Supply chain
Global server shipments slip 6% on quarter in 3Q20, says Digitimes Research
Frank Kung, DIGITIMES Research, Taipei

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 weaken, and will drop further in the fourth quarter, according to the latest figures from Digitimes Research's Server Tracker.

The shipment declines were a result of several factors including: the high comparison base formed in the second quarter amid clients' earlier-than-scheduled inventory buid-up; the lingering coronavirus pandemic; and delayed releases of Intel's next-generation server CPUs, which caused cloud datacenter operators and server brand vendors to slow down their order pull-ins in the second half of 2020.

Global server shipments saw a nearly 20% on-year growth in the first half of 2020. Although the on-year shipment growth in the second half will not be as strong as that in the first, full-year 2020 shipments will still grow annually.

US-based cloud datacenter operators and global first-tier server brands, including Microsoft, Google, Facebook, Dell, HPE, Lenovo and Supermicro, will still focus on digesting inventory in the fourth quarter, Digitimes Research believes. Server brands are also facing enterprise clients cutting their server procurement due to the pandemic's impact.

Amazon will be the only first-tier cloud datacenter operator to see server shipment growth in the fourth quarter as the company has expanded hardware infrastructure for its e-commerce platform to cater to year-end shopping demand in addition to cloud computing services.

In 2021, as the pandemic will continue to undermine the global economy, enterprises are likely to further reduce their capex. The US-China trade tensions may also decelerate Chinese server brands' shipment momentum in 2021.

However, as Intel's and AMD's new-generation server CPUs will become widely available in the first half of 2021, a wave of server replacement trend in the enterprise market is to be expected. In addition to rising demand for cloud services from US and Chinese providers, global server shipments are expected to continue growing in 2021.

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