The Taiwanese data center operator strengthens its market position driven by DeepSeek and domestic server manufacturing
The Taiwanese company Chief Telecom, specialized in telecommunications, cloud, and data center services, reported an 11% year-on-year revenue growth in the first quarter of 2025, reaching NT$953 million (approximately US$31.3 million). Its net profit grew by 15%, amounting to NT$279 million (US$9.2 million).
Earnings per share (EPS) also reflected solid performance, rising by 14.8% year-on-year to NT$3.57 (US$0.12), although below the historic record from the fourth quarter of 2024, which was NT$4.08.
AI Market Boost and Capacity Forecasts
The main driver of this growth has been the strong domestic demand for artificial intelligence solutions, particularly related to the DeepSeek model, according to Liu Yaoyuan, CEO of Chief Telecom. Despite regulatory concerns, including a ban from Taiwan’s Digital Ministry on the model’s use by government entities due to security and privacy issues, demand in the private sector continues to rise.
Liu also stated that its new Liyuan 2 (LY2) data center, with 4,273 square meters of usable space, which opened in mid-2024, will reach its full capacity by the end of 2025, highlighting the rapid adoption of digital infrastructure in the country.
Competitive Advantages: Local Production and Tariff Exemptions
One of the key factors strengthening Chief Telecom’s business model is its ability to avoid international tariffs through domestic server production. Liu emphasized the importance of the local supply chain, which enables the company to offer services to international clients without incurring extra costs related to export fees.
Taiwan is a key player in the global manufacturing of AI servers. According to data from Nikkei Asia, Taiwanese companies like Foxconn and Quanta Computer accounted for up to 90% of the global contract manufacturing market in 2024. However, domestic demand represents only 4% of the total sales value, according to figures from Taiwan’s Ministry of Economic Affairs. The remaining 96% corresponds to direct exports.
Chief Telecom: A Key Player in Taiwan’s Digital Ecosystem
Chief Telecom, a subsidiary of the giant Chunghwa Telecom, currently operates four data centers in Taipei and manages the country’s main Internet exchange point, the Taipei Internet eXchange (TPIX). It also provides network and cloud services for both domestic and international businesses.
The Taiwanese data center market continues to expand. In addition to Chief Telecom, other local operators such as Taiwan Mobile, Chunghwa Telecom, and Chunghwa International Communication Network compete with 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 positioning itself as an increasingly relevant player in the Asian data center landscape. Growing demand, especially in AI-related verticals, indicates a capacity saturation within 18 months, potentially signaling new phases of expansion or investment.
As Taiwan establishes itself as a key digital hub in the Asia-Pacific region, companies like Chief Telecom demonstrate how growth in critical infrastructure is increasingly linked to global technological evolution.
Source: DCD