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Global server shipments slipped 5.7% sequentially in the second quarter and are likely to see only single-digit on-quarter growth in the third quarter due to brand vendors and CSPs both turning conservative toward the second half of the year, even though the new mainstream server CPU platforms are ready for supply.
Abstract
With traditional cloud spending of enterprises and consumers continuing to be undermined by the hiking interest rate in mature markets and subsiding cloud service demand in the post-pandemic era, datacenter establishment of cloud service providers (CSPs) has also been decelerating, leading to CSPs shifting parts of their general server budget to higher-price AI servers to cater to the growing popularity of generative AIs. As a result, overall server procurement in units was down in the second quarter of 2023.
Leading North American CSPs including Meta and Amazon were pessimistic toward demand for their social media and public cloud services and thus significantly reduced their server purchases, resulting in a more than 10% decline in Taiwanese ODMs' shipments to their US-based datacenter operator clients.
Global server shipments are projected to moderately rebound by 1.5% in the third quarter. As traditional cloud service demand shows no sign of recovery, North American CSPs will step up their spending on high-end AI servers that are dozens of times more expensive than general ones, leading to a small sequential decline in overall server shipments. Server brands' shipments may exhibit a high single-digit sequential growth with the launch of servers featuring new AMD and Intel CPUs.
Table of contents
Table 1: Key factors affecting 3Q23 global server shipments: Supply/demand
Chart 2: Global shipments by top-10 player, 2Q22-4Q23 (k units)
Chart 4: Taiwan server shipments and global share, 2Q22-4Q23 (k units)
Chart 34: Taiwan and global server shipments, 2019-2023 (k units)
Chart 35: Global server shipments by top-10 player, 2022-2023 (k units)
Chart 36: Taiwan server shipments by top maker, 2022-2023 (k units)
Price: NT$27,000 (approx. US$900)
