5G Predicted to Push Server Shipments to Their Peak by 2020

Credit: ShutterstockCredit: ShutterstockDRAMeXchange, a division of market research firm TrendForce, shared predictions today that worldwide server shipments will "peak" by 2020. The current growth is mainly attributed to increased adoption of 5G technology.

According to DRAMeXchange Senior Analyst Mark Liu, global server growth momentum in 2018 came primarily from North American brands, which were responsible for 30% of total shipments.

Enterprise servers still comprise the largest category of server buyers, while Internet data center companies are expected to increase their market share in server shipments from 35% in 2018 to 40% in 2019.

Telecommunications companies are also expected to increase their demand for servers as 5G technology adoption increases and begins to transform businesses. This demand will slow down by the end of 2020, so the total server shipments are expected to peak next year.

Off-Season Impact

According to the DRAMeXchange report, the first quarter off-season didn’t impact data center demand too much, as the total shipments continued to experience steady growth. ODM direct business shipments grew by 1.3% compared to the quarter before.

Brands were negatively impacted by the off-season, seeing a 20% fall in shipments compared to the previous quarter. For the first half of the fiscal year, Dell EMC, Hewlett Packard Enterprise and Inspur took the first three places in terms of market share, representing 15.8%, 13.7% and 7.5%, respectively.

The report also predicted that server demand from China’s top cloud services providers will drop by 15% this year, while the demand from North American companies is expected to grow 5-10%. Smaller cloud services providers, such as China’s Bytedance and California-based NetApp, were predicted to see much higher growth rates, over 40% compared to last year, due to their overseas business development and self-built data centers.

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