TAIPEI -- The Taiwanese government is keen to persuade Facebook to build its second Asian mega data center on the island, as a strategy to fend off any Chinese aggression and as part of efforts to lure more U.S. investment amid the escalating trade war between Beijing and Washington, an economic official told the Nikkei Asian Review.
Taiwan was disappointed when Facebook earlier this month chose Singapore over Taiwan to build its first data center in Asia at an investment of more than $1 billion. Facebook had studied the feasibility of setting its first Asian data center in Taiwan in 2015.
"The government has not given up yet. We are still trying to talk Facebook into building its second Asian data center here in Taiwan," the high-ranking official who is familiar with the government's plan told Nikkei.
Facebook Vice President for Asia Pacific Dan Neary is in Taiwan to expand the company's "Made By Taiwan" initiative on Thursday -- a collaboration with local small- to medium-sized enterprises to optimize the company's advertising tools. No specific commitments about data centers have been made yet.
Ahead of the event, Minister of Economic Affairs Shen Jong-chin met with Neary for an hour on Wednesday and President Tsai Ing-wen was also scheduled to meet Neary on Thursday after Facebook's press event, according to another official who knows of the plan.
The official said the Taiwan government wants to convince Facebook to commit to a data center locally also on national security concerns. "As all the crucial data is stored in the facilities, data centers of large tech companies are like ammunition depots. You wouldn't let anyone fire at ammunition depots," the person said.
The official added if Taiwan could tempt more than one big U.S. company to set up their data centers here, the island would have an edge in securing American protection against Beijing's threats.
Relations between Taiwan and China have soured significantly since Tsai and her pro-independence Democratic Progressive Party took office in May 2016. China views the self-governed island as part of its territory and has not ruled out seizing Taiwan by force if necessary.
Shen confirmed the government's plans. "Whether Facebook will build its second Asian data center is the company's own decision to make. What Taiwan can do now is to ready our environment [for building data centers] and respect the client's decision," Shen told reporters after Facebook's press conference on Thursday.
"The location of Facebook's data center is a very complicated decision to make," Head of Facebook Hong Kong and Taiwan Fei Yu said. "Asia Pacific is the company's largest market and we are communicating with various countries to explore the best environment for it [data center]," she said, in response to Nikkei's query about building a second Asian data center in Taiwan.
Facebook is just one of the government's target companies. Officials from Taiwan's Ministry of Science and Technology and directors of the island's three major science parks have just finished a tour in the U.S. for the first time. The group was hoping to draw more business and investment in areas ranging from semiconductors, biotechnology, medical engineering, smart manufacturing, to artificial intelligence. They are also planning a similar visit to Japan in January.
Google's first Asian data center at Changhua County in central Taiwan began operation in 2013. It is still expanding the site, which was initially 15 hectares, with a multi-year $600 million investment commitment.
As a relatively small island that faces water and electricity shortages in the long term, Taiwan is not an ideal pick for many data centers.
Yet, Taiwan could be attractive to American internet companies due to its strategic position, reasonable business regulations and friendly ties with the U.S. Geographically, Taiwan is close to China, where Google and Facebook are banned. Setting data centers and other research and development facilities in Taiwan could therefore help American enterprises to avoid scrutiny from Beijing.