TECO Group's TECOBAR Sets Up Plant in Penang, Enters AI Supply Chain with Armored Busway

As Malaysia pushes for national digital transformation, demand for AI data centers and high-performance computing (HPC) is growing rapidly, driving the need for high-capacity power distribution. Armored busways, a crucial equipment for power transmission, have become a technological advantage for Taiwanese companies setting up operations in Penang, highlighting their key infrastructure role in the AI supply chain.

According to the Malaysia Digital Economy Corporation (MDEC), the digital economy's share of GDP is projected to rise from 25.5% in 2025 to 30% by 2030, focusing on four main areas: talent development, infrastructure, industrial capability, and governance framework.

Driven by the National Artificial Intelligence Strategy, Malaysia aims to build a complete AI ecosystem by 2030. Penang, with its long-established electronics and semiconductor industry, has become a key industrial hub in this digital transformation wave.

Penang now hosts several industrial clusters, including the Bayan Lepas Industrial Park, Seberang Jaya Industrial Park, Perai Industrial Park, Bukit Minyak Industrial Park, and Batu Kawan Industrial Park, attracting numerous multinational tech companies.

A CNA reporter visited the newly inaugurated plant of TECOBAR, a subsidiary of the TECO Group, located in the Perai Industrial Park, which opened at the end of April. Long armored busways were neatly arranged beside the production line, automated equipment was running, and engineers were checking product specifications and quality through a monitoring system.

● Rising AI Data Center Demand Makes Armored Busways Key

In an exclusive interview with CNA, TECOBAR Chairman Lin Da-Wen said the new Penang plant was completed in April this year. The total investment is approximately NT$370 million, covering an area of about 3.5 hectares. The plant primarily produces armored busways to meet the construction needs of US-based cloud service providers (CSPs) and AI data centers.

He pointed out that the current annual production capacity for armored busways at the Penang plant is 160,000 meters, sufficient for 20 data centers, with the potential to increase to a maximum of 400,000 meters. With the increasing demand for AI data centers and HPC, armored busways have become one of the core products for AI data centers.

Lin believes the Penang plant is not only a crucial base for expanding into the ASEAN market but is also expected to drive the integration of related supply chains, connecting upstream and downstream resources to provide more comprehensive power transmission solutions.

● Benefiting from Singapore's Spillover, Penang Attracts Data Center Investment

Explaining the choice of Penang, Lin analyzed that Malaysia is centrally located in ASEAN and is currently a key market for US-based CSPs deploying data centers. Besides Malaysia, Singapore, Thailand, and Indonesia are also major investment destinations.

He noted that due to resource constraints like land, water, and electricity in Singapore in recent years, some demand has gradually spilled over to Malaysia. From Johor in the south to Penang in the north, the region is benefiting from this wave of data center investment.

Lin stated that compared to Singapore, land acquisition costs in Malaysia are lower, and water and electricity resources are relatively abundant, making it an attractive factor for data center operators. Although some areas in southern Johor face water shortage challenges, Penang's overall water and power supply conditions remain relatively stable, attracting many Taiwanese companies to continue investing in semiconductors, packaging, and testing.

● 'China+1' Strategy Makes Malaysia a Supply Chain Restructuring Hotspot

Beyond the investment demand driven by data center development, Lin believes Malaysia's importance in the global supply chain restructuring trend has been continuously increasing in recent years.

He said the Malaysian government actively provides 'one-stop' investment services and offers tax incentives, which are important conditions for attracting foreign capital. For US-based CSPs and multinational tech companies, Malaysia not only offers geographical advantages but is also beneficial for regional operational布局.

Lin pointed out that amid ongoing US-China competition, Malaysia is benefiting from the 'China+1' (seeking alternative production bases besides China) and 'Middle East+1' trends, becoming a key hub for multinational corporations.

● Data Center Effect Ripples Out, Boosting Talent and Industry Chains

Lin stated that with the entry of US-based CSP data centers and the AI industry into Malaysia, the quality of local engineering technology has significantly improved, positively impacting the government, industry, and society.

He analyzed that the data center and AI industries have a huge demand for talent, driving up the quality of Malaysia's workforce and gradually improving the overall talent pool.

Lin believes that corporate investment considers not only local production but also local service capabilities. Without support from related industry supply chains, companies could face challenges in terms of cost and delivery in the future.

He emphasized that when companies set up operations, suppliers follow, driving the development of the entire upstream and downstream industry chain. Data centers bring not just a single investment benefit but create a compound growth effect, which will significantly boost Malaysia's economic development over the next 3 to 5 years.

As Malaysia actively promotes AI and digital economy development, from armored busways to AI data center construction, Taiwanese companies are participating in Southeast Asia's digital transformation wave through industrial clusters like Penang.