As a result of the continuously booming orders for data centers, the traditional brand factories have continued to stock up on supplies in advance to prevent supply cuts due to the impact of the COVID-19 outbreak. Server shipments will continue to develop in Q2 and the server supply chain IC design and connector cable of Taiwan factories are expecting large orders. These manufacturers include ASPEED and Nuvoton, which manufacture remote server control chips, Insyde, which manufactures BIOS firmware chips, and LOTES, LINTES, Alltop, etc., which manufacture connector cables. Their Q2 operations have been busy to meet more shipments, therefore, experiencing better performance growth compared to their peers.

 

Based on a survey completed by TrendForce’s memory storage research, a subsidiary of TrendForce Corp., server shipments will continue to grow in Q2 but are only expected to increase by 7-9% quarter-to-quarter because of the high Q1 base period, which not as good as the double-digit performance in the same period in the past.

 

Analyst Jiahao Liu stated that the Q2 demand for data centers is the most active among the four largest cloud industries in North America. While the pandemic outbreak is still spreading and posing a threat to the shipment schedules of some server supply chains, US-based companies often change shipment locations to confirm normal shipments. Therefore, Q2 shipments can still progress in comparison to Q1.

 

Most mainland Chinese companies have resumed factory operations. In addition to the new epidemic prevention Q1 demand, these companies are also progressively launching new infrastructure projects, such as 5G and cloud infrastructure in Q2, which has also motivated third-tier related suppliers including Huawei, Inspur, and Sunwah to expand their efforts to pull components and parts in preparation for the production plans later this year.

 

Regarding the demand, Hema and Alibaba’s new retail business demands have significantly increased. To meet the 618-shopping festival demand, it is expanding its Q2 stock volume. ByteDance has continued to increase its server orders to cope with the needs of the newly constructed data centers in North America. TrendForce further evaluated that the overall annual server demand will likely develop by 10-20%. (News source: Economic Daily News)