Facebook Plans to Establish a Cloud Data Center in Taiwan

Nov 08, 2011 Ι Industry In-Focus Ι Electronics and Computers Ι By Philip Liu, CENS
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Taipei, Nov. 8, 2011 (CENS)--Facebook, the world's largest community website, will establish Asia's largest cloud data center in Central Taiwan Science Park, bringing procurement business for servers worth several billions of NT dollar and making Taiwan a cloud-computing bastion in the world.

Facebook's cloud data center will occupy over 20,000 pings (one ping equals 36 square feet) in space, equivalent to 180 basketball courts. Facebook will handle the software of the data center itself and will purchase servers from Taiwanese contract manufacturers directly, bypassing brand suppliers, so as to save cost. Wistron is most likely to win the procurement business, while Gigabyte and Quanta are also scrambling to garner the business.

The Central Taiwan Science Park Administration expressed yesterday (Nov. 7) that it has no knowledge of Facebook's plan. Previously, Google also decided to establish cloud-computing center in Taiwan.

Institutional investors pointed out that gross margin for cloud-computing servers tops 20% and can be even higher for direct shipment to end clients, compared with average margin of 3-4% for most contract manufacturing business.

Winstron already has cooperative link with Facebook, since it has won the business of supplying servers to Facebook's cloud data center in North Carolina. Shipment for the order will be made in December. Therefore, it has great chance to secure the business of supplying servers to Facebook's projected data center in Taiwan. Gigabyte is also gearing up to strive for the business opportunity, in order to tap the market of cloud-end business for first-tier firms.

The investments of Google and Facebook in Taiwan are a major encouragement for the Ministry of Economic Affairs in its plan to develop Taiwan into a “Asia-Pacific Information Logistics Center,” which may generate over NT$100 billion of production value.
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