26/03/2025

BIZ & FINANCE WEDNESDAY | MAR 26, 2025

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AirAsia buoyed by strong recovery, strategic expansion

M’sian data centres – 2025 is year of execution, says Public Investment Bank KUALA LUMPUR: Malaysia’s investments in data centres have shown no signs of delays and the country remains in an attractive spot due to its proximity to Singapore, itself a major data centre hub with a relatively low-cost base, said Public Investment Bank Bhd (PIVB). In a note yesterday, the investment bank said 2025 is the execution year for Malaysia’s data centre projects despite concerns over US curbs on export of artificial intelligence (AI) chips, US chip tariffs and the emergence of China’s AI startup DeepSeek’s open-sourced R1 model. It said the surging demand for hyperscale data centres is fuelled mainly by growing AI adoption technologies, including machine learning, deep learning, natural language processing and large language models. “Training AI models and large-scale data processing require huge computational power, which increases energy consumption. To meet the growing demand, tech companies are deploying thousands of chips in clusters, driving a surge for specialised data centres. “Malaysia’s land and fibre connectivity, coupled with a higher power reserve margin of 28% to 36% make it an ideal location for these large-scale facilities,” it said. According to PIVB, 2025 is the year of execution following a series of committed investments by the global cloud providers, namely, Google, Microsoft, ByteDance, Amazon Web Services, and Oracle with a pipeline of new data centre projects totalling 1,313 megawatts (MWs). “Hence, we believe there will be active open tenders in the near term for various job scopes ranging from data centre designs, power cabling, power installation, liquid cooling, clean room, uninterruptible power systems, backup power, building automation, server cabinets to security systems,” it added. In the meantime, PIVB said Malaysia’s technology sector came under heavy selling pressure recently, rattled by concerns over a potential US recession and other uncertainties such as tariff threats, sustainability of the spending budgets for AI data centre projects, China’s rising AI threat, and US’s AI chip export curbs. “At this junction, the technology valuation looks appealing. However, Malaysian tech companies’ earnings visibility remains weak in view of a challenging operating environment caused by external factors. “On the ground, we gather that customers are mostly placing short-term orders as back end clients remain cautious about spending despite a robust front-end semiconductor orders,” it said. PIVB has an “overweight” call on the sector. – Bernama Bursa designates CSI Platform for sustainability reporting PETALING JAYA: Bursa Malaysia Bhd yesterday announced the readiness of its Centralised Sustainability Intelligence Platform (CSI Platform) to support ISSB IFRS S1 and S2 disclosure requirements adopted under the National Sustainability Reporting Framework. With this development, CSI Platform will accordingly serve as the exchange’s designated sustainability reporting channel for all public listed companies. As part of the designation, the platform has been enhanced to include IFRS reporting modules alongside its Scope 1 and Scope 2 carbon calculator, all of which are available to PLC at no cost.

KUALA LUMPUR: Malaysia’s commitment to tightening regulations on semiconductors sends a positive message to the global market, especially the United States, as it demonstrates the country’s seriousness in addressing security concerns. Malaysia Semiconductor Industry Asso ciation (MSIA) president Datuk Wong Siew Hai said that by strengthening regulations within the industry, the government can ensure that there are no loopholes for any parties to perform suspicious activities. On Monday, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz was quoted in a report as saying that the government is planning to strengthen its regulation on the semiconductor sector in response to US pressure to prevent the unauthorised flow of advanced artificial intelligence (AI) chips to China. “Based on recent authorities’ investigation on the suspicion of unauthorised transfer of advanced AI chips to China via our country, there was no evidence found. So the only way is to tighten regulations to ensure we put in place a control measure that will address the SEPANG: AirAsia is set for a strong financial year in 2025 driven by strong recovery, strategic expansion and operational effi ciencies. AirAsia Aviation Group Ltd group CEO Bo Lingam said over 30 new routes will be introduced this year to strengthen Asean and domestic connectivity, thus reinforcing its position as the region’s leading low-cost airline. “This year, as we return to full capacity, we will be balancing growth with profitability. Our network strategy will prioritise strategic and demand-driven connectivity across Asia,” he said at a media briefing here yesterday. Furthermore, he said, the airline expects to operate a fleet of 234 narrowbody aircraft this year across the group’s five short-haul airlines, restoring full pre-pandemic capacity. “Only 16 aircraft remain to be reactivated, while 14 new aircraft deliveries have been confirmed for 2025, four from Airbus and 10 via lessors,” he said. Bo said the group’s vision is to make Kuala Lumpur at par with Dubai as a busy and world-class aviation hub. Asked on additional new aircraft, he said discussion is ongoing actively with three manufacturers – Airbus, Embraer and Comac. He said the decision is likely in June this year, to ensure technical specifications of single-aisle aircraft are efficient to serve AirAsia’s routes. In December last year, Capital A Bhd CEO Tan Sri Tony Fernandes was reported as saying AirAsia was looking to expand its fleet with at least 100 new aircraft to supplement its Airbus A321s. o More than 30 new routes will be introduced this year to strengthen Asean and domestic connectivity

