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keyword:Mark Liu29 result(s)

Press Releases
Sluggish Server Production in 4Q20 to Be Accompanied by Expanded QoQ Decline of 13-18% in Server DRAM Prices, Says TrendForce

2020/09/16

Semiconductors

Due to server ODMs’ higher-than-expected inventory of server barebones in 3Q20, additional server orders from the ODMs’ clients came to a screeching halt, therefore resulting in a QoQ decrease in overall server orders for the quarter, according to TrendForce’s latest investigations As ODMs gradually destock their inventories of server barebones in 4Q20, data center operators are expected to step up their server procurement activities as well, albeit to a far lesser extent than 2Q20 However, given the excess inventory of server barebones, one to two quarters are needed to correct this situation, meaning ODMs will be unlikely to restart their procurement of server DRAM and server components until late 2020 or early 2021 In light of the fact that server manufacturers still hold a relatively high inventory of server DRAM, TrendForce is now forecasting a 13-18% QoQ decline in server DRAM prices for 4Q20 Momentum of ODM server shipment is expected to slightly improve in 4Q20, though shipment still falls short of 2Q20 figures TrendForce’s demand analysis indicates that enterprises have massively cut down on their server procurement in light of market uncertainties brought about by the COVID-19 pandemic Most of these enterprises have also transitioned their infrastructure spending from CAPEX to OPEX, in turn suspending some of their existing server orders Despite the recovery of labor back to normal levels at overseas ODM assembly sites at the end of June, server barebones production and server set (whole server) shipments for 3Q20 are expected to decline by 10% QoQ and 49% QoQ, respectively, thus falling short of previous forecasts Looking ahead to the fourth quarter, the shipment performance of server barebones is expected to benefit somewhat from data centers’ procurement efforts, while ODMs gradually destock their inventory of server barebones, but the resultant QoQ growth of server shipment in 4Q20 is projected to be lower than 2Q20 figures Huawei’s server DRAM procurement ahead of time is unable to reverse the downswing of server DRAM prices, which is expected to further decline in 4Q20 DRAM suppliers have been entering the server DRAM market in droves owing to the fact that server DRAM is the most profitable product category out of all DRAM offerings As a result, the supply of server DRAM has been on a steady upswing However, server manufacturers have been slowing down their server production since 3Q20, leading to an excess inventory of server DRAM This, combined with their reluctance to source more server DRAM from suppliers due to an anticipated price drop, has led to an oversupply situation in the server DRAM market On the other hand, Huawei has been very aggressive in procuring memory products during the recent two weeks as it wants to extend its component inventories as far as it can before the latest export control rules imposed by the US government come into effect after mid-September Server DRAM modules are among the items that the Chinese technology conglomerate are stocking up on, and most of these upside orders have been directed to the major DRAM suppliers based in South Korea Even so, the server DRAM segment is still experiencing significant oversupply, while the demand side is also affected by the fact that buyers including data centers are dealing with high inventory Therefore, contract prices of server DRAM products continue to descent to new lows Even though prices for 4Q20 contracts have yet to be finalized, the overall trend suggests that the decline in contract prices of 32GB server DRAM modules may likely widen to a QoQ drop of about 15% or more In view of the market situation, TrendForce has formally widened the forecast of QoQ decline in server DRAM prices to 13-18% compared with the earlier projection of 10-15%

Press Releases
Decline in Quarterly Server Shipment Projected to Widen to 4.9% QoQ in 3Q20 as Enterprises Defer Server Procurement Plans, Says TrendForce

