According to the latest report by DRAMeXchange, a division of TrendForce, the global server market has continued to grow in 2018, with the total shipments estimated to reach 12.42 million units, a YoY growth of around 5%. Dell EMC, HPE (including H3C), and Inspur will be the top three server suppliers with the shipment market shares of 16.7%, 15.1%, and 7.8% respectively.
According to Mark Liu, senior analyst at DRAMeXchange, the growth of global server market is mainly driven by branded server suppliers in North America, who contribute to more than 30% of the global server shipments. As for the percentage breakdown by types of server, enterprise servers account for the majority of the global shipments while the percentage of servers used for Internet data center grows to nearly 35%. The continued growth is because demand from Internet data centers is less seasonal. The YoY growth rate of the ODM direct business in North America reached 17% in 1H18 and is forecasted at 12% in 2H18. The growth is moderated in the second half of the year due to adjustments in stocking and slowdown in CAPEX.
Over the past year, brands experienced a noticeable recovery in 2Q18 with more than 10% QoQ growth in global server shipments, after a slight decline in 1Q18 due to seasonal headwinds. In 3Q18, the shipments peaked at 3.2 million units. Looking ahead to 2019, the shipment growth is expected to slow down to 2% in the first half of the year, as the stock-ups for migration to the latest processor platform began earlier than expected and have approached the end by 2018, so brands tend to be conservative about new market deployment. In the second half, the market may have new demand momentum after new platforms like Gen2 from Intel and Rome from AMD come out.
North American server brands would register strong performances driven by cloud computing and commercial server market
In the ranking of global server shipments, North American companies still occupy the top places with outstanding performances. Dell EMC and HPE, which take the first and second places respectively, still dominate the market of commercial servers. It is worth mentioning that, with the emergence of cloud computing, Dell EMC has taken a place in the global cloud infrastructure market, with a share of 10%. The company will continue to increase the share of storage servers in its product mixes.
However, HPE, which is more profit-oriented, has stopped selling servers for low-gross-profit hyperscale server infrastructure. Instead, it has turned to enterprise integration and hyper-coverage solutions to increase revenue.
Inspur ships nearly one million servers, Huawei increases its server shipments by 20%
Inspur's global shipments have risen significantly to nearly 1 million units, with almost 30% of which shipped to the Chinese market. This is because the government has been encouraging Chinese companies to adopt servers made by domestic brands, together with increasing orders form data centers. A majority of Inspur’s ODM business and server orders comes from internet companies in China, especially tier-1 companies like Baidu, Alibaba and Tencent. Together with orders from tier-2 companies like Toutiao, Meituan, Didi, and JD, Inspur still has orders coming in during the second half of this year. DRAMeXchange expects that Inspur’s strategic plan for the next year will focus on developing new customers, especially those in North America.
Huawei registered a record YoY growth of 20% in shipments due to stable orders from telecom operators. Around 70% of the servers shipped by Huawei are sold to the Chinese market, and the rest are sold to European carmakers and telecom operators’ server (5G and telecom server) and data center construction.