What is driving growth in the Taiwan data center market?

Taiwan is recognized as an innovation hub and a leading force in semiconductor production, marking it as one of Asia’s largest modern economies, and Taipei on the rise as a prime data center market in the region.

The country has a well-established data center sector set for significant growth. Analyst reports predict that data center investment in Taiwan will increase from $1.42 billion in 2022 to $3.21 billion by 2028, reflecting a compound annual growth rate of 14.57%. A large portion of this growth is expected in Taipei, the economic and cultural capital, which houses half of the region’s data centers.

The investment surge in data centers within Taipei can be attributed to several factors that are plentiful in Taiwan’s capital.

Taiwan’s booming, high-tech economy

Taiwan produces more than 60% of the world’s semiconductors and more than 90% of the most advanced ones. Beyond the chip industry, Taiwan is at the forefront of digitalization and smart city development. Digital technologies like IoT, big data and AI are implemented across almost all industry verticals. Data is being generated at unprecedented speed, which drives increasing demand for Taiwan data centers.

Taiwan is fostering development and innovation in AI. For example, in March 2023, the government initiated the Taiwan AI Center of Excellence (Taiwan AICoE) with the goal of positioning Taiwan as the epicenter of AI innovation and governance in Asia. The center is committed to training around 10,000 people annually in AI technology to meet the industry’s growing needs.

Given the significant initiatives to promote AI innovation and position Taiwan as the AI hub of Asia, the data center industry must expand substantially. The anticipated needs of these AI initiatives, coupled with Taiwan’s advanced manufacturing and digital economy, signal a strong demand for more digital infrastructure in the region. However, the dynamic high-tech economy is just one of several reasons the data center industry is focusing on Taipei.

Connectivity and clean energy

Taiwan stands as a major hub of technological innovation, boasting an expanding network of submarine cables that enhance its connectivity to the global digital landscape. A key passage for these undersea cables is the Taiwan Strait.

Ranking as the world’s second-largest in terms of population and economy, the region adjacent to Taiwan has a burgeoning digital economy and a growing demand for digital and cloud services. This makes Taiwan’s strategic location beneficial for major data service providers catering to both markets.

In the realm of contemporary data centers, connectivity remains a vital aspect. However, the emphasis on sustainability is increasingly paramount. As these buildings convert electricity into computing power, they also account for substantial energy consumption. Data center operators striving to reduce their carbon footprint are turning to markets that offer renewable energy sources to meet their needs.

Taiwan is actively pursuing sustainable energy to address its emissions and power needs. Officials aim to boost renewable energy to 45 gigawatts by 2030 through wind and solar investments. The International Trade Administration reports:

“Taiwan will integrate 5.7 gigawatts of offshore wind power into the grid by 2025, already earmarked. Another 10 gigawatts of offshore wind is scheduled from 2026 to 2035. For solar power, the target is 14.2 gigawatts by 2025. Ongoing wind and solar projects are valued at about $82.9 billion, ranking among the highest in Asia.”

Taiwan’s digital economy, well-established connectivity and dedication to clean energy are attracting significant data center investments, including from Vantage Data Centers.

Upcoming TPE1 Taipei data center

Vantage Data Centers has announced the construction of a five-story 16MW data center (TPE1) in Taipei. “Taipei is a key location for serving customers throughout Asia as demand continues to surge, particularly with the rise of technologies like AI,” said Raymond Tong, president of Vantage Data Centers, APAC.

The facility, occupying two acres, will be situated in Taiwan’s capital, about 35 minutes from Taiwan Taoyuan International Airport. The completion is targeted for mid-2024.

In line with the local government’s emphasis on renewable energy, the TPE1 data center will be built following Vantage’s “sustainable by design” approach to ensure energy-efficient operations and achieve industry-leading power usage effectiveness and water usage effectiveness.

To learn more about Vantage’s TPE1 Taiwan data center development, click HERE.