Microsoft plans to build its first cloud data centre in Taiwan as part of a wider investment predicted to generate USD 10 billion by 2024, the firm announced on Monday.

• Microsoft hopes to establish the new data centre as one of its key operating hubs in Asia. 

Why it matters: Microsoft’s continued investment in Tawain suggests a growing desire to decouple its operations from Chinese supply chains, amidst growing US-China tensions.

• Taiwan could increasingly become a preferred APAC base for global technology firms, further cementing its long-standing status as a leader in advanced tech manufacturing. 

The big picture: Microsoft’s decision to select Taiwan as its next key Asian operating hub comes less than four months after Hong Kong’s reputation as a safe haven for data technology was undermined by the passing of the National Security law.

• The new bill allows Chinese law enforcement to demand private customer data from technology firms in Hong Kong. Several technology firms have pulled out of Hong Kong in response to the new law, including Naver (the parent company behind LINE) and TikTok.

China-Taiwan tensions are also growing. On Monday, Beijing announced that it would impose sanctions on American companies Lockheed Martin, Boeing, and Raytheon for selling weapons to Taiwan, reported CNN.

Taiwan has long been embroiled in political conflict with China, as Taiwan has consistently rejected China’s claim of sovereignty over it, while China has always refused to recognise Taiwan as a legitimate, independent country.

By the numbers: Microsoft estimated that the new data centre would help create 30,000 direct and indirect jobs in Taiwan. 

The technology giant predicts that the centre will generate around USD 10 billion of economic value by 2024.

Microsoft also pledged to help Taiwan train more than 200,000 professionals in artificial intelligence and big data analysis segments

More details: Taiwanese President Tsai Ing-wen reiterated Taiwan’s strong potential as a burgeoning data hub: “Taiwan has an irreplaceable edge in terms of high-end hardware manufacturing, and we are a reliable, safe partner for the US and other advanced countries,” reported Nikkei

Microsoft confirmed the move was merely an expansion and it did not plan to relocate its Hong Kong data centre to Taiwan.

Microsoft already operates multiple Azure cloud data centres across several Asian countries, including Hong Kong, Singapore, Australia, China, India, Japan, and South Korea. The new Taiwan data centre will supplement Azure’s ability to serve the growing cloud service markets across Asia.

Looking ahead: In September, Google announced plans to build its third data centre in Taiwan. Google identified Taiwan as being ideally located for an Asian data transfer hub.

The Taiwanese government is seeking to establish the territory as a reliable partner for global technology firms and has also lobbied Facebook to build a new data centre on the island.


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