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Taiwan’s Data Industry Landscape

Network servers in a data center. Swallow depth of Field

Given Taiwan’s strong data protection laws and data storage infrastructure, the nation is poised to become Asia’s data centre hub. U.S. tech giants already have substantial operations in Taiwan and continue to make large new investments. However, domestic demand is the main driver of growth in Taiwan’s data centre industry.

A research firm said that enterprise infrastructure spending by firms in Taiwan in 2020 rose by 19.7% to NT$23 billion (US$822 million), fueled by a busy manufacturing sector that supplies a world hungry for chipsets and servers.

Cloud giants have plans to expand in Taiwan. Taiwan is embracing a cloud-first mentality as firms move data to the cloud to find efficiencies while modernising their own infrastructure as part of their digital transformation journey.

A U.S. tech giant has announced it would build a third Taiwan data centre for NT$ 20 billion in Yunlin County. The company mentioned geographic advantages as a reason they chose to build the data centre in Taiwan. Another big tech company said that it would build a cloud region in Taiwan. The data centre is expected to launch in late 2021 or early 2022.

The tech company said that its new investment in Taiwan reflects its faith in its strong heritage of hardware and software integration. With Taiwan’s expertise in hardware manufacturing and the new datacentre region, they look forward to greater transformation, advancing what is possible with 5G, Artificial Intelligence (AI) and Internet of Things (IoT) capabilities spanning the intelligent cloud and intelligent edge.

According to an article, Innovation has been a source of comparative advantage for Taiwan historically. It has also been an important basis for U.S. firms, investors and the government to support Taiwan’s development while expanding mutually beneficial linkages. Yet, both Taiwan’s innovation advantage and the prospect of jointly developed, technologically disruptive collaborations face challenges.

Taiwan’s innovation ecosystem has struggled to foster subsequent generations of startups to replace these losses in electronics manufacturing. Despite a freewheeling startup culture, internationalisation has been a persistent challenge for Taiwan-based firms. Technological change and political challenges from Beijing present additional risks to Taiwan’s innovation future.

The national innovation ecosystem has struggled to foster subsequent generations of startups to replace these losses in electronics manufacturing. Despite a freewheeling startup culture, internationalisation has been a persistent challenge for Taiwan-based firms. Technological change and political challenges from Beijing present additional risks to Taiwan’s innovation future.

Taiwan’s government can also do more through public-private partnerships to encourage commercialisation. Many university professors, especially in technical subjects, owe their research sponsorship to the government—for example, through subsidy programs of the Ministry of Science and Technology (MOST). But few have been able to respond to government entreaties to commercialise the fruits of this research. Fostering links between basic research funding and commercial accelerators and incubators will be essential.

As an example of Taiwan’s government support, The Export Processing Zone Administration (EPZA) of MOEA cooperates with the Institute for Information Industry (III) to build Taiwan’s first “Digital Transformation Innovation Hub (DTIH)”, which was officially completed in Kaohsiung Software Park (KSP), as reported by OpenGov Asia.

To meet the increasing demands for digital technology year by year, the EPZA actively expands KSP second phase to attract more enterprises to invest and station in the park to expand the scale of the southern digital technology industries settlement. In response to the trend of digital technology, the most critical fields for digital transformation in the future are Internet of Things (IoT), Artificial Intelligence (AI), Blockchain, Cloud, Data Analytics, Edge Computing and 5G, by using emerging technologies to drive the transformation of the manufacturing industry to increase the added-value of the industries.

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