2020/08/18

Semiconductors

Many enterprises transitioned their CAPEX in server procurement to OPEX in managed cloud services in 1H20 in the face of economic and other uncertainties from the COVID-19 pandemic, according to TrendForce’s latest investigations These enterprises have subsequently slowed down their server procurement orders, in turn resulting in enterprise server suppliers, led by Dell and HPE, to revise down their yearly shipment targets starting in 3Q20 TrendForce has thereby also revised the forecasted 08% QoQ decline in 3Q20 server shipment down to 49% Server OEMs are actively adjusting their operating strategies in response to looming trend of enterprise cloud adoption TrendForce indicates that the shipment performances of the enterprise server OEMs made an expected rebound in 2Q20 after the cyclical downturn of 1Q20 Although third quarters are traditionally peak seasons, the pandemic has induced enterprises to lower their CAPEX this year, with a noticeable lack of growth momentum in the server market, thus resulting in QoQ declines in server shipments across the board in 3Q20 Major server OEMs, including Dell, HPE, Huawei, and Inspur, are expected to each show a near-double digit QoQ decrease in server shipment In terms of the individual server OEMs’ strategies this year, Dell’s transfer of high-grossing production lines to Taiwan and aggressive expansion of cloud service clientele (such as financial institutions and small-scale CSPs) are projected to maintain Dell’s competitive advantage as enterprises transition into cloud solutions Its subsidiary EMC meanwhile remains the best-of-breed solutions provider in the enterprise cloud storage market But the general trend for enterprises worldwide to lower their CAPEX in response to the pandemic is projected to impact Dell’s shipment performance in 2H20 HPE shifted nearly 10% of its server offerings to AMD’s Rome platform in 1H20, but it encountered certain challenges during the early stages of this transition because most of its clients were still on Intel’s platform HPE therefore performed below expectations in the first two quarters of the year Furthermore, as the company’s production lines were affected by the pandemic in 1H20, the ensuing labor shortage at assembly plants meant many server barebones could not be assembled into full systems HPE is therefore likely to register a QoQ decline in server shipment in 3Q20 due to excess inventory of server barebones and lowered volume of orders from existing enterprise clients Thanks to increasing orders for data center assembly from North American clients, Lenovo’s performance in 3Q20 appears remarkable, as the company’s production lines were immediately taken up by server assembly orders from Microsoft Lenovo is the only manufacturer among the top five server OEMs to record a growth in server shipment in 3Q20 against the overall downtrend Stagnant penetration rate of Chinese-made servers is linked with the status of new infrastructure development in China With regards to the Chinese market, the fact that most hyperscale data centers and CSPs based in China opt for servers made by Chinese manufacturers drove up server shipments from Inspur and Huawei However, under the influence of the economic downturn in 3Q20, infrastructure build-out in China has not taken place on schedule, leading to lower than expected levels of server procurement by enterprise clients compared to forecasts made in early 2020 As such, Inspur and Huawei are likely to face imminent declines in server shipment as well

Press Releases
3Q20 Server Orders to Face Adjustments in Light of Relatively High Server Barebones Inventory, Says TrendForce

