Apple to build massive data centre at China’s new hi-tech hub in Guizhou province

The facility, estimated to house more than 30,000 server cabinets, is part of Apple’s US$1bn investment programme in one of the country’s poorest areas

PUBLISHED : Wednesday, 12 July, 2017, 5:53pm
UPDATED : Wednesday, 12 July, 2017, 11:00pm

Apple is looking to double down on its business in mainland China by establishing a data centre in Guizhou province to comply with rigid cybersecurity laws, while supporting Beijing’s efforts to develop one of the country’s poorest areas into a world-class hi-tech hub.

The 41-year-old technology giant, which counts the mainland as its second-biggest market after the United States, said it has partnered with Guizhou-Cloud Big Data Industry Co (GCBD), a government-backed data centre developer and operator, to build the facility in that southwestern province.

The data centre project forms part of a US$1-billion investment programme that Apple has drawn up for the province, according to a Reuters report on Wednesday that cited an Apple spokesman.

“Apple’s new data centre in Guizhou could potentially cover an area of up to 1 million square feet (92,903 square metres), or a total capacity of more than 30,000 server cabinets, supported by 150 megawatts of critical load capacity,” Jabez Tan, the research director at Toronto-based Structure Research, told the South China Morning Post.

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Tan said the estimates for Guizhou’s most high-profile international investor were based on recent data centre developments in the province by e-commerce powerhouse Alibaba Group Holding, as well as telecommunications network operators China Mobile, China Unicom and China Telecom.

“The Guizhou provincial government has been offering a set of incentives, including discounts on electricity from the area’s plentiful supply of hydropower, which has resulted in cloud computing and data centre firms establishing test sites and pilot programmes there,” he said.

New York-listed Alibaba, which owns the Post, signed a framework agreement with the Guizhou provincial government in 2014 to set up an industrial base for its cloud computing business and so-called big data operations.

Hon Hai Precision Industry, the world’s largest contract electronics manufacturer known by its Foxconn trade name, had set up a factory and 46,451 sq m data centre in an industrial zone just outside the provincial capital of Guiyang. The Taiwanese company is the main supplier for Apple’s iPhone.

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Data centres are secure, temperature-controlled facilities used to house large-capacity servers and data storage systems, and equipped with multiple power sources and high-bandwidth internet connections.

These facilities are used by enterprises to remotely store large amounts of data, manage their business applications and host cloud computing operations. Cloud services enable companies to buy, lease or sell software and other digital resources online on demand, just like electricity from a power grid.

“The addition of this data centre [in Guizhou] will allow us to improve the speed and reliability of our products and services, while also complying with newly passed regulations,” Apple said in a statement. “These regulations require cloud services be operated by Chinese companies, so we’re partnering with GCBD to offer iCloud.”

Launched in 2011, iCloud is Apple’s own online storage and cloud computing service for users of its Mac line of personal computers, iPads, iPhones and iPods.

The mainland’s Cybersecurity Law came into force on June 1, introducing data localisation measures and invasive forms of technology regulation, according to law firm Hogan Lovells.

Paul Haswell, a partner at international law firm Pinsent Masons, said “many overseas businesses will have to follow Apple’s lead [in setting up new data centre arrangements] in the coming months, as they wrestle with the ambiguities contained in the new cybersecurity law”.

Prior to its Guizhou project, Apple has been a so-called co-location tenant in a mainland data centre provider.

Apple reported in May its fifth consecutive quarter of revenue decline for its greater China business. It posted a 14 per cent decrease in combined first-quarter revenue from mainland China, Hong Kong and Taiwan to US$10.7 billion, compared with US$12.5 billion a year ago.