Global server shipments, after reaching the peak of 2020 in the second quarter, are estimated to have slipped 6% sequentially in the third quarter as demand began to turn weak and will drop further in the fourth quarter.
Second-quarter 2020 global server shipments enjoyed a strong growth thanks to soaring demand for cloud computing services and from the work-from-home (WFH) segment in addition to shipments deferred from the prior quarter and early inventory preparation to cope with the resurgence of the coronavirus outbreak.
Global server shipments went up 13.4% sequentially in the fourth quarter of 2019 thanks to rising demand from US large datacenter companies and China's server market. However, shipments in the first quarter of 2020 are expected to be affected by China's coronavirus outbreak.
According to Digitimes Research's observation, the server market is experiencing sluggish growth in 2019 with customer inventory level running high. However, as inventory depletion comes to an end, businesses continue to engage in digital transformation, AI applications become more and more popular and cloud service operators aggressively promote hybrid cloud, global server shipments are expected to grow 5% in 2020, and the growth momentum can sustain for the medium to long term.
According to Digitimes Research's statistics and analyses, as previously forecast, weakening demand, delayed transition to new platforms and high levels of first-half 2018 shipments resulted in a decline in global server shipments in fourth-quarter 2018.