Apple Building Hong Kong Data Center: Rumor

Apple’s data centers provide the backbone for its cloud services and other operations.

Will Apple build its next major data center in Hong Kong?

That’s the rumor that emerged on Tuesday, after 9to5Mac claimed that it had spoken to a “bidding contractor employee” who said Apple plans to build the site in the New Territories section of Hong Kong, near the Shenzhen border. Construction will begin in Q1 2013, the Website reported, and the data center will come online in 2015.

Supposedly, the scale of the data center will be enormous: “There is simply nothing to compare it to and therefore it is hard to make estimates on size based on the materials required,” the employee told 9to5Mac.

As with most Apple rumors, this one cannot be readily dismissed. To date, Apple hasn’t revealed any plans to place a data center in Asia, even as its customer base continues to grow. In July, Apple chief executive Tim Cook reported that the company’s second-quarter Greater China revenue was $7.9 billion, with $5.7 billion in the third quarter. (Cook attributed the majority of the revenue decline to changes in channel inventory, not as a decrease for iPhone or Mac demand or Apple’s services.)

Apple reportedly is seeking out a Hong Kong location in order to place its data center close to, but not inside China, where the government has been accused of censorship. The financial impact of that decision remains unclear; while Baidu has had the luxury of stretching out and building perhaps the world’s largest data center inside China, the Hong Kong property market continues to be one of the world’s most expensive. And while the Hong Kong government is now selling land again, developers are unloading commercial properties in a bid to raise cash to snap it up.

The implication is that, unless Apple builds out an existing property, it may be in a bidding war unless it can secure land far removed from high-demand locations.

To date, Apple has housed most of its public data centers and “operations centers” in the United States. In addition to its Maiden facility in North Carolina, Apple’s data centers include the Prineville, Ore. facility and a second data center in Newark, Calif., with reported plans to open one east of Reno, Nev. as well. The operations centers include sites in Sacramento, Calif.; Austin, Tex.; Cork, Ireland; and Munich, Germany.

The 9to5Mac report doesn’t indicate whether Apple is planning a “green” data center, although the company has consistently sought out sources of renewable energy (including powering all of Apple’s operations centers with 100 percent renewable power).

For example, Apple’s Maiden facility generates 60 percent of its power needs on site, while the remainder is purchased from local, renewable sources. At Prineville, the company has access to enough local renewable energy sources to completely meet the needs of the facility, working with two local utilities as well as a number of renewable energy providers.

The Newark facility is farther behind, but Apple has said that it is locating and buying enough direct-access clean energy to meet the needs of the facility by February 2013. Apple’s headquarters in Cupertino only uses 50 percent renewable energy, some of which is supplied by onsite fuel cells, the company said.


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