Global server shipment volumes will drop 2.85 percent to 13.835 million units in 2023, TrendForce projects.
Four major CSPs — Amazon Web Services (AWS), Microsoft Azure, Google Cloud — have reduced their procurement of servers. Leading server OEMs like Dell and HPE have also scaled back their shipment volume forecasts at some point between February and April, predicting dip of 15 percent and 12 percent, respectively.
Server demand in China is facing headwinds due to geopolitical and economic challenges.
Server shipment fell 15.9 percent QoQ in Q1 2023 due to off-season factors and end-user inventory adjustments.
Persistent influences on server shipments include OEMs lowering shipment volumes, subdued domestic demand in China, and continuous supply chain inventory adjustments. ESG issues have also led CSPs to prolong server lifecycles and reduce procurement volume.
Moreover, server OEMs are lengthening supports period for older platforms as businesses seek to control capital expenditures, further contributing to market strain.
AI server shipments have witnessed a significant boost, driven by the proactive investments of industry giants such as Microsoft and Google.
TrendForce anticipates a remarkable 2023 growth rate surpassing 10 percent for AI server shipments. As AI servers currently account for a relatively small portion (<10 percent) of total server shipments, their impact on revitalizing the sluggish server market remains fairly restricted.
A rebound in the server market this year hinges upon the rate of inventory reduction. This turnaround could materialize as early as late 2023 or extend into the first half of 2024.
The rate of inventory depletion will affect the schedule for introducing new platforms and may temper suppliers’ eagerness to transition to DDR5 and lower prices.