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The growing user base of smart handheld devices and the expansion of Internet-based services for these devices have generated enormous demand for cloud computing and cloud storage businesses in the recent period. Correspondingly, the usage of data centers are also on the rise worldwide. Taking account of these trends, the latest server market analysis by DRAMeXchange, a division of TrendForce, estimates an annual global shipment growth of about 3.8% for 2017.
While the growing need for cloud computing and cloud storage is driving shipments in the server market, DRAMeXchange also finds that the increase in the average memory content in server units is raising the demand for server DRAM and NAND Flash. Splitting the server market by application segments indicates that data centers account for the majority of the demand.
Major technology companies such as Google, Amazon and Microsoft are currently setting up more data centers for their services. As a result, the global server ODM market this year is expected to see annual increase of 9.2% in order volume. At the same time, China has also become an important regional market for server ODMs. The country’s domestic Internet and cloud services providers Baidu, Alibaba and Tencent have recently emerged as major clients targeted by server ODMs. According to DRAMeXchange’s latest estimate, China’s server shipments going to Baidu, Alibaba and Tencent will increase by about 13% in unit volume this year compared with 2016.
For major Chinese server ODMs Huawei, Lenovo, Inspur, and Sugon, most of their orders will be related to tender offerings for data centers within the country. The other major sources of domestic demand will be projects from government agencies and telecommunication companies.
Competition in the server CPU market heats up as the manufacturing of high-end chips transitions to the 10nm-class technology
DRAMeXchange additionally points out that the manufacturing of high-end server processors has migrated to 10nm-class processes, and this technology transition is going to trigger a wave of intense competition in the server CPU market. Intel and AMD will release their newest server CPU platforms – respectively named Purley and Naples – in the second quarter of 2017. Both platforms are designed for the enterprise server and data center application. By the third quarter, most server CPU product lines are expected to have formally adopted either one of the two platforms.
Intel’s Purley-based solutions for high-performance computing will be the first to arrive in the market. As for AMD, its Naples-based chips are going to take fully take advantage of the multi-core design to boost their computing power. DRAMeXchange points out that Naples-based products will have a performance advantage over Intel’s current mainstream product Xeon E5 v4. However, AMD will still be in a relatively weak position versus Intel as the latter will be releasing the more powerful Purley platform that is supported by a wider product ecosystem.
With regard to products based on the ARM architecture, Qualcomm’s Centriq chips are now undergoing small batch runs in foundries. The Centriq line is specifically designed for low-power servers that are responsible for the backend operation of the data center. DRAMeXchange notes that most of ARM products are in backend servers residing in the data centers across the U.S. as they are better than x86 chips in areas related to SSD caching and storage.