Global server shipments to grow to 17 million units in 2021

Global server shipments are forecast to grow 4.5% on year to nearly 17 million units in 2021, according to Digitimes Research, which estimated previously a higher 5.1% increase.

IC shortage, power cuts in China and harbor congestions are three major factors behind the lowered growth estimate for server shipments, as they continue to affect server production and shipments in the fourth quarter of the year.

Shortage of certain ICs and components will remain the largest negative factor likely to affect global server shipments in the quarter, with low-end, low price ICs, in particular, to see the worst crunch as they are at lower pecking order at foundry houses.

In contrast, server vendors or ODMs have higher inventory of high-end CPU and GPU chips thanks to supply chain partners usually giving priority capacity support for such chips to enjoy higher gross margins and unit prices.

But shortage of ABF substrates needed to process server CPU and GPU chips may affect production of such chips in the months ahead, while storage and networking controller chips will also see tight supply.

Peripheral chips, especially active small ICs including power management ICs (PMIC), logic gateway chips, board management controllers, MOSFETs and diodes, are facing a supply gap of over 10% and unlikely to ease until the second half of 2022. Server-use passive components including inductors, resistors and capacitors, however, are expected to see relatively sufficient supply in fourth-quarter 2021, Digitimes Research notes.

Meanwhile, harbor congestions may hinder direct shipments of finished server products to US datacenter clients or deliveries of server motherboards to US system integrators. But ODMs including Wiwynn, Inventec and Foxconn have managed to cushion the impact by sending server motherboards and related components to their assembly plants in Mexico before delivering shipments to their clients in the US through inland logistics systems.

Power cuts in China enforced since late September are affecting PCB production in China, and may further tighten China supply of high-energy-consuming upstream materials such as ferrite core and plastics, all likely to more or less disrupt server production. DigiTimes