Producing individually, serially and with precision – at the German HANNOVER MESSE, it becomes clear not only how far Industry 4.0 has come but also where it meets its limits. If 80% of CIOs in Asia want to leverage artificial intelligence (AI) and automation to realise data-driven business models by 2028, then equally intelligent and automatable IT landscapes are required. The challenges facing intelligent production in Malaysia and how the Internet Exchange operator DE-CIX is contributing to the future of digital infrastructure in Malaysia – a contribution by Ivo Ivanov, CEO of DE-CIX.
In Malaysia, the push towards Industry 4.0 is evident across key sectors, from automotive to precision manufacturing. For instance, PROTON and PERODUA are advancing their production capabilities by integrating smart automation and modular manufacturing, allowing them to customise vehicles—whether combustion, hybrid or electric—based on market demands. Similarly, local industrial players such as Pentamaster and Vitrox are leveraging high-tech automation to produce enclosures and electronic components tailored to client specifications with enhanced efficiency.
Producing individually, serially and with precision – these examples illustrate what Industry 4.0 means today. This transformation was preceded by an unprecedented restructuring of equipment. Modular manufacturing cells replaced rigid, monolithic production lines to reorganise linear process chains into more flexible and automatable systems. The goal: to produce not uniformly but ever more specifically.
80% of CIOs in Asia are prioritising business model transformation through the adoption of AI, automation and data-driven strategies
From March 31 to April 4, the German HANNOVER MESSE will not only showcase how far industry has come on its transformation journey but also where it encounters obstacles. While in the past analog machinery parks were the limiting factor, today, it is digital infrastructures themselves. The reason why is highlighted in an IDC survey: if 80% of CIOs in Asia plan to use AI and automation by 2028 to implement agile and data-driven business models, this can only succeed if IT systems can operate just as intelligently and autonomously – from clouds and software applications to networks.
No different in Southeast Asia, where digital transformation is accelerating, the demand for robust and efficient IT infrastructure is crucial. According to the Malaysian Investment Development Authority (MIDA), the manufacturing sector accounted for RM43 billion in approved investments in 2024, highlighting the growing emphasis on digitalisation and smart manufacturing. As digital economies in Southeast Asia continue to expand, addressing IT infrastructure challenges will be key to unlocking the full potential of automation and AI-driven business strategies.
The need for seamless interconnectivity is becoming increasingly critical in Malaysia’s evolving digital economy, especially as businesses transition to cloud-based solutions. Traditionally, implementing applications in distributed systems required manually combining and managing necessary components from various providers – a time-consuming and costly process. An alternative approach is demonstrated by Tellus: to virtually provision networks for sensitive, real-time-critical applications in distributed cloud environments. The research project led by DE-CIX has developed a prototype interconnection infrastructure. Software-defined, it enables seamless integration of services from different providers and ensures compliance with specific connectivity requirements – fully automated along the entire interconnection supply chain and based on the standards of the European Gaia-X initiative.
Streamlining interconnection service deployment through automation
As Malaysia advances towards digital transformation, greater flexibility in connectivity is crucial to enable seamless, autonomous processes across industries. A key development in this space is the IX-API initiative. In collaboration with global Internet Exchanges like AMS-IX and LINX, DE-CIX is pioneering an API that automates the provisioning of interconnection services, reducing complexity and cost. By aligning their IT infrastructure with this industry-standard interface, Malaysian businesses can seamlessly connect to multiple Internet Exchanges, boosting digital efficiency and resilience. Moreover, this collaborative approach fosters knowledge sharing and expands market access, reinforcing Malaysia’s position as a regional digital hub.
The connectivity challenge: AI algorithms in need of faster networks
In Malaysia’s digital transformation journey, the increasing reliance on AI-driven applications is placing immense pressure on connectivity infrastructure. From software-defined networking to network-as-a-service and infrastructure-as-code – especially as AI becomes embedded in products, processes and business models, interconnection services play a crucial role. The connectivity demands driven by AI highlight why: wherever algorithms form the basis of data-driven processes, the success of smart applications depends primarily on two phases. During training, AI processes vast amounts of data locally to learn how to perform specific tasks. In the inference phase, models apply their acquired knowledge, generate predictions and solve problems – often in real-time across decentralised applications. However, studies by Meta reveal that AI models spend 33% of their time waiting for networks. To ensure the best possible performance of digital applications and services, digital infrastructure operators like DE-CIX are exploring ways to minimise latency while bringing data, applications, algorithms and users physically closer together.
Enhancing Malaysia’s digital infrastructure and manufacturing with AI & automation
As Malaysia pushes forward with its Industry 4.0 agenda, the integration of AI and automation into digital infrastructure and manufacturing is becoming a necessity. High bandwidth and low latency to seamlessly merge AI inference at the edge with cloud computing in real-time or stable, resilient and optimised network connectivity to control sensitive data flows – those who produce intelligently and flexibly require an equally smart and adaptable digital infrastructure.
To support Malaysia’s growing smart manufacturing sector, digital infrastructure must be adaptable, secure and compliant, ensuring data is transported with minimal processing delays. Achieving this requires industrial processes and digital IT supply chains to operate intelligently, autonomously and flexibly in sync. This coordination must extend beyond individual carriers aligning on a single API to encompass the entire last mile across diverse applications, smart factory platforms and manufacturing systems.
More AI and automation for digital infrastructures and the production industry itself: With Malaysia’s vision to become a regional digital economy hub—expected to contribute RM257.2 billion (25.5% of GDP) by 2025 – investing in cutting-edge interconnection services is critical. Under initiatives like MyDIGITAL, concerns over connectivity, real-time data processing and AI-driven automation continue to be top priorities for businesses looking to scale efficiently in a competitive digital economy. As Malaysia advances its Industry 4.0 and smart factory initiatives, prioritising AI-driven automation and high-performance digital connectivity will be crucial in maintaining global competitiveness.
Article by Ivo Ivanov, CEO of DE-CIX
Ivo Ivanov has been Chief Executive Officer at DE-CIX and Chair of the Board of the DE-CIX Group AG since 2022. Prior to this, Ivanov was Chief Operating Officer of DE-CIX and Chief Executive Officer of DE-CIX International, responsible for the global business activities of the leading Internet Exchange operator in the world. He has more than 20 years of experience in the regulatory, legal, and commercial Internet environment.
