Market Trends of Taiwan Data Center Construction Industry
Taipei is Expected to Remain Major Data Center Hotspot in Taiwan
- The data center market in Taipei reached an IT load capacity of 171.3 MW in 2022. It is expected to witness a CAGR of 7.03% to reach a capacity of 304.2 MW by 2029.
- Since more than half of the city's facilities are large, Taipei is the preferred location in the nation for the construction of gigantic data centers. Up to 2029, the city's significant facilities are also anticipated to increase gradually. Up until 2029, Taiwan's medium and small facilities will remain unchanged at 5.18 MW and 1.79 MW, respectively. One of Taiwan's largest economic contributors is Taipei. When compared to other cities, the city has a significant presence of major data centers. The market has seen more changes as a result of increased energy efficiency concerns and the growing acceptance of digitization, both of which go hand in hand.
- The city's main development areas right now are in the areas of information and communication technology (ICT), biotechnology, general merchandise (wholesale/retail), financial services, meetings, incentives, conferences, and exhibits (MICE) industries. 3,700 registered foreign firms, or more than half of all foreign investment in Taiwan, are based in Taipei. Taipei City, which also receives 50% of all foreign investment, is home to over 70% of foreign businesses. These developments will make it simpler for data centers to grow, and more racks will need to be added to keep up with demand.
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IT and Telecom Market to Hold Significant Market Share
- With an increase in smartphone users in Taiwan, the demand for telecom services is expected to grow. The use of digital consumer products such as smartphones and the data generated via them may allow telecom companies to securely manage and store large volumes of data and scale up the storage capacity as per their requirements.
- Furthermore, the 5G mobile data speed in the country was 289.25 Mbps in 2022, which is expected to witness a CAGR of 14.80% during the forecast period to reach 662.0 Mbps by 2029.
- The adoption of these 5G services is projected to be accelerated by the rising need for high-speed data access for cloud and IoT applications, such as smart home energy management. However, as 5G networks offer faster speeds, higher capacity, and lower latency than 4G LTE networks, the number of 5G subscribers is growing at a quicker rate. In Taiwan, the total number of 5G customers has surpassed 1 million in the five months after the introduction of the technology. By the end of 2021, 5G penetration increased to over 30%.
- Furthermore, In 2022, a survey by Taiwan Network Information Center revealed that 19 percent of respondents (n=2650) in Taiwan had used 5G. Another 20 percent of respondents expressed willingness to adopt 5G. A majority of survey participants were satisfied with the current 3G/4G Wi-Fi services on the Democratic island.
- To support telecommunications operators, the Taiwanese government allocated USD 650 million, which was distributed between 2019 and 2022, to subsidize the installation of 5G in the country. Such initiatives are expected to increase demand for data centers in the country.
