MOUNTAIN VIEW, Calif.--Chinese press is reporting Facebook Inc. may open Asia’s largest cloud data center in Taiwan, though Facebook itself denies the rumors.
According to China Economic News Service (CENS), the world’s largest social network plans to set itself up in The Central Taiwan Science Park in Taichung, Taiwan’s third largest city.
In a statement, however, Facebook said it had "no plans to build a data center in Taiwan." The Central Taiwan Science Park also said it had no knowledge of such plans.
CENS reported the center would likely reach some 720,000 square feet in size and bring in several billion New Taiwanese Dollars’ worth of business to Taiwan’s server procurement business, as well as local component makers. If the rumors turn out to be true, the move would be a huge boon to Taiwan’s Ministry of Economic Affairs, which has long been working to portray Taiwan as an Asian Information Logistics Center.
The sheer size of the center would also make Taiwan the cloud-computing capital of the world, bolstering Asia’s Internet backbone. Back in June, Google Inc. also announced plans to establish a cloud-computing center in Taiwan.
“We have already hired many engineers and look forward to hiring more,” Google’s Sundar Pichai told press at Computex Taiwan earlier this year, adding that Taiwan had the “depth of work” Google needed when it came to tapping the various OEMs and ODMs the country has in such abundance.
Facebook, too, seems to be looking to local Taiwanese players to help it give its cloud center a lift. Wistron Corp., Quanta Computer Inc. and Gigabyte Technology are all purportedly vying for the firm’s business when it comes to furnishing its cloud center with the latest and greatest in server technology.
By running its own data center and buying equipment directly from local Taiwanese manufacturers, Facebook could save itself money, as gross margins for cloud-computing servers are typically above 20 percent for brand suppliers, while contract manufacturers have margins of just 3-4 percent .
While firms like Winstron have already done business with Facebook in the past, having supplied servers to the social giant’s North Carolina data center, the procurement path would be a new one for the likes of motherboard maker Gigabyte, which is trying to break into the lucrative cloud market.
“It would be the very first time that Gigabyte would provide the hardware for a first tier company,” technology expert and Taiwan resident Sascha Pallenberg said. “It’s exciting, because it shows that Gigabyte understands where its business needs to be headed in the future,” he added.
Geographically, Taiwan is well placed to house Facebook’s business. The centralized regime in mainland China would likely not allow Facebook to set up such a center on its soil, and Japan would be a far more expensive choice.
“Taiwan has all the infrastructure,and the manufacturers are here, which keeps the costs down,” Pallenberg said, adding that the move would be good for the local economy as well as providing Facebook with a back-up for its south-east Asia operations.
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