Supply chain
Global server shipments to contract 5.6% sequentially in 3Q20, says Digitimes Research
Frank Kung, DIGITIMES Research, Taipei

Global shipments of servers are estimated to contract 5.6% sequentially in the third quarter of 2020 due to a deceleration in demand for cloud servers from datacenter operators and for enterprise servers, according to Digitimes Research.

In second-quarter 2020, worldwide server shipments spiked 27% on quarter to 4.55 million units, driven by fulfillment of orders deferred from the first quarter and strong demand for cloud service and remote work applications amid the coronavirus pandemic.

But server shipments to Microsoft, Facebook, Google and Amazon are expected to trend downward in the third quarter as their inventories still stay at high levels following strong pull-ins of shipments in the second quarter. In addition, enterprise server vendors Dell, Lenovo, Inspur and Supermicro will also see their clients in the US and China cut expenses in second-half 2020.

Digitimes Research estimates global server shipments for the first three quarters of the year to grow 17% on year due to a low comparison base for the same period in 2019, though first-quarter 2020 shipments were disrupted by the outbreak in China and third-quarter demand is slowing down.

As datatcenter operators and enterprise users are expected to further cut their server shipment pull-ins in the fourth quarter, overall global server shipments for 2020 are expected to grow at only 6.8% to over 16 million units.

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