2020/06/22

Semiconductors

According to the latest investigations by the DRAMeXchange research division of TrendForce, the increase in server orders in 2Q20 took place due to the gradual easing of supply chain disruptions from the COVID-19 pandemic ODM server orders increased by about 20% QoQ in 2Q20, although work resumption at some overseas server assembly lines yet remains lower than expected, in turn constraining the overall server unit shipment performance TrendForce estimates the QoQ increase in server shipments in 2Q20 to be about 9% TrendForce Senior Analyst Mark Liu indicates that North American and Chinese cloud service providers are still the dominant drivers in the server market Server demand in 1H20 has primarily benefitted from applications in the pandemic-driven stay-at-home economy, such as teleconferencing and media streaming However, as the inventory of ODM server barebones accumulates in 3Q20, CSPs are projected to abate their server orders; server unit shipments are thus expected to either hold flat in 3Q20 or undergo a slight QoQ dip Looking at 2020 in its entirety, the data center server demand from CSPs is projected to lead to a YoY growth of around 5% in global server shipments Google (GCP) GCP has conservatized its ODM server orders to mitigate risks related to supply chain disruptions caused by the pandemic in 2Q20 As such, GCP’s demand has slowed down considerably during 2Q20 Following a quarter of adjustments, issues regarding labor and materials at server assembly lines, in addition to supply chain disruptions, have mostly been resolved Server unit shipments to GCP are therefore likely to ramp up in 3Q20 GCP’s yearly server demand in 2020 will be driven by software optimization and the overall trend for servers to be manufactured to client-specific specs Server orders from GCP are likely to grow by almost 20% YoY in 2020 Microsoft (Azure Cloud) Due to pandemic-induced delays in server component deliveries as well as pressure from the unfinished recovery of labor and logistics, server shipments to Microsoft grew by about 10-15% QoQ in 2Q20, slightly below expectations Even so, Microsoft’s yearly ODM server demand is expected to show a significant YoY growth in 2020, driven by demand from applications such as infrastructure build-out and digital transformation initiatives, which include, more specifically, its existing Office software business and enterprise cloud solutions Increased teleconference software demand, driven by the pandemic, is also accelerating the transformation of Microsoft’s business model, in turn escalating its purchasing demand for servers Facebook In spite of the pandemic’s impact on the progress of Facebook’s data center construction, its server supply chain issues are expected to be substantially addressed in 3Q20, with a reduction of server barebones inventory accumulated in 1H20 Server shipments to Facebook are projected to decline by a slight 2-3% QoQ in 3Q20, but the company’s overall operations will remain robust Facebook has been focusing its infrastructure planning in Asia-Pacific from the end of last year to 1H20 Apart from renovating its North American data centers with new servers, Facebook is also ramping up its data center and e-commerce expansion in Asia In 2H20, the schedule of server shipments to Facebook’s data centers in Europe will depend on the overall environment Facebook is expected to increase its server orders by up to 10% YoY this year Amazon (AWS) AWS has a more diverse supply chain compared with other CSPs and depends on system integrators to assemble the whole servers that it uses Quarterly shipments from ODMs to AWS are estimated to grow by 15% QoQ for 2Q20 The global activities of AWS indicate that its new self-build data centers in Asia-Pacific and its colocation demand are spurring server shipments As companies in Asia-Pacific are accelerating the course of their enterprise digital transformation, the demand generated by their cloud migrations will be the main driving force behind the digital infrastructure build-out in the region BAT (ByteDance/Alibaba/Tencent) Because China was first to experience the outbreak of COVID-19, the Chinese market saw a rapid and massive expansion of upside demand related to the adoption of telecommuting and the growth of the stay-at-home economy, thus causing the server demand from Tencent to surge by 30% YoY in 1Q20, which subsequently slowed down in 2Q20, since some of Tencent’s demand had already been pulled forward Tencent is likely to restart its server procurement in 2H20 in order to adjust the run rate of its servers following the resumption of normal businesses across China Alibaba’s cloud and e-commerce businesses, as well as replacement of older servers, boosted the company’s server demand, which increased by about 10-20% YoY, in 2Q20 But Alibaba’s server demand in 2H20 is expected to decelerate to some extent Regarding ByteDance’s infrastructure strategy, ByteDance is working with GDS (Global Data Solutions Limited) for the build-out of data centers in China It has also significantly increased the number of overseas service points Nearly one-third of its servers are now located in North America to ensure the smooth expansion of TikTok’s activities in that region TrendForce’s latest webinar, Compuforum 2020: Supply Chain Impacts and Challenges in the Post-COVID Era, will be available for viewing starting on Wednesday, July 8, 2020 TrendForce’s analysts specializing in the memory industry will provide detailed analyses of the pandemic’s effects on the industry’s supply and demand, as well as on related cloud business opportunities We kindly ask our media friends wishing to attend the webinar to fill in the form below for identification TrendForce reserves the right to approve registrations https://seminardramexchangecom/TFVPS/PRInvitationUSaspx?Code=adeio2O&industry=DX&lang=US

Press Releases
Despite Strong 1H20 Server Shipment Performance, COVID-19 Pandemic May Disrupt 2H20 Shipment Schedule, Says TrendForce

2020/04/06

Semiconductors

Continued lockdown of Malaysia and the Philippines, important regions for server back-end manufacturing, may result in a break in the server supply chain According to the latest investigations by the DRAMeXchange research division of TrendForce, owing to strong orders for data center servers and traditional server brands’ preemptive stock-up demand to avoid pandemic-induced breaks in the server supply chain, overall server shipment is expected to remain on the upswing in 2Q20 However, as 1Q20 was a relatively high base period, server shipment is projected to grow by a mere 7-9% QoQ in 2Q20, falling short of the usual double-digit QoQ growths in past second quarters TrendForce Senior Analyst Mark Liu indicates that demand from data centers, namely, the four leading cloud providers in the US, remains the driving force in the server market Owing to trade tensions between China and the US in 2019, the four companies transferred a portion of their production capacities from China to Taiwan, with these production lines having since passed qualifications As such, they were able to fulfill and ship last year’s deferred orders in 1Q20 Although the projected acceleration of the pandemic (which was previously an outbreak in early-2020) in 2Q20 poses risks of hindering the shipment schedules of some parts of the server supply chain, US companies have reacted by changing the shipping location of their servers and related components, among other strategies, to maintain a consistent level of shipment Therefore, they may still register a QoQ shipment growth in 2Q20 Most Chinese companies, on the other hand, have resumed factory operations Apart from undertaking measures to battle the pandemic in 1Q20, new infrastructure plans, including 5G and cloud computing, are gradually executed in 2Q20; server suppliers such as Huawei, Inspur, and H3C have ramped up their stock-up efforts for key components in response to their 2H20 production plans Alibaba has raised its inventory in anticipation for strong server demand in 2Q20 from its “New Retail” business Hema Fresh (known as Fresh Hippo in the west) and from the surge in bandwidth usage during the upcoming 618 shopping festival Likewise, ByteDance has also kept up its server orders to fulfill the demand from its newly built North American data centers TrendForce expects the emerging BAT’s (ByteDance, Alibaba, and Tencent) server demand in 2020 to come from both their overseas business expansions and their infrastructure build-out in China BAT are expected to see a 10-20% YoY increase in server demand this year The pandemic’s influence may be reflected in server shipment starting in 3Q20 The rapid global expansion of the pandemic has deferred the shipment schedule of servers and affected the supply of key components In particular, the Philippines and Malaysia are major manufacturing sites of non-memory server components The pandemic’s expansion in these regions may pose a potential risk of supply chain breakage in the 2H20 server market According to investigations by TrendForce, given that several of Intel’s assembly facilities are located in Malaysia, should the country extend its national lockdown, the production schedule of servers will be impacted in the mid- to long-term as a result On the other hand, some of Samsung’s back-end server DRAM packaging operations are based in Luzon, the Philippines Therefore, the continued quarantine of Luzon may affect the shipment schedule of Samsung’s server DRAM modules Despite normal levels of production at the moment, Samsung will have to reevaluate its capacity assignment in the future, in turn introducing even more unknowns into the current tight supply of server DRAM In short, TrendForce forecasts a constant growth in server shipment in 2020 Under an optimistic scenario, the pandemic can be contained in 2H20, resulting in a 5% YoY increase in yearly server shipment However, if the pandemic continues to accelerate in 2H20, in turn affecting the shipment schedule of servers, then a pessimistic scenario is likely, with a mere 3% YoY increase in yearly server shipment

