DIGITIMES Research estimates that Taiwanese server-related business revenues declined by 7% in 2023, reaching above NT$2 trillion.
It was a much smaller decline than the 17.5% decrease in shipments, mainly because high-end products which accounted for a low proportion of the shipments commanded extremely high unit prices, according to DIGITIMES Research's latest report covering Taiwan's server industry.
Major cloud service providers' campaigns to promote applications of large language models such as ChatGPT sent demand for high-end AI servers skyrocketing. Looking forward to 2024, the generative AI boom and the demand for general-purpose server replacements will drive up Taiwanese makers' server-related revenues by 15%, the report's figures show.
In terms of Taiwanese manufacturers' ranking by server-related revenues in 2023, Foxconn (Hon Hai) remained in first place, despite a decline from a year ago, as a result of North American cloud services provider (CSP) customers cutting orders for general-purpose servers, as well as related network and storage equipment.
However, in 2024, it is estimated that the Foxconn Group will benefit from strong orders for Amazon's next-generation Graviton CPU models. In addition, Nvidia's next-generation GPU modules, motherboards, and graphics cards will fuel sales momentum in the second half of 2024. Foxconn's server-related revenues are expected to improve by nearly 15%.
The second-placed Wistron Group (including Wiwynn) had the most stable revenue performance among Taiwanese companies in 2023, with an estimated decline of only 5.2%, mainly supported by Wistron's performance.
Wistron is the main supplier of Nvidia's high-end A100 and H100 HGX server modules, and GPU baseboards carrying high unit prices contributed substantial revenues.
In 2024, the Wistron Group's revenues will also grow significantly due to favorable factors such as CSP customers increasing shipments for their own AI servers and brand vendors expanding their AI server shipments.
Quanta, in third place, saw its server-related revenues decline by 9.2% in 2023, as North American CSP customers shifted part of their spending to purchasing high-priced AI servers and significantly reduced their purchases of Quanta's general-purpose servers. In 2024, due to Quanta's significant shift to AI servers with higher unit prices, its revenue is expected to grow by 14.5%.
Inventec's server shipments, in terms of motherboards, ranked first in 2023, and its revenues came in fourth. In 2023, as post-pandemic demand for general-purpose servers from brand vendors and CSP customers dropped, Inventec's server-related revenues fell by 9.5%, the largest decline among the top four Taiwanese manufacturers. For 2024, orders from major customers are expected to rebound, and sales will grow by 9%.
