities.
Prime Minister Anwar Ibrahim’s administration has laid out an ambitious plan to reap the spillover benefits of the US-China tech war by luring big-name investments to Malaysia as it positions itself as a regional hub for sectors ranging from high-end chip production to green energy.

In the past three years, Malaysia has secured billions of dollars worth of new semiconductor and data centre investments. According to some analysts, Malaysia is projected to become a major player in the global data centre space by the end of the decade.

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But tech facilities like semiconductor factories and data centres need voluminous levels of treated water in particular to maintain their stringent production standards and efficient operations.

“We need new streams, new taps,” said Charles Santiago, head of the National Water Services Commission, referring to new sources of water.

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“We can’t depend on the old taps because they are uncertain right now … you don’t know if there is going to be too much or too little rain, and droughts have become longer.”

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