Wed, Feb 12, 2020 - Page 12 News List

Global server shipments likely to fall 10 percent

By Natasha Li  /  Staff reporter

Global server shipments are expected to decline by about 10 percent sequentially this quarter, Taipei-based Digitimes Research said in a report on Monday, citing the effects of the 2019 novel coronavirus outbreak.

The researcher had previously forecast 1.2 percent quarterly growth in server shipments for this quarter following a 13.4 percent increase in the previous quarter, driven by rising demand from US data center operators and China’s growing market appetite.

Shipments this quarter are now expected to decline 9.8 percent sequentially, as the outbreak has disrupted production in the upstream supply chain, the report said.

On an annual basis, shipments would increase by 22.9 percent, which has also been downgraded from a previous estimate of 37.9 percent, thanks to demand from US companies, such as Facebook Inc and Microsoft Corp, it said.

Taiwan-based server makers, including Quanta Computer Inc (廣達電腦) and Wiwynn Corp (緯穎科技), a subsidiary of Wistron Corp (緯創), stand to benefit from US firms’ orders for high-density server models, the report said.

However, the orders have been postponed from their original shipment dates this quarter due to the outbreak, it said.

Quanta, which makes servers at its plant in Shanghai, recovered only half of its production capacity yesterday, the Chinese-language Business Weekly reported.

With most of its server production concentrated at Wistron’s Guangdong plant, Wiwynn has also suffered setbacks amid the local government’s efforts to contain the virus, it reported.

Digitimes said other server players, including China’s Lenovo Group Ltd (聯想) and Inspur Group Ltd (浪潮集團) as well as California-based Super Micro Computer Inc, are planning to raise the proportions of in-house production to mitigate the outbreak’s effects.

The report also cited intensifying competition between chipmakers Advanced Micro Devices Inc (AMD) and Intel Corp as a key factor that would further affect overall server shipments this year.

As AMD’s second-generation EPYC server processors continue to wield pressure on its rival, Intel has scheduled the release of its next-generation Ice Lake platform between the third and fourth quarters of this year, the report said, citing sources from upstream makers in the server supply chain.

Currently being tested by Taiwanese server makers to ensure compatibility, Intel’s new processor would become one of the most important drivers in server shipments later this year, the report said.

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