Farouk (centre) speaking during the AirAsia Insight Media Briefing at AirAsia RedQ yesterday. Flanking him are chief, strategy & investor relations (AirAsia Aviation) Azita Nazrene (left) and Bo. – BERNAMAPIC

Malaysia has been classified as a Tier-2 country, permitted to import only 50,000 graphics processing units over two years, with data centre operators restricted to deploying a maximum of 7% of their computing capacity in any single Tier-2 nation. According to Wong, MSIA has been trying to engage with personnel responsible for the tier system in the US Embassy in Kuala Lumpur to have a dialogue to find out how and why Malaysia is classified as a Tier-2 country. “Right now we need to understand what criteria they are using to classify us in order for us to see how we can improve and move out of Tier-2 status.” However, PIVB noted that there is concern over potential US chip tariffs on semiconductors after US President Donald Trump said in February that he planned to impose tariffs on semiconductors at 25% or higher though it is unclear when this decision could be made. “In this context, we think there should not be a significant impact on the Malaysian technology sector as a whole given that there are only a handful of foundries in Malaysia and only two players have dealings with the US markets,” it said. – Bernama “Our mega hubs in Kuala Lumpur and Bangkok-Don Mueang will continue to anchor Fly-Thru growth, currently handling 95% of Fly-Thru traffic. “At the same time, we will expand other hubs and look forward to adding over 1,700 weekly return flights and 323,336 weekly seats across the group by the end of 2025,” he said. Meanwhile, deputy group CEO Farouk Kamal said AirAsia is exploring refinancing options to reduce interest costs on its US dollar-denominated debt, which currently stands at around 11 to 12%. He said by securing financing from domestic banks, the rate is expected to be lowered to 7 to 8%. Farouk said the move will result in significant interest cost savings for the group, adding that the financing will be obtained through domestic banking institutions, including the potential issuance of domestic bonds. – Bernama

loophole in our system,” he told Bernama. According to a Financial Times report, Tengku Zafrul said the US government has asked Malaysia to closely track the movement of high-end Nvidia chips into the country amid suspicions that the chips are diverted to China, hence violating US export rules. This came after Singapore’s authorities charged three men over the alleged fraudulent movement of Nvidia chips earlier this month and its Law and Home Affairs Minister K Shanmugam said the servers in the fraud case may have contained Nvidia’s chips which were then sent to Malaysia. Meanwhile, Public Investment Bank Bhd (PIVB) opined that the move to strengthen the flow of Nvidia’s chips could potentially have a negative impact on AI server dealers and AI server assemblers in Malaysia. The deliveries would slow down subject to authority scrutinisation,” it said. In January 2025, the US Department of Commerce’s Bureau of Industry and Security published an Interim Final Rule, which allows US cloud service providers to deploy only 50% of their total AI computing power outside the US. Bo said AirAsia’s network optimisation is also expected to be completed by the second quarter this year, with frequency increases across high-demand routes beginning in the same period. “In parallel, the group is evaluating new routes to meet growing intra-Asia travel demand driven by easing visa initiatives across key markets including China, India, Thailand and Malaysia, aligned with evolving travel trends,” he added. Bo said AirAsia is responding directly to market demand and Fly-Thru oppor tunities with over seven million Fly-Thru guests targeted this year from 4.3 million in 2024. He said Fly-Thru is likely to be contributing 10% of passengers this year via leveraging Thailand’s Don Mueang International Airport and Kuala Lumpur as key hubs and maximise traffic from North Asia, Australia, Central Asia and Middle East.

Strengthening semiconductor regulations sends positive message to global market: MSIA