Google Reportedly to Boost Cloud Investment in Taiwan

Search engine giant Google Inc. will pay US$300-400 million for five more hectares of land in the Changhua Coastal Industrial Park in central Taiwan as a site for the third-stage expansion of its cloud data center on the island, according to a report published in the Chinese-language Economic Daily News (EDN).

The report says that Google has already acquired 15 hectares of land in the park for the first and second stages of the data center's construction.

The first stage of the construction began in April 2012 and has already been completed, and the second stage is scheduled for completion in the second quarter of this year. Third-stage construction will reportedly get under way in the fourth quarter of 2014.

Once the third stage is completed, Google's Taiwan cloud-data center will reportedly be about five times the size as its data center in Singapore. The company, which has scrapped a plan to build a center in Hong Kong, currently operates seven data centers in the Americas and three in Europe.

Citing unnamed sources, the EDN reports that the first-stage center has been connected to a submarine optical-fiber cable and to satellites, and will begin formal operation once its pilot run is completed.

The center is said to utilize thermal-storage and heat-cooling technologies to save 50% more energy than ordinary cloud-data centers are able to do, making it the most energy-efficient data center in Asia.

Changhua County Magistrate P.Y. Cho says that Google decided to locate its Taiwan data center in the coastal industrial park because the county is sheltered from damage by typhoons and torrential rains by the Central Mountain Range and the Bagua Mountain Range. In addition, the county does not sit on any fault lines and is geographically ideal for connecting to satellites.

Among the Taiwanese ICT companies that are expected to profit from Google's Taiwan project are Quanta Computer, Wistron Corp, and AIC Inc., which are optimistic about the sales of their server computers and data storage systems this year. For example, Quanta's cloud-solution subsidiary, Quanta Cloud Technology Inc., predicts that its revenue will soar 40% this year and that its server computer shipments will increase 20%. Industry observers believe that its revenue will top NT$100 billion (US$3.3 billion at NT$30: US$1) this year for the first time.

Wistron's cloud-service subsidiary, Wiwynn Corp., estimates that its revenues reached NT$10 billion (US$333 million) for the first time in 2013, with 90% coming from sales of Internet data center (IDC) equipment. The company expects its revenue to double this year.

AIC predicts double-digit revenue growth this year, thanks to brisk orders for IDC and Internet security equipment. Based on that prediction, industry observes expect the company's 2014 EPS to roughly equal its capitalization.

Google's choice of the Changhua Coastal Industrial Park as the site of its data center has reportedly drawn the attention of Japan's NTT, which is said to be planning a similar facility of its own there.

The park was recently upgraded to the status of a Free Economic Pilot Zone, exempting exporters operating there from the payment of duties on their imports of components and semi-finished products for further processing and re-export. (KL)