The United States has elevated its efforts to curtail the advancement of high-end chips in China. As reported by the CLS News, various companies within China have indicated they received advance notifications and have already amassed chip stockpiles. Analysts suggest that this new wave of bans implies a further restriction by the U.S. on China’s computational capabilities, making the development of domestically-manufactured GPUs in China a matter of utmost importance.

According to the latest regulations, chips, including Nvidia’s A800 and H800, will be impacted by the export ban to China. An insider from a Chinese server company revealed they received the ban notice at the beginning of October and have already stockpiled a sufficient quantity. Nevertheless, they anticipate substantial pressure in the near future. The procurement manager for a downstream customer of Inspur noted that they had proactively shared this information and urged potential buyers to act promptly if they require related products.

Larger companies like Tencent and Baidu are less affected by the ban due to their ample stockpiles. On October 17th, HiRain Technologies announced that its subsidiary had purchased 75 units of H800 and 22 units of A800 from supplier A and had resolved this issue two weeks ago.

(Image: NVIDIA)

Source to China Times, in response to increased visibility in AI server orders and optimistic future demand, two ODM-Direct based in Taiwan, Wiwynn, and Quanta, are accelerating the expansion of their server production lines in non-Chinese regions. Recently, there have been updates on their progress. Wiwynn has completed the first phase of its self-owned new factory in Malaysia, specifically for L10. As for Quanta, has further expanded its L10 production line in California, both gearing up for future AI server orders.

Wiwynn’s new server assembly factory, located in the Senai Airport City in Johor, Malaysia, was officially inaugurated on the 12th, and it will provide full cabinet assembly services for large-scale data centers. Additionally, the second phase of the front-end server motherboard production line is expected to be completed and operational next year, allowing Wiwynn to offer high-end AI servers and advanced cooling technology to cloud service providers and customers in the SEA region

While Wiwynn has experienced some slowdown in shipments and revenue due to its customers adjusting to inventory and CAPEX impacts in recent quarters, Wiwynn still chooses to continue its overseas factory expansion efforts. Notably, with the addition of the new factory in Malaysia, Wiwynn’s vision of establishing a one-stop manufacturing, service, and engineering center in the APAC region is becoming a reality.

Especially as we enter Q4, the shipment of AI servers based on NVIDIA’s AI-GPU architecture is expected to boost Wiwynn’s revenue. The market predicts that after a strong fourth quarter, this momentum will carry forward into the next year.

How significant is the demand for AI servers?

According to TrendForce projection, a dramatic surge in AI server shipments for 2023, with an estimated 1.2 million units—outfitted with GPUs, FPGAs, and ASICs—destined for markets around the world, marking a robust YoY growth of 38.4%. This increase resonates with the mounting demand for AI servers and chips, resulting in AI servers poised to constitute nearly 9% of the total server shipments, a figure projected to increase to 15% by 2026. TrendForce has revised its CAGR forecast for AI server shipments between 2022 and 2026 upwards to an ambitious 29%.

Quanta has also been rapidly expanding its production capacity in North America and Southeast Asia in recent years. This year, in addition to establishing new facilities in Vietnam, they have recently expanded their production capacity at their California-based Fremont plant.

The Fremont plant in California has been Quanta’s primary location for the L10 production line in the United States. In recent years, it has expanded several times. With the increasing demand for data center construction by Tier 1 CSP, Quanta’s Tennessee plant has also received multiple investments to prepare for operational needs and capacity expansion.

In August of this year, Quanta initially injected $135 million USD into its California subsidiary, which then leased a nearly 4,500 square-meter site in the Bay Area. Recently, Quanta announced a $79.6 million USD contract awarded to McLarney Construction, Inc. for three construction projects within their new factory locations.

It is expected that Quanta’s new production capacity will gradually come online, with the earliest capacity expected in 2H24, and full-scale production scheduled for 1H25. With the release of new high-end AI servers featuring the H100 architecture, Quanta has been shipping these products since August and September, contributing to its revenue growth. They aim to achieve a 20% YoY increase in server sales for 2023, with the potential for further significant growth in 2024.

