Companies such as HP and Dell are the world's top sellers of PCs, but most of the actual hardware--about 80 percent of all laptops--is made by Taiwan firms, including Quanta Computer and Compal Electronics.
"Microsoft and HP solution centers will help advance the technology of our Taiwanese business partners and corporate clients," John Knutsen, director of Global Microsoft Technology Center, said at a news conference.
Microsoft said the center would be focused on investing in advanced software, hardware, and improving technical support to its Taiwan partners.
The two companies said they expect the new center to be able to generate a return of $83 million worth of sales in five years.
There are now 16 Microsoft technology centers in the world, including in the United Arab Emirates, France, Germany, Britain, India, and the United States, Knutsen said.
Software giant Microsoft said earlier this month that it had not seen any major impact on its businesses from an economic slowdown, particularly in the United States, and that it has been helped by emerging markets such as China, India, Brazil, and Russia.
Hewlett-Packard posted forecast-beating quarterly earnings last month and has said its strategies in emerging markets will help it weather a tough economic climate this year.