Investment in Taiwan data centre market expected to reach $4.47 billion

Investments in the Taiwanese data centre market are expected to grow at a very high CAGR of 23.6% over the next five years, reaching $4.47 billion USD. 

This growth in investment is due to a number of different factors. First, Taiwan is a connectivity hub for secondary markets in the APAC region. As primary markets like Hong Kong and Singapore reach capacity, investors are becoming more interested in secondary markets, like Jakarta and Mumbai. As secondary markets are built out, it places increased focus on secondary market connectivity hubs like Taiwan – spurring investment there as well.

Investments in Taiwan data centre infrastructure are attractive for other reasons. These include the availability of resources, resulting in lower-cost construction and operation of data centre sites. Investment by technology giants such as Google and Microsoft has helped to boost investor confidence across the board. The cities themselves have been working to make themselves more attractive to data centre investments, bolstering infrastructure and investing in their own smart city technology.

Additionally, recent changes to the political environment have led data centre investors to shift their strategies. New, stringent national security laws in Hong Kong, for example, may be having an adverse effect on investments in data centre and communications infrastructure.

However, according to some analysts, it’s domestic demand that is the primary driver of growth in data centre investment. Research from IDC noted that in 2020, infrastructure spending increased by 19.7%, “fueled by a manufacturing sector that supplies to a world hungry for chipsets and servers.”

“Cloud giants do have plans to expand in Taiwan, mainly triggered by usage growth rather than the National Security Law in Hong Kong,” Wendy Mok, an analyst for IDC, noted in an interview with Taiwan News. She went on to explain that Taiwan is embracing a cloud-first mentality, as firms execute their own digital transformation strategies.

Expanding the data centre industry in Taiwan isn’t just a matter of infrastructure investment, however, it also requires an accessible pool of skilled labor. To that end, Microsoft is working on a number of initiatives to upskill Taiwanese citizens to become effective contributors to the digital economy. The primary initiative will help upskill over 200,000 people in Taiwan over the next four years, partnering with non-profits, startups and enterprises.