According to a report by Taiwanese media Money DJ, after establishing a stable position as a major supplier for NVIDIA GPU baseboard, Wistron has secured orders for AMD MI300 baseboards. Reliable sources indicate that Wistron has expanded its involvement beyond AMD baseboards and entered the module assembling segment.

In addition to NVIDIA and AMD, Wistron has also entered the Intel AI chip module and baseboard supply chain, encompassing orders from the three major AI chip manufacturers.

The NVIDIA AI server supply chain includes GPU modules, GPU baseboards, motherboards, server systems, complete server cabinets, and more. Wistron holds a significant share in GPU baseboard supply and is also involved in server system assembly.

Currently, NVIDIA commands a 70% market share in AI chips, but various chip manufacturers are eager to compete. Both AMD and Intel have introduced corresponding solutions. While Wistron was previously rumored to have entered AMD baseboard supply, it has also ventured into AMD GPU module assembling, serving as the sole source, according to reliable sources.

Regarding the news of Wistron’s involvement in AMD and Intel chip manufacturing, the company has chosen not to respond to market rumors.

(Photo credit: Google)

According to Taiwan’s Liberty Times, in response to the global supply chain restructuring, electronic manufacturing plants have been implementing a “China+ N” strategy in recent years, catering shipments to customers in different regions. Among them, Inventec continues to strengthen its server production line in Thailand and plans to enter the NVIDIA B200 AI server sector in the second half of next year.

Currently, Inventec’s overall server production capacity is distributed as follows: Taiwan 25%, China 25%, Czech Republic 15%, and Mexico, after opening new capacity this quarter, is expected to reach 35%. It is anticipated that next year’s capital expenditure will increase by 25%, reaching 10 billion NTD, primarily allocated for expanding the server production line in Thailand. The company has already started receiving orders for the B100 AI server water-cooling project from NVIDIA and plans to enter the B200 product segment in the second half of next year.

Inventec’s statistics show that its server motherboard shipments account for 20% of the global total. This year, the focus has been on shipping H100 and A100 training-type AI servers, while next year, the emphasis will shift to the L40S inference-type AI servers. The overall project quantity for next year is expected to surpass this year’s.

(Photo credit: Google)

According to a report by Taiwan’s Commercial Times, Wistron AI server orders are surging. Following their successful acquisition of orders for NVIDIA’s next-generation DGX/HGX H100 series AI server GPU baseboards, there are industry sources suggesting that Wistron has secured orders for AMD’s next-generation MI300 series AI server baseboards. The earliest shipments are expected before the end of the year, making Wistron the first company to win orders from both major AI server providers. Wistron has refrained from commenting on specific products and individual customers.

The global AI server market is experiencing rapid growth. Industry estimates global production capacity to reach 500,000 units next year, with a market value exceeding a trillion NT dollars. NVIDIA still holds the dominant position in the AI chip market with a market share of over 90%. However, with the launch of AMD’s new products, they are poised to capture nearly 10% of the market share.

There have been recent reports of production yield issues with AMD’s MI300 series, potentially delaying the originally planned fourth-quarter shipments. Nevertheless, supply chain sources reveal that Wistron has secured exclusive large orders for MI300 series GPU baseboards and will begin supplying AMD in the fourth quarter. Meanwhile, in NVIDIA’s L10, Wistron has recently received an urgent order from a non-U.S. CSP (Cloud Service Provider) for at least 3,000 AI servers, expected to be delivered in February of next year.

Supply chain analysts note that while time is tight, Wistron is not billing its customers using the NRE (Non-Recurring Engineering), indicating their confidence in order visibility and customer demand growth. They aim to boost revenue and profit contributions through a “quantity-based” approach.

On another front, Wistron is currently accelerating shipments for not only NVIDIA DGX/HGX architecture’s H100-GPU baseboards but also exclusive supply orders for NVIDIA DGX architecture and AI server front-end L6 mainboard (SMT PCBA) orders for both NVIDIA and AMD architectures under the Dell brand. These orders have been steadily increasing Wistron’s shipment momentum since the third quarter.

(Photo credit: NVIDIA)