Press Releases
Owing to Partial Work Resumption and Pre-Chinese New Year Stocking of Components, Chinese Server Shipment to Remain Healthy for Now, Says TrendForce

2020/02/10

Semiconductors

The server industry analysis by the DRAMeXchange research division of TrendForce thus far finds that frontline personnel of Chinese server manufacturers will return to work starting from 2/10, while other personnel resumed work on 2/3 Certain Chinese manufacturers resumed operations on 2/3 with government approval On the whole, the server supply chain recovery has been progressing better than expected Server manufacturers have traditionally increased capacity and stocked key components up to one month before the Chinese New Year to facilitate smooth shipment after the holidays As such, major ODMs believe that the coronavirus outbreak will have minimal impact on server shipment in the short term despite the delay in work resumption If work resumption on 2/10 cannot properly proceed, ODMs will increase their future production correspondingly According to Mark Liu, senior analyst at TrendForce, because most manufacturers have shifted their production lines to other regions such as Taiwan, the outbreak will have minimal impact on order fulfillment for US-based data center operators Orders for Chinese operators, such as Inspur and Huawei, depend on the extent of disease control, but are projected to have limited impact in the short term Overall, server shipment will not drastically change this year, but the most concerning aspect of the overall server industry remains the upstream supply of PCB, the production of which is relatively labor-intensive Therefore, it is imperative to continue monitoring the status of work resumption on production capacity However, server manufacturers have already stocked PCB in reserve, meaning there will unlikely be a shortage of PCB in the short term Server demand in China this year depends heavily on orders placed by telecom operators and internet data centers Remarkably, orders for 5G infrastructure servers have not been slashed by the coronavirus outbreak, with only a small number of orders being deferred As the primary suppliers of 5G infrastructure servers in China this year, both Huawei and ZTE have filed applications for early work resumption Chinese telecom operators are likely to fulfill their 2020 demands – projected to grow 120% YoY, reaching 300,000 units – on schedule An analysis of data center demand in China shows certain tech companies, such as Tencent and ByteDance, have ironically benefitted from the outbreak Many of Tencent’s academic and corporate clients are turning to distance education and telework, respectively, in turn raising Tencent’s server demand The company’s total yearly server demand is expected to reach 330,000 units this year, with a 20% increase YoY in orders placed On the other hand, the rising popularity of short-form videos in China, combined with a successful overseas expansion effort, means increased server orders placed by ByteDance, whose server demand will exceed the demand forecasts of Alibaba Cloud and Baidu individually ByteDance’s total yearly server demand is expected to reach 250,000 units this year To summarize, TrendForce believes the coronavirus outbreak will have limited impact on server supply The only noteworthy factor is the possible postponement of upstream PCB supply, which may affect the production schedule of server manufacturers in the upcoming months Server demand is expected to see growths this year owing to increases in telecom operators’ orders and in applications of distance education As well, increased bandwidth consumption will drive demand for data center servers

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