Global server shipments remained flat quarter over quarter at 3.4 million units in the third quarter of 2021. Revenues also reached 21.6 billion, up 6% compared to the third quarter of 2020, driven by an uptick in server prices.
Manoj Sukumaran, principal analyst, data centre computing and networking at Omdia, noted that the data centre server market continues to be supply constrained because of the shortage of key semiconductor components like power management ICs, micro controllers, and other ASICs.
He added that the demand for servers remains very strong across market segments and vendor order backlogs are at historically higher levels.
Omdia lowered its annual server revenue forecast to 86 billion reflecting the impact of the semiconductor shortage. Vendors are unable to fulfil all orders, and many expect major spill over into 2022. Omdia does not expect the component shortage to improve until at least the second half of 2022.
Shipments of servers with Arm (short for Advanced RISC Machines) CPUs reached record levels according to the latest Data Center Server Tracker from Omdia. 5% of the servers shipped in the third quarter of 2021 had an Arm CPU, driven by cloud service provider demand.
New kid on the block
Amazon increased the deployment of servers with its in-house developed Arm-based CPU, Graviton. Independent Arm-based CPU vendor, Ampere, saw a strong demand uptick from its key customers Oracle and Equinix. Huawei is increasing the deployment of servers running its in-house developed Arm-based CPU, Kunpeng within its cloud business.
AMD steadily increasing market share
AMD continued to steadily increase its market share in the server CPU market. In the third quarter, 18% of the servers shipped had an AMD CPU, up two percentage points from the prior quarter.
Sukumaran said AMD is benefitting from the strong uptick in demand from hyperscale CSPs who are deploying high core count AMD Rome and Milan CPUs. AMD’s wins reflect their x86 market-leading core density and cache memory per socket.
“We don’t play vendor favourites or predict winners and losers in the market but it’s important to note that AMD’s announced CPU line-up including a new cloud-optimized CPU variant, called Bergamo, with up to 128 cores, will likely be very compelling to cloud service providers,” he continued.
White box thrive despite strong supply chain headwinds
The group of White Box Vendors, including Wiwynn, QCT (Quanta), Tyan (MiTAC), and Ingrasys (Foxconn), continued to lead the market despite struggles with semiconductor shortages and other supply chain challenges.
The strong demand from hyperscale cloud service providers has created a huge backlog of orders at White Box Vendors, which we expect to be fulfilled next year.
A notable market movement in the third quarter is Inspur surpassing HPE in the number of servers shipped. Inspur shipped about thirty thousand servers more than HPE in the third quarter, although HPE remains the third-largest vendor in terms of server revenue.
