Research insights
Taiwan server-related product revenues to grow 11% in 2020, says Digitimes Research
Frank Kung, DIGITIMES Research, Taipei

Taiwan makers will see revenues from server-related hardware and software including motherboards, full-rack systems, networking equipment and storage equipment, increase by about 11% on year to reach over NT$1.5 trillion (US$52.88 billion) in 2020, higher than the 7% growth in server shipments in the year, according to latest numbers from Digitimes Research's Server Tracker.

Taiwan's strong revenue growth in 2020 is due to the facts that clients' orders have continued to lean toward servers for high performance computing (HPC) applications and high-density rack server systems that feature high profit margins, while increasing demand for cloud datacenter centers has also driven up shipments for storage and networking equipment.

Taiwan's server-related product revenues are expected to grow further by 7.6% on year in 2021 as demand from US- and China-based first-tier datacenter operators will continue to pick up, Digitimes Research estimates.

Foxconn Technology Group (Hon Hai Precision Industry) is the largest supplier in terms of server-related product revenues in 2020 thanks to its global deployment of key component production and strong economies of scale.

The company's robust shipments of cloud computing servers and datacenter network communication devices will also help the EMS provider maintain an over 50% share in Taiwan's server-related product revenues in 2020. Quanta Computer will be the second largest supplier and Wistron (including Wiwynn) the third in the year.

In terms of server shipments based on motherboard counts, Inventec will remain the top supplier in Taiwan in 2020 with an annual growth of 15% and volumes of 3.36 million units. However, if combining Wistron with Wiwynn, the Wistron Group's volumes will be the highest with an on-year increase of 4%.

Inventec's shipments are expected to rise more than 8% on year in 2021 due to keen orders placed by its US- and China-based datacenter clients.

Although Dell and Hewlett-Packard Enterprise (HPE) are expected to cut their server orders for 2021 with their Taiwanese partners due to their enterprise clients reducing procurement in the wake of the coronavirus pandemic, cloud computing services are expected to continue driving up server shipments in the year, especially to the top-4 datacenter operators - Amazon, Microsoft, Google and Face - in North America.

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