Kuala lumpur: The government has assured that it will only approve data centre projects after ensuring that energy and water supply capacity is sufficient to meet the needs of the people and local industries.

According to BERNAMA News Agency, Deputy Minister of Investment, Trade and Industry Sim Tze Tzin stated that the Data Centre Task Force (DCTF) was established to comprehensively study the entire data centre ecosystem by examining each application based on power and water supply capacity before approval is granted.

He explained that the government will be responsible for ensuring that the energy supply does not burden the people, while the water supply will continue to be prioritised for residents before any approval is given to data centre companies based on the existing surplus capacity. "The water supply must be prioritised for residents and Malaysians. So, only when there is excess capacity will we approve it for the data centre companies," he said.

Sim made these remarks while responding to an additional question from Datuk Wira Dr Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) in the Dewan Rakyat regarding the government's strategies to mitigate energy and water usage by data centres to ensure it does not affect the energy and water needs of industries and residents in Malaysia in the long term.

He noted that Malaysia still has excess capacity to meet the demand from applications handled by the DCTF.

Earlier, Sim mentioned that the implementation of the National Semiconductor Strategy (NSS) has begun to show results, with approved investments in the semiconductor sector reaching RM91.9 billion from January 2024 to March 2026. He highlighted that foreign direct investment contributed RM82.9 billion, while domestic direct investment totalled RM8.9 billion.

Sim also stated that the government is focusing on talent development with a target of training 60,000 workers. By December 2025, 18,062 local talents had been trained, reflecting progress and keeping the initiative on track. He said this in response to a question from Chong Zhemin (PH-Kampar) regarding the government's strategy to attract new investments in the semiconductor and artificial intelligence sectors to ensure Malaysia remains competitive in the region.