AI Servers to Account for 12.1% as Global Server Shipments Rise by 2.05% in 2024

AI server demand drives growth in the server market, with Foxconn expected to have the highest growth rate, followed by Inventec, while Quanta and Supermicro face flat growth rates.

Growing demand for AI servers, which are expected to account for 12.1% of total shipments
Foxconn projected to experience highest growth rate, with significant orders from major companies like Dell, AWS, Google, and Microsoft
ODMs expected to see robust growth in AI server shipments, with double-digit growth rate and market share

According to TrendForce, the server market is still heavily reliant on American cloud service providers (CSPs) for growth this year. However, due to factors such as high inflation and increased corporate financing costs, overall demand has not yet fully recovered to pre-pandemic levels. It is estimated that global server shipments will reach approximately 13.654 million units in 2024, representing a modest increase of about 2.05% year-over-year.

One notable trend in the market is the increasing focus on AI servers, which are expected to account for around 12.1% of total shipments. Foxconn, a major player in the industry, is projected to experience the highest growth rate, with an estimated annual increase of about 5-7%. This growth can be attributed to significant orders from major companies like Dell, AWS, Google, and Microsoft. Foxconn has also made strides in securing AI server orders from Oracle and AWS.

Inventec, another key player, is expected to have the second-highest growth rate, with an estimated annual increase of about 0-3%. While OEM orders are declining, Inventec’s CSP orders are supported by major players like AWS and Google. Additionally, strong demand from Chinese customers like ByteDance is anticipated to contribute to Inventec’s double-digit growth in AI server shipments.

Quanta Computer and Supermicro, on the other hand, are expected to see relatively flat growth rates in server shipments. Quanta faces uncertainties due to a reduction in orders from Meta and a shift in demand from Intel platforms to AMD by Google. However, Quanta is expected to perform better in AI server shipments, thanks to orders from North American cloud customers like Microsoft and AWS.

Supermicro is focusing its efforts on AI server growth this year and has the potential to double its shipments in this segment. However, the lack of a significant rebound in general-purpose server shipments means that overall levels are likely to remain stable. Supermicro’s high-end AI servers, such as the HGX models, primarily serve second-tier data centers in Europe and the US.

Overall, ODMs (Original Design Manufacturers) are expected to see robust growth in AI server shipments in 2024, driven primarily by orders from North American cloud data centers. Both the growth rate and market share of AI servers are expected to reach double digits. However, Chinese clients may face constraints due to US restrictions. Servers equipped with advanced AI training chips, such as nVidia’s H series or AMD’s MI series, are anticipated to experience significant shipment increases.

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Background Information

About AMD: AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor expertise, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

About Dell: Dell is a globally technology leader providing comprehensive solutions in the field of hardware, software, and services. for its customizable computers and enterprise solutions, Dell offers a diverse range of laptops, desktops, servers, and networking equipment. With a commitment to innovation and customer satisfaction, Dell caters to a wide range of consumer and business needs, making it a important player in the tech industry.

About Foxconn: Foxconn, officially known as Hon Hai Precision Industry Co., Ltd., is a global technology manufacturing company. With a rich history dating back to 1974, Foxconn has played a pivotal role in revolutionizing the electronics industry. Foxconn is mainly known for its role as a important contract electronics manufacturer. The company specializes in assembling a wide variety of electronic products, including smartphones, tablets, computers, televisions, gaming consoles, and other consumer electronics on behalf of some of the world's leading technology brands

About Google: Google, founded by Larry Page and Sergey Brin in 1998, is a multinational technology company known for its internet-related services and products. Initially for its search engine, Google has since expanded into various domains including online advertising, cloud computing, software development, and hardware devices. With its innovative approach, Google has introduced influential products such as Google Search, Android OS, Google Maps, and Google Drive. The company's commitment to research and development has led to advancements in artificial intelligence and machine learning.

About Intel: Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

About Microsoft: Microsoft, founded by Bill Gates and Paul Allen in 1975 in Redmond, Washington, USA, is a technology giant known for its wide range of software products, including the Windows operating system, Office productivity suite, and cloud services like Azure. Microsoft also manufactures hardware, such as the Surface line of laptops and tablets, Xbox gaming consoles, and accessories.

About nVidia: NVIDIA has firmly established itself as a leader in the realm of client computing, continuously pushing the boundaries of innovation in graphics and AI technologies. With a deep commitment to enhancing user experiences, NVIDIA's client computing business focuses on delivering solutions that power everything from gaming and creative workloads to enterprise applications. for its GeForce graphics cards, the company has redefined high-performance gaming, setting industry standards for realistic visuals, fluid frame rates, and immersive experiences. Complementing its gaming expertise, NVIDIA's Quadro and NVIDIA RTX graphics cards cater to professionals in design, content creation, and scientific fields, enabling real-time ray tracing and AI-driven workflows that elevate productivity and creativity to unprecedented heights. By seamlessly integrating graphics, AI, and software, NVIDIA continues to shape the landscape of client computing, fostering innovation and immersive interactions in a rapidly evolving digital world.

About Oracle: Oracle Corporation is a important American multinational technology company founded in 1977 and headquartered in Redwood City, California. It's one of the world's largest software and cloud computing companies, known for its enterprise software products and services. Oracle specializes in developing and providing database management systems, cloud solutions, software applications, and hardware infrastructure. Their flagship product, the Oracle Database, is widely used in businesses and organizations worldwide. Oracle also offers a range of cloud services, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).

About Supermicro: Supermicro is a reputable American technology company founded in 1993 and headquartered in San Jose, California. Specializing in high-performance server and storage solutions, Supermicro has become a trusted name in the data center industry. The company offers a wide range of innovative and customizable server hardware, including motherboards, servers, storage systems, and networking equipment, catering to the needs of enterprise clients, cloud service providers, and businesses seeking reliable infrastructure solutions.

Technology Explained

AWS: Amazon Web Services (AWS) is a cloud platform powered by Amazon that enables users to access cloud computing services, such as storage, data analytics, and distributed computing. It offers users the ability to utilize both on-demand and pay-as-you-go computing services, making it a great option for the computer industry. It offers a wide range of services with great flexibility for a variety of uses. It can help companies build powerful web and mobile applications, run large-scale analytics, quickly provision servers and other services, design sophisticated architectures for data storage, and more. AWS provides access to a wide range of services such as virtualization, storage, database, monitoring, analytics, and other services that can help organizations increase agility, manage complexity, and remain on the cutting edge of technology. Many big and famous organizations use AWS services to give them a competitive edge, and more and more companies are turning to this service for their computer needs.