Supply chain
Global server shipments to continue growth in 4Q19, says Digitimes Research
Betty Shyu, DIGITIMES Research, Taipei

Global server shipments picked up 11.2% sequentially in the third quarter of 2019, a growth similar to Digitimes Research's forecast made in the previous quarter, and are expected to see a mild on-quarter increase in the fourth quarter, better than Digitimes Research's original anticipation of a slight drop. The server industry will also see its first quarterly on-year growth in 2019 in the fourth quarter.

With downstream clients having finished digesting their excess inventory, the worldwide server shipments have resumed growth since the third quarter, but volumes for the entire year of 2019 are still expected to decline, Digitimes Research estimates.

Facebook was the largest client of Taiwan makers in terms of shipments in the third quarter of 2019, surpassing the original top-2 Hewlett-Packard Enterprise (HPE) and Dell. Since Facebook's cloud computing platform is mainly composed of multi-node lightweight motherboards, the company's demand for the boards (each counts as one server) has been enormous and is growing rapidly, and should further boost Facebook's shipment share in the fourth quarter.

Facebook's increasing orders are primarily benefiting its two major suppliers Quanta Computer and Wiwynn. With a rising share in Facebook's orders plus a dramatic increase in orders from Google, Quanta's server shipments leapfrogged Wistron and Foxconn Technology Group (Hon Hai Precision Industry) to become the second largest server maker worldwide in the third quarter, behind only Inventec.

Major server makers are mostly expected to witness sequential shipment growths in the fourth quarter with Quanta to continue obtaining more market share.

China-based server brand Inspur activated its in-house production lines to manufacture server motherboards in Suzhou, China in June 2019. So far, the volumes produced at the site per month are still limited, but may challenge Taiwan's dominance in the worldwide server industry in the long run.

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