DIGITIMES Research estimates that global server shipments in the third quarter of 2024 grew by 4.3% compared to the previous quarter, surpassing its earlier forecasts, but because of the high base period built, the fourth-quarter shipments are expected to slip sequentially.
Major US cloud service providers continued to expand their procurement of next-generation general-purpose servers in the third quarter, and most cloud providers also increased their purchases of high-end AI servers compared to the previous quarter.
In terms of shipments, the performance of server brand vendors fell short of previous expectations as the vendors had witnessed their customers reduce general-purpose server procurement in an effort to buy more high-priced AI servers.
In the fourth quarter of 2024, global server shipments are expected to decrease by 5.2% quarter-on-quarter because of the high comparison base in the third quarter as a result of the major US cloud service providers' keen server procurement and the fact that shipments of Nvidia GB200 AI server racks are expected to begin, which should cause a deceleration in the shipment pace of general-purpose servers, DIGITIMES Research's latest report on global server shipments shows.
Server brand vendors and Chinese cloud service providers also lack shipment momentum in the fourth quarter with both groups expected to experience a greater sequential decline in shipments compared to their US cloud service counterparts.
The overall server market continued to recover in the third quarter of 2024 with US-based cloud service providers such as Meta, Microsoft, and Amazon all accelerating the adoption of new processor platforms, driving their combined shipments to go up 13% from a quarter ago.
US-based server brands, except for Dell, all experienced a quarter-on-quarter decline in third-quarter 2024 shipments, leading to an overall shipment decline of 1.1% in the quarter. The decline was due primarily to enterprises' conservative approach towards IT investments unrelated to AI, leading to a reduction in the purchase of general-purpose servers.
Looking ahead to the fourth quarter of 2024, US cloud service providers are mostly expected to suffer from a dramatic sequential slump in shipments, with the exception of Meta and Microsoft as the two firms are anticipated to continue their new-server procurement momentum from the previous quarter and see slight quarter-on-quarter increase in shipments.
The overall global economy in the fourth quarter will remain uncertain, affecting enterprises' investments. With China's economy also in deceleration, US brands and Chinese cloud service providers may experience a sharp order decline in the fourth quarter.
In the fourth quarter, Meta's and Microsoft's shipments are relatively resilient, which resulted in better performance for their key Taiwanese server manufacturing partners Wiwynn and Foxconn.
