Global server shipments could register a smaller-than-expected increase in the second half of the year as the COVID-19 pandemic hits supply chains in Southeast Asia, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday.
Pointing to the spread of the coronavirus in nations such as Malaysia and the Philippines, which are home to major manufacturing sites of server components, TrendForce senior analyst Mark Liu (劉家豪) said that the industry is facing a potential problem in its supply chain as early as the third quarter.
“Given that several of Intel [Corp]’s assembly facilities are located in Malaysia, should the country extend its national lockdown, the production schedule of servers will be impacted in the mid to long-term as a result,” Liu wrote.
Upcoming disruptions in the production of server components in the Philippines could also affect the overall supply chain, Liu said, citing Samsung Electronics Co’s server DRAM packaging operations, which are based in Luzon, after Philippine President Rodrigo Duterte yesterday extended the lockdown in Luzon to April 30.
“Despite normal levels of production at the moment, Samsung will have to re-evaluate its capacity assignment in the future,” Liu wrote, adding that he expects more uncertainties for already tight DRAM supply.
Global shipments of servers are expected to continue on an upward trend this year on the back of strong demand from the top US providers of cloud services — Amazon Web Services, Microsoft Corp, Facebook Inc and Google.
However, that growth could be capped if the pandemic continues to accelerate in the second half of the year, TrendForce said.
The report forecast a 3 percent year-on-year increase in server shipments this year, down from TrendForce’s previous estimate of a 5 percent increase.
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