Cloud-computing surge expected to boost server sector

By Helen Ku  /  Staff reporter

Wed, Mar 05, 2014 - Page 13

Rising demand for cloud-computing applications is expected to boost global server shipments by 22 percent this year to 12.2 million units from last year’s 10 million units, the Industrial Technology Research Institute (ITRI) said yesterday.

Yuanta Securities Co (元大證券) also said it expected the worldwide cloud-based server market to continue posting annual growth this year, citing rising demand for big data analysis.

The comments come as Taiwan is playing an increasingly important role in developing the Facebook Inc-led Open Compute Project (OCP), which aims to produce energy-efficient cloud-based servers.

On Monday, the world’s first certification testing center opened in Taipei. The center was set up by the institute last year to test whether server makers’ new products meet the social networking company’s standards.

Quanta Cloud Technology Inc (雲達) and Wiwynn Corp (緯穎) have received certification from Facebook that their server products can effectively reduce power usage in data centers, ITRI said.

Quanta Cloud Technology general manager Mike Yang (楊晴華) told reporters he expects more local server makers will soon join the project.

However, he added that the firm’s gross margin may be dragged down because of intensifying pricing competition with rivals also seeking certification from the OCP Foundation.

Nevertheless, he said that since the global cloud-based server market is likely to expand further at the same time, companies can still grow their businesses by selling products to buyers other than Facebook.

Yuanta analyst Vincent Chen (陳豊丰) echoed the concern, saying that since Facebook’s orders account for only a single-digit share of the global market, they may only provide a limited boost to local server makers.

“Facebook is the OCP’s biggest beneficiary and local server makers’ profits are unlikely to receive a significant boost because of pricing competition,” he said.

Meanwhile, Wiwynn president Emily Hong (洪麗甯) yesterday told reporters that the company had posted its first profit last year after two years of operation.

The subsidiary of Wistron Corp (緯創), the world’s third-largest contract notebook maker, has been supplying servers to companies including Inc, Microsoft Corp and Facebook since 2012, Hong said.