Spending in the global cloud infrastructure services market last quarter hit a record US$30.2 billion and is expected to grow 32 percent annually this year, market advisory firm Canalys Co said in a report yesterday.
US technology giants continued to dominate the market, with Amazon.com Inc taking the lead through its cloud-computing arm, Amazon Web Services (AWS), which claimed a 32.4 percent market share, the report said.
Microsoft Corp followed with its Azure cloud computing unit for a 17.6 percent market share, while Alphabet Inc’s Google cloud services came in third at 6 percent.
Alibaba Group Holding Ltd (阿里巴巴) ranked fourth as its cloud services branch Alibaba Cloud, also known as Aliyun (阿里雲), clinched a 5.4 percent market share.
Total expenditure exceeded US$107 billion last year, jumping from US$78 billion in 2018, the report said, highlighting an unrelenting expansion in the IT industry as companies continued to seek digital transformation.
The growing demand for cloud services is also driving up spending on data center infrastructure, Canalys principal analyst Matthew Ball said in the report as he pointed to an 8 percent annual increase in spending last year by cloud services providers including Alibaba, Amazon, Baidu Inc (百度), Facebook Inc, Google, Microsoft and Tencent Holdings Ltd (騰訊).
This might come as good news for Taiwan-based server manufacturers, as cloud service providers are the largest buyers of servers worldwide, accounting for more than 35 percent of the overall server market, Canalys said.
Digitimes Research last month forecast a 6 to 7 percent annual increase in sales this year for local server makers, while predicting another 6 to 8 percent growth in server shipments based on market demand driven by companies such as Facebook and Amazon.
Inventec Corp (英業達) and Hon Hai Precision Industry Co (鴻海精密) were the top two server makers last year in terms of shipments, ahead of Quanta Computer Inc (廣達電腦) and Wistron Corp (緯創), Digitimes data showed.
Meanwhile, a coronavirus outbreak is sparking fears over production delays as the Chinese government extended a holiday until Monday next week.
However, the server industry is not expected to be strongly affected by the outbreak, Ball said in an e-mail.
“The impact of the US tariffs over the last 12 months has meant vendors and cloud service providers have shifted supply chains to mitigate the additional levies,” Ball said.
RELOCATIONS
Inventec last quarter announced plans to move part of its server production from Shanghai to a plant in Taoyuan’s Gueishan District (龜山). The firm also has server plants in Mexico and the Czech Republic.
Hon Hai last year decided to build a server plant in Kaohsiung’s Hofa Industrial Park (和發產業園區), while its subsidiary Ingrasys Technology Inc (鴻佰科技) is expanding its server plant in Taoyuan, Chinese-language media outlet TechNews reported.
Quanta last year shifted part of its server production back to its plants in New Taipei City’s Linkou District (林口) amid trade tensions between the US and China.
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