US data centre supplier, Vertiv, opens first Asian factory outside China, in Malaysia

• Vertiv opened its first Southeast Asian plant, welcomed by the state government as a date centre supplier
• Serve markets in Asia exChina while diversifying supply chain away from China, even as it insists the logic is more about speed

Vertiv is not a household name, but the AI boom runs on the kind of hardware it makes. The US-listed company, headquartered in Ohio with a major manufacturing and R&D base in China, builds the power and cooling systems that keep data centres humming, even working directly with Nvidia to design the power architectures its next-generation AI chips need.

Last week, it opened its first manufacturing plant in Southeast Asia, a 236,000 sq ft facility in Senai, Johor, to build its gear closer to where Asia’s data centres are rising. The plant has been running since the first quarter, in its first phase, with more to come.

Vertiv has arrived as Johor grows warier of the boom it has contributed to. After a period in which it was approving data centres as fast as the applications were coming in, since 2025, it has become choosier about approving data centre investments, concerned over the strain these 24×7 power hungry, thirsty industrial sites place on its strained utilities. Yet, Vertiv walked through without resistance, because it does not run data centres, it only makes what they run on.

That distinction turns Johor’s caution into an advantage. Since 2024, Malaysia has quietly waved through data centres tied to AI while turning away those built mainly to exploit its cheap power and water, a stance Prime Minister Anwar Ibrahim confirmed in Parliament in February 2026. The irony is that the AI facilities it still welcomes are the thirstier of the two, denser to power and harder to cool, the very profile that has turned communities in some countries against new data centres. Malaysia has made the opposite bet, and the heavier those facilities run, the more they need what Vertiv builds. The ones the state is still willing to power are, in other words, Vertiv’s customers.

The pipeline already approved across Johor is not competition for scarce grid capacity. From where Vertiv sits, it is the order book. During the press conference, Mohamad Reduan Zabri, director of MIDA Johor, pointed to the state’s position beside Singapore, its access to three international ports, and the fast-track approvals under the Johor-Singapore Special Economic Zone. “Vertiv could complete their project within 18 months, thanks to Johor Fastlane,” he said.

Construction of the Senai plant began in March 2025, and the first phase delivered its first coolant distribution unit to a customer in May 2026, roughly 14 months later. Vertiv declined to disclose how much it has invested, in the first phase or the budget for the two phases still to come that it expects to complete in 2027.

Paul Churchill, Vertiv’s vice president and general manager for Asia, gave similar reasons for choosing Johor: connectivity close to their intended marketplace, education levels, English-language capability, and a government that helped the company navigate permissioning. “MIDA’s ability to help us navigate the challenges you can get when you’re putting a facility together like this” was, he said, part of what made the difference.

Why Malaysia now?

Before Johor, almost none of Vertiv’s regional product was made in Southeast Asia. “About 70% was out of China, with the rest out of Europe and the US,” said Churchill. “As the AI demand hit, we could see there was a greater demand, there was more requirement here (in Southeast Asia) to have local capacity.”

Asked whether Johor was also a move to de-risk from China, he was clear. “No. It’s more about building up capacity closer to the market, closer to the end users,” he said in a post-launch interview with DNA. The plant, he added, would serve Asian demand only, running through his definition of the region: “Korea, Japan, Vietnam, Southeast Asia, Australia, New Zealand and Pakistan.” Not mainland China.

Still, the Johor move illustrates a familiar move. Under the China-plus-one approach that has reshaped electronics sourcing since the pandemic, companies keep China as their core base with a second one elsewhere to cut their exposure to a single country. Vertiv is not leaving China, where its Shenzhen operation has anchored manufacturing since 2000. 

But its own press release reaches for a word Churchill did not: it describes Johor as strengthening “supply chain resilience.” Pressed on what that resilience guards against, he pointed not to geopolitics but to logistics. “Over the last couple of years in particular, we’ve seen freight delays and freight costs be a risk component,” he explained.

To be fair, the risk Churchill points out is real but for a US-listed company, it is not the only one that needs to be mitigated. The wider backdrop is a supply chain being redrawn around Washington’s trade policy. Industry tariff trackers put US duties on Chinese-made power supplies at around 45% in early 2026, roughly double the rate on Malaysian-made equivalents. 

As sweeping new Section 301 investigations in the US kept the tariff picture unsettled through the year, China’s share of US imports kept falling, with electronics production shifting toward Southeast Asia and India. Malaysia has been one of the destinations that shift favours.

It should be noted that Vertiv has spent the past year adding capacity almost everywhere, from new sites in the Americas to a cooling facility acquisition in Europe. Churchill framed Johor as a matter of scale rather than strategy. “Because of the scale, the right thing for us to do within this region is to manufacture within the region,” he said, adding that customers were glad of it: “They’re very excited about the possibility of having local manufacturing.”

The grid question

Another thing Vertiv counts on, and one further outside its control, is the data centre pipeline in the state given the nation’s AI-favoured approval stance. Asked whether Johor’s stance might limit demand for its equipment, Churchill seemed unbothered. 

“A lot of the existing data centre builds here in Johor have additional phases,” he said. “They just completed phase one or two of what’s going to be five or six phases. So, in actual fact that suits us better than new customers coming in. But there is so much demand within the region, it doesn’t trouble us.”

In short, Vertiv’s confidence rests on those phases arriving. For now, the gap between what Johor has approved and what is running is wide. Of the 52 data centre projects the state has approved, MIDA’s Reduan said only 17 are operational, the rest still in construction or at approval stage. Nationally, more than 7GW of data centre demand had been committed through supply agreements with Tenaga Nasional Bhd (TNB) by Sept 2025, against projections, cited by Kenanga Research, that data centres could draw more than 5GW by 2035, close to a fifth of the country’s generation capacity. 

Vertiv’s own build-out runs on the same logic. Andrew Whall, its vice president of operations and service operations for Asia, said the plant has been operational since the first quarter and is in the first of several phases, with full technical capacity not due until around the second or early third quarter of 2027.

The power those later phases need is also getting dearer: under the tariff period that began in July 2025, round-the-clock users like data centres face higher network and capacity charges they cannot easily design around.

The strain is real enough that the authorities have moved on it. Nationally, Malaysia has frozen new non-AI data centre approvals, and in Johor, State Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor has confirmed the state is imposing tighter power and water requirements on new data centre projects. On the supply side, TNB is rolling out a phased grid build-out, and the federal government has ruled that developers, not households, must carry the cost of the upgrades their projects require.

Vertiv’s more immediate mark on Johor, meanwhile, is in jobs. Churchill told DNA between 100 and 150 workers are on the floor now, with about 98% of them Malaysian. “While our number one criteria (in hiring) is always skill based, our recruitment is always local first.” This extends to the construction phase as well where Vertiv said Malaysian contractors carried out the construction works, though it did not give the contractor numbers. It expects to employ an additional 500 people as the site ramps to full capacity in 2027.