Microsoft to double data centers in Taiwan

MORE DATA CENTERS: Microsoft’s Taiwan-area general manager said the corporation is looking to add two more data centers in northern Taiwan over the next few years

• By Meryl Kao / Staff Reporter

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Microsoft Corp plans to double its data centers in Taiwan from two facilities to four, Microsoft Taiwan general manager Sean Pien (卞志祥) said yesterday.

“Over the past two to three years, we have consistently seen demand outstrip supply, and we expect that situation to continue over the next two to three years,” Pien said on the sidelines of a news conference in Taipei.

The data center sites would mainly be in northern Taiwan to meet customer demand and reduce the risk of operational disruptions caused by a single event, he said, without saying their exact locations.

Microsoft Taiwan general manager Sean Pien, eighth left, Deputy Minister of Digital Affairs Isabel Hou, eighth right, and other guests attend the DevDays Asia event in Taipei yesterday.

Photo courtesy of Microsoft Taiwan

Microsoft enabled the first phase of its Azure data center in Taoyuan in 2024.

The computing capacity shortage extends beyond graphics processing units and central processing units to power supply and space allocation for additional server racks, Pien said.

Addressing the shortage requires building new data centers and reconfiguring facilities to accommodate additional capacity, he said.

Microsoft aims to balance revenue growth, profitability and customer demand going forward, making continued expansion of its global computing capacity a clear priority, he said.

Taiwan’s supply chain would “undoubtedly” remain a key beneficiary and play a critical role in the global race to expand computing capacity, Pien said.

The nation is central to global computing infrastructure across artificial intelligence (AI) servers, computing, storage and networking, and there are no signs in the near term of a major shift in that role, he said.

To ease computing capacity constraints and meet local regulatory requirements, Microsoft has expanded the number of services available through its Taiwan data centers to more than 200 items from more than 70 initially, Pien said.

For corporate customers, connecting to Microsoft’s Taiwan data centers provides immediate access to its global network and customers worldwide, he said.

The company’s data center customers are concentrated in highly regulated industries with data sovereignty requirements, including government agencies, healthcare providers and financial institutions, he said.

Regarding the company’s custom chip development, Pien said Microsoft’s development, production capacity and future deployment of application-specific integrated circuits (ASICs) are all progressing smoothly.

As Microsoft expands AI services such as Copilot and Microsoft 365, it requires massive front-end inference capacity, he said.

Such workloads are highly predictable and controllable, making them well suited to ASICs, which can improve efficiency and lower computing costs, he added.

Microsoft’s own computing demand remains substantial, so its ASIC capacity is expected to be prioritized for internal use in the near term, Pien said.