Most server ODMs are projecting substantial growth in AI server shipments by early 2025, driven by optimism around AI-related demand and bolstered by Nvidia's upcoming Blackwell GPU production.
While ODMs have traditionally relied on seasonal consumer electronics like notebooks and smartphones, AI servers are reshaping this business model. Nvidia's upcoming GPU, Blackwell, is expected to see production ramp up in early 2025, indicating strong growth for ODMs involved in AI servers, while those without these capabilities might see a comparative decline.
During a recent earnings call, Quanta, the first manufacturer of Nvidia's GB200, noted that server shipments would remain flat compared to the previous quarter in the fourth quarter of 2024 due to the transition between generations of AI servers. However, the company expects momentum to improve in the first quarter of 2025, driven by AI server shipments, potentially leading to quarter-over-quarter growth.
Quanta estimates that AI servers will be a key driver in 2025, with revenue from the business expected to grow at triple-digit rates. The share of AI server revenue within overall server revenue is forecasted to increase from 50% in 2024 to 70%. Additionally, both notebook and automotive segments are expected to see growth compared to 2024, although their expansion will pale compared to the remarkable growth of AI servers.
Addressing industry rumors that the shipment of Nvidia's GB200 might be delayed by a quarter due to critical component issues, Quanta stated that shipments are proceeding as planned. They acknowledged that upstream supply is beyond their control but confirmed they are fully prepared. Market analysts predict that even amid supply challenges, Quanta's revenue in the first quarter could still show single-digit growth quarter-over-quarter.
Wistron, another beneficiary of AI servers, has already seen triple-digit growth in related revenues in 2024. The company anticipates continued triple-digit increases in 2025. In addition to Nvidia's GPU substrates and computing boards, Wistron began shipping AI server racks starting in the fourth quarter of 2024, with further growth expected in 2025.
Wistron projects its revenue from AI servers to see quarter-over-quarter growth in the first quarter, with significant growth coming from substrate, computing board, and racks. Notably, unlike other ODMs experiencing gross margin declines due to AI server shipments, Wistron emphasizes that there remains room for improvement in its gross margins in 2025.
Inventec had an impressive performance in the server segment in 2024, driven by shipments to US clients and increased orders from Chinese clients despite the US-China trade war. However, due to double-digit order momentum from both Chinese and US server clients in the fourth quarter, Inventec estimates a double-digit quarter-over-quarter decline in server shipments for the first quarter of 2025.
PC market outlook
In the first quarter of 2025, the PC businesses of all ODMs are anticipated to reflect the typical slow seasons observed in previous years. However, the extent of this decline differs among them. While specific forecasts for first-quarter PC shipments were not provided, the general indication is a decrease compared to the fourth quarter. However, when considering the entire year of 2025, most ODMs maintain a neutral or positive outlook on the performance of PC shipments.
Industry sources indicate several potential catalysts for PC market growth in 2025. Microsoft's decision to end support for Windows 10 is expected to boost corporate procurement. Additionally, the gradually decreasing prices of AI PCs are anticipated to further stimulate growth. By the latter half of 2025, these products might hit a sweet spot in sales, driven by replacement demands from consumers who delayed purchases before the pandemic. Together, these factors are likely to lead to improved PC shipments in 2025 compared to the previous year.
Article translated by Jingyue Hsiao
