Taiwanese Data Center Operator Strengthens Market Position Driven by DeepSeek and Domestic Server Manufacturing
Taipei, Taiwan – The Taiwanese company Chief Telecom, specializing in telecommunications, cloud services, and data centers, reported an 11% year-on-year revenue growth in the first quarter of 2025, reaching NT$953 million (approximately US$31.3 million). The net profit also rose by 15%, reaching NT$279 million (US$9.2 million).
Earnings per share (EPS) reflected strong performance, increasing by 14.8% year-on-year to NT$3.57 (US$0.12), although this fell short of the record high of NT$4.08 achieved in the fourth quarter of 2024.
AI Market Boost and Capacity Forecasts
The main driver behind this growth has been the strong domestic demand for artificial intelligence solutions, particularly those related to the DeepSeek model, according to Liu Yaoyuan, Chief Telecom’s CEO. Despite regulatory concerns, including the Taiwanese Digital Ministry banning government entities from using the model due to security and privacy issues, private sector demand continues to rise.
Liu also stated that the new Liyuan 2 (LY2) data center, spanning 4,273 square meters, inaugurated in mid-2024, is projected to reach full capacity by the end of 2025, showcasing the rapid adoption of digital infrastructure in the country.
Competitive Advantages: Local Production and Tariff Exemptions
A key factor bolstering Chief Telecom’s business model is its ability to avoid international tariffs through the domestic production of servers. Liu emphasized the importance of the local supply chain, enabling services to international clients without the extra costs associated with export tariffs.
Taiwan plays a critical role in the global manufacturing of AI servers. According to Nikkei Asia, Taiwanese companies like Foxconn and Quanta Computer controlled up to 90% of the global contract manufacturing market in 2024. However, domestic demand represents only 4% of total sales, according to the Ministry of Economic Affairs, with 96% coming from direct exports.
Chief Telecom: A Key Player in Taiwan’s Digital Ecosystem
Chief Telecom, a subsidiary of the telecom giant Chunghwa Telecom, currently operates four data centers in Taipei and manages the country’s primary internet exchange point, the Taipei Internet eXchange (TPIX). The company also provides network and cloud services for both domestic and international enterprises.
The Taiwanese data center market continues to expand, with local operators such as Taiwan Mobile, Chunghwa Telecom, and Chunghwa International Communication Network competing against international companies like Epoch Digital, Empyrion DC, and Vantage Data Centers. Even Google operates a facility in Changhua, where it signed agreements for wind and geothermal energy purchases in April, aligning with its sustainability goals.
Outlook
With an infrastructure that combines strategic connectivity, local manufacturing, and accelerated AI adoption, Chief Telecom is emerging as an increasingly relevant player in the Asian data center landscape. The rising demand, especially in AI-related sectors, suggests a capacity saturation within 18 months, potentially leading to new phases of expansion or investment.
As Taiwan positions itself as a critical digital hub in the Asia-Pacific, companies like Chief Telecom illustrate how growth in critical infrastructure is becoming increasingly tied to global technological evolution.
Source: DCD