By Aileen Anthony, Executive Editor, MALAYSIA SME
The sector’s economics are changing too. Malaysia’s HVAC market was estimated at US$1.17 billion in 2025 and is projected to reach US$1.47 billion by 2030. More significantly, the Energy Commission said electricity demand reached new peaks in 2025, driven partly by data centre expansion, electrification and economic growth.
CHAT MALAYSIA SME spoke with Peter Tan, Immediate Past President of the Malaysian Air-Conditioning & Refrigeration Association (MACRA) at the recent MARVEX, about that transformation, the opportunities emerging for SMEs and his ambition for Malaysia to become an ASEAN HVAC&R knowledge and innovation hub.
The Fifth Element
Peter Tan likes to challenge one of the industry’s most basic assumptions, that air conditioning is simply about making a room cold. “If God has created atmosphere, humans have actually created what I call an indoor curated atmospheric air solution,” he said. His reasoning is straightforward. As people spend more time indoors, HVAC&R has to do considerably more than provide cooling. Temperature, humidity, ventilation, filtration and moisture control increasingly have to work together.
Peter describes air conditioning as contributing a “fifth element” to how people use spaces. We work, live and play indoors. But the additional question, he argued, is how long people are comfortable enough to stay there. “Once this is complete, human probability will go indoor more and more,” he said, while quickly adding that people should still venture outdoors whenever possible. The larger point is that HVAC&R is evolving from a mechanical product into an environmental solution.
When Cooling Becomes Intelligent
Technology is accelerating that evolution. AI-enabled systems can monitor equipment, control settings and identify potential problems before maintenance is required. Even household air-conditioning systems can increasingly be managed through smartphones. Peter does not believe this removes the technician from the equation. Instead, technology gives technicians and users better information.
“My one word: embrace technology,” he said, “because it will help.” He envisages systems eventually becoming intelligent enough to recognise different temperature requirements among occupants, correlate the information and automatically regulate the indoor environment. But smarter cooling also requires smarter behaviour.
Peter is particularly clear that energy efficiency should not simply mean reducing air-conditioning usage. An efficient machine can still waste electricity when it is used irresponsibly. “When you own the aircon, use it wisely,” he said. “Just like use your money wisely, spend it wisely, responsibly.” Efficiency, Peter alluded, is becoming both a behavioural and technological issue.
The Data Centre Equation
Nowhere is that equation more apparent than in data centres. Cooling is mission-critical to data centre operations, and Malaysia’s rapid emergence as a digital infrastructure location is creating an entirely new market for HVAC&R expertise. Peter describes the relationship between cooling and data centres as inseparable, almost like a body and its soul. “In order for data centres to run, they need cooling,” he said. That creates an important downstream opportunity.
Peter shared that Malaysia has the foundations to participate. “Malaysia in ASEAN has a very good, strong engineering faculty strength,” he said, pointing also to the country’s pool of servicing and maintenance talent. From installation and design to engineering, “we have” the capability. The challenge is ensuring local businesses gain access to the opportunities. Large data centre operators often arrive with established supply chains. Peter believes greater participation by Malaysian companies can help translate data centre investment into wider economic value.
The Technician of Tomorrow
That makes skills increasingly important. At MARVEX, visitors can watch students and practitioners install air-conditioning systems live through a skills competition. Peter sees this as a way of making previously invisible expertise visible. Installation requires specialised tools, precision, safety practices and adherence to manufacturers’ specifications. “Your (the technician’s) skill is how we are able to enjoy full comfort,” he said.
Peter also sees another possibility: making technical careers more inclusive. He noted that more women are entering the field and believes female technician teams could become a viable part of the industry. And he emphasised, professionalism matters because installation is ultimately a safety issue. “Make sure it’s done professionally. Make sure you get the right accredited person,” he stressed.
Where SMEs Can Play
For SMEs, the opportunity extends far beyond selling air-conditioning units. The ecosystem includes installers, contractors,engineers, distributors, maintenance specialists and technology providers. But Peter cautions entrepreneurs against entering the sector without understanding its technical foundations.
An SME owner, he said, should know something about air conditioning and surround the business with experienced technical people. Customers will increasingly require more specialised solutions. A luxury home, for example, may require humidity control to protect artwork or leather goods. Families sensitive to allergens may need better filtration and fresh-air solutions. Data centres require precision cooling and increasingly sophisticated technologies such as liquid cooling.
“Air conditioning is no longer just heat and cold,” Peter said. It should be viewed as part of supporting indoor lifestyles and well-being. The SME opportunity, therefore, may lie increasingly in solving specific environmental and performance problems rather than merely installing equipment.
From HVAC Hub to Knowledge Hub
Peter explained that MACRA’s vision goes beyond growing individual businesses. For more than a decade, MACRA has worked to position Malaysia as an ASEAN HVAC hub. His larger aspiration is for Malaysia to become an ASEAN research and development centre. “Why we do that? So that we can actually allow this area to be housed by the best technologies, the latest innovations,” he said.
R&D brings knowledge. Knowledge supports training. And training can turn Malaysia into a destination for regional talent. Instead of talking constantly about losing skilled Malaysians overseas, Peter reframes the possibility: “Malaysia will not be losing talent, but Malaysia will be exporting talent.” Peter explained that this is the push behind the newly introduced MARVEX INTERNATIONAL EXCELLENCE AWARD DINNER (MIEAD 2026), aimed at honouring excellence, leadership, innovation, and contributions across the HVAC&R, engineering, and built-environment sectors.
Regional collaboration is already part of that ambition. Peter said Malaysian and Vietnamese industry counterparts have discussed establishing a federation of HVAC associations, potentially bringing countries including Singapore, Thailand, Indonesia and the Philippines into a broader ASEAN platform.
Prosper Thy Neighbour
Asked about MACRA’s greatest responsibility, Peter’s answer is simple: “Of the industry, by the industry, for the industry.” The same philosophy underpins his advice to SMEs. Too many businesses, he believes, see another company’s success as their loss. He advocates the opposite: mentorship, collaboration and knowledge sharing. “If you’re going to perform 100 per cent, I have to perform 110 per cent,” he said. Better competitors can force everyone to elevate their game. It is a philosophy that could be described simply as prosper thy neighbour.
Because Malaysia’s HVAC&R future will not be shaped by air-conditioning equipment alone. It will be shaped by intelligent buildings, energy efficiency, data centres, skilled technicians, digital technologies and an ecosystem capable of bringing them together. The opportunity is therefore larger than keeping Malaysia cool. It is about building the skills, businesses and knowledge that could help Malaysia determine how the region cools next.
Sources for Opening Statistics
https://www.mordorintelligence.com/industry-reports/malaysia-hvac-market
https://www.st.gov.my/sites/default/files/2026-03/ST_Strategic-Plan_Inlay_v1_Mockup_Digital.pdf
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