Inspur, China's biggest server brand, will be among the companies affected negatively by the escalating US-China trade war due to its dependence on US chip vendors including Intel and Nvidia.
Intel suspended its server CPU supply to Inspur on June 30, only to resume them on July 3.
Sources from the upstream supply chain pointed out that Inspur's operation will only see limited impact as the suspension only lasted three days while the company had already placed short lead-time orders two weeks ahead of the suspension in a bid to minimize the impact.
But with China-based IT enterprises all at risk of being sanctioned by the US due to the trade tensions between the two nations, finding new suppliers that are not restrained by US policy changes would be a top priority.
Inspur's 2019 financial results showed that Intel was the largest supplier of the Chinese brand, commanding 37.53% of its spending, while Nvidia was the second largest with a 7.8% share.
Inspur is one of the fastest growing server brands worldwide with revenues from 2012-2018 rising at a CAGR of 66.65%. Inspur was the largest x86 server brand in 2019 in China with a market share of 28.7%, far higher than second-place Huawei at 16.4%. Research firm IDC's figures also show Inspur was the third-largest server brand in terms of shipments in the first quarter of 2020 with a global market share of 8.2%.
Meanwhile, Intel is also seeing a major portion of its revenues coming from China. Intel's datacenter business has already become the second largest contributor in revenues and generated a total of US$7 billion in the first quarter of 2020, growing 43% on year and accounting for 35.4% of Intel's overall amount. Intel's revenues from China totaled US$20 billion in 2019 and accounted for 27.82% of the overall amount.
China-based IT firms are at risk of facing US sanctions
Photo: Digitimes file photo
Article translated by Joseph Tsai
