[News] Taiwanese Computer Brand Manufacturers Rush into the AI Server Market

2023-08-28 Semiconductors editor

According to a report by Taiwan’s Economic Daily, a trend is taking shape as computer brand manufacturers venture into the AI server market. Notably swift on this path are Taiwan’s ASUS, Gigabyte, MSI, and MITAC. All four companies hold a positive outlook on the potential of AI server-related business, with expectations of reaping benefits starting in the latter half of this year and further enhancing their business contributions next year.

Presently, significant bulk orders for AI servers are stemming from large-scale cloud service providers (CSPs), which has also presented substantial opportunities for major electronic manufacturing services (EMS) players like Wistron and Quanta that have an early foothold in server manufacturing. As the popularity of generative AI surges, other internet-based enterprises, medical institutions, academic bodies, and more are intensifying their procurement of AI servers, opening doors for brand server manufacturers to tap into this burgeoning market.

ASUS asserts that with the sustained growth of data center/CSP server operations in recent years, the company’s internal production capacity is primed for action, with AI server business projected to at least double in growth by next year. Having established a small assembly plant in California, USA, and repurposing their Czech Republic facility from a repair center to a PC manufacturing or server assembly line, ASUS is actively expanding its production capabilities.

In Taiwan, investments are also being made to bolster server manufacturing capabilities. ASUS ‘s Shulin factory has set up a dedicated server assembly line, while the Luzhu plant in Taoyuan is slated for reconstruction to produce low-volume, high-complexity servers and IoT devices, expected to come online in 2024.

Gigabyte covers the spectrum of server products from L6 to L10, with a focus this year on driving growth in HPC and AI servers. Gigabyte previously stated that servers contribute to around 25% of the company’s revenue, with AI servers already in delivery and an estimated penetration rate of approximately 30% for AI servers equipped with GPUs.

MSI’s server revenue stands at around NT$5 billion, constituting roughly 2.7% of the company’s total revenue. While MSI primarily targets small and medium-sized customers with security and networking servers, the company has ventured into the AI server market with servers equipped with GPUs such as the NVIDIA RTX 4080/4090. In response to the surging demand for NVIDIA A100 and H100 AI chips, MSI plans to invest resources, with server revenue expected to grow by 20% to NT$6 billion in 2024, with AI servers contributing 10% to server revenue.

MITAC ‘s server business encompasses both OEM and branding. With MITAC’s takeover of Intel’s Data Center Solutions Group (DSG) business in July, the company inherited numerous small and medium-sized clients that were previously under Intel’s management.

(Photo credit: ASUS)