Global server shipments are expected to surge to 15 million units next year, from 4 million units this year, with artificial intelligence (AI) servers accounting for about 30 percent, driven by massive capital spending by major cloud service providers, the Market Intelligence and Consulting Institute (MIC) said on Thursday last week.
Major cloud service providers — including Google’s parent company Alphabet Inc, Microsoft Corp, Amazon.com Inc and Meta Platforms Inc — are projected to budget US$450 million for capital expenditure next year, up from US$400 million this year, MIC ICT [information and communications technology] Industry Research Center director Edward Lin (林柏齊) told a news conference in Taipei.
Cloud operators Oracle Corp and CoreWeave Inc are also expected to ramp up purchases of AI and general-purpose servers for their data centers, Lin said.
Photo: Annabelle Chih, Bloomberg
The institute projected servers powered by Nvidia Corp’s graphics processing units to account for about 80 percent of total AI servers next year, with application-specific integrated circuit-based servers making up the remaining 20 percent.
Nvidia is expected to launch its next-generation AI platform, Vera Rubin, in the fourth quarter of next year, and the company would also begin standardizing its heat-dissipation specifications, and the move could weigh on the profit margins of Taiwanese cooling solution providers, MIC ICT Industry Research Center deputy director Chris Wei (魏傳虔) said.
Market trends also indicate that Nvidia plans to require suppliers to provide higher-level system products, including complete compute trays, while continuing to verify server racks, cooling distribution units and cold plates based on its recommended vendor list, Wei said.
Based on this trend, leading cooling solution providers that boast of production capacity and cost efficiency, such as Delta Electronics Inc (台達電) and Lite-On Technology Corp (光寶), would likely to have a better chance of participating in the supply chain of Nvidia’s Vera Rubin platform, he said.
As Nvidia is also pushing the adoption of liquid cooling over air cooling, Taiwanese makers capable of offering both air and liquid-cooling solutions are expected to benefit from the transition, he added.
Meanwhile, for server and related component makers, “those who can integrate power, cooling, server racks and infrastructure are expected to secure more critical positions in the next wave of data center expansion, while those only sell components risk being commoditized,” Wei said.
Whether Nvidia’s new platform could boost sales for Taiwanese manufacturers would depend on whether they are included in the US company’s ecosystem and can provide higher levels of system integration, he added.
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