Com­pe­ti­ti­on in the mar­ket for high-per­for­mance semi­con­duc­tors tar­ge­ting data cen­ter workloads is red hot accor­ding to the latest Data Cen­ter Ser­ver Mar­ket Tra­cker from rese­arch group Omdia.

In the ser­ver CPU mar­ket, AMD scored its best-ever quar­ter from a mar­ket share and sales per­spec­ti­ve with demand from hypers­ca­le cloud ser­vice pro­vi­ders, and Goog­le in par­ti­cu­lar, being a big con­tri­bu­ting fac­tor to AMD’s strong performance.

The demand for ser­vers across all mar­ket seg­ments remain­ed strong in the second quar­ter of 2021 amidst con­cerns about order ful­fill­ment due to com­po­nent cons­traints. The indus­try saw 3.4 mil­li­on ser­vers ship­ped in the second quar­ter of 2021, the same amount as during the record second quar­ter of 2020. This was in line with Omdia’s fore­cast for the quar­ter and resul­ted in a total of $21.5 bil­li­on dol­lars of ven­dor revenue.

Full year ser­ver reve­nue is on track to grow 11 per­cent, rea­ching $92 bil­li­on. The strong reve­nue growth is boos­ted by a ste­ady increase in ser­ver pri­ces. Omdia con­ti­nues to see ser­vers opti­mi­zed for com­pu­te- and data-inten­si­ve workloads like arti­fi­ci­al intel­li­gence and ana­ly­tics take hig­her share of the annu­al ship­ments. The­se are con­fi­gu­red with a pool of co-pro­ces­sors, more memo­ry and fas­ter storage.

Com­po­nent shorta­ge puts second half of 2021 ship­ments at risk
The­re is a dire shorta­ge of some cri­ti­cal com­pon­ents like power manage­ment inte­gra­ted cir­cuits (PMICs) which could impact ser­ver ship­ments, par­ti­cu­lar­ly in the backend of the year. Ser­ver ven­dors have increased their com­po­nent inven­to­ry levels to miti­ga­te the shorta­ge and limit the impact of long lead times. This short-term reso­lu­ti­on is put­ting extra strain on the alre­a­dy stres­sed ser­ver com­po­nent sup­p­ly chain and is pushing pri­ces up.

“Demands for semi­con­duc­tors rela­ted to power manage­ment, have gone up expo­nen­ti­al­ly due to pro­li­fe­ra­ti­on of smart­phones, other per­so­nal elec­tro­nics devices, incre­asing elec­tro­nics sys­tems in cars, and Inter­net of Things devices. Com­pon­ents like PMICs are nor­mal­ly manu­fac­tu­red on an 8‑inch wafer to make it com­pe­ti­tively pri­ced. Over the last many years the­re was no signi­fi­cant invest­ment in 8‑inch fab capa­ci­ty as it was con­side­red a low mar­gin busi­ness. This makes it dif­fi­cult to sol­ve the sup­p­ly shorta­ge issue in the short term,” said Manoj Suku­ma­ran, prin­ci­pal ana­lyst, data cen­ter com­pu­ting and net­wor­king, at Omdia. “As the sup­p­ly shorta­ge wor­sened this year, some com­pa­nies star­ted inves­t­ing in 8‑inch capa­ci­ty, but con­side­ring that capa­ci­ty expan­si­on takes at least a year to be pro­duc­ti­ve, it is likely that the PMIC shorta­ge will con­ti­nue until next year.”

The semi­con­duc­tor wars are in full swing
Along­side AMD’s suc­cess in the ser­ver CPU mar­ket, Intel signal­ed it will take a new approach to CPU archi­tec­tu­re, intro­du­cing new designs for an effi­ci­ent and a per­for­mance core. The for­mer would enable through­put effi­ci­en­cy and mul­ti­tas­king with the low vol­ta­ge ope­ra­ti­on crea­ting head­room to increase fre­quen­cy and sca­le up per­for­mance for more deman­ding workloads. The per­for­mance-core design appro­pria­te­ly tar­gets sin­gle-threa­ded appli­ca­ti­on per­for­mance. Most important­ly, the com­bi­na­ti­on of the­se new micro­ar­chi­tec­tures would enable a wider ran­ge of cus­to­mi­zed CPUs that match appli­ca­ti­on requirements.

As the batt­le of the x86 archi­tec­tures con­ti­nues, Arm-based CPU ven­dors have been making gre­at pro­gress in pene­t­ra­ting the ser­vers of the hypers­ca­le cloud ser­vice pro­vi­ders. Alt­hough Gra­vi­ton deploy­ments at AWS some­what slo­wed down in 2Q20, Oracle’s deploy­ments of ser­vers with Ampere’s CPU ram­ped. We also saw good momen­tum for Fuji­tsu and Huawei’s Arm-based CPUs.

White box domi­nan­ce con­ti­nues as hypers­ca­le cloud ser­vice pro­vi­ders grow and grow
The group of White Box Ven­dors, inclu­ding Wiwynn, QCT (Quan­ta), Tyan (MiT­AC), and Ingra­sys (Fox­conn), con­tin­ued to lead the mar­ket as hypers­ca­le cloud ser­vice pro­vi­ders remain­ed stead­fast in their expan­si­on. All North Ame­ri­can hypers­ca­le cloud ser­vice pro­vi­ders increased their purcha­sing quar­ter-over-quar­ter with Micro­soft, Ama­zon and Apple being par­ti­cu­lar­ly acti­ve. As a result, White Box Ven­dors gai­ned mar­ket shares in the quar­ter, main­tai­ning their lead with a 26% reve­nue mar­ket share.

Dell repor­ted par­ti­cu­lar­ly strong per­for­mance, gro­wing their reve­nue 4 per­cent quar­ter-over-quar­ter and 12 per­cent year-over-year. The ven­dor attri­bu­ted its growth to a rebound in enter­pri­se demand and lar­ge open RAN deals with Voda­fone, Oran­ge and Deut­sche Telekom.

Omdia found an inte­res­t­ing deve­lo­p­ment in the quar­ter was Inspur almost bea­ting HPE from a ser­ver ship­ments per­spec­ti­ve. The US ven­dor ship­ped just nine thousand more ser­vers than Inspur. From a reve­nue per­spec­ti­ve, though, HPE had a solid quar­ter with strong growth in high-per­for­mance com­pu­te and mis­si­on-cri­ti­cal deals. In fact, HPE indi­ca­ted that their order books for high per­for­mance com­pu­ting busi­ness now exceed $2.5 billion.

World­wi­de data cen­ter ser­ver reve­nue by vendor

Source: Omdia

“We’ve tra­cked the evo­lu­ti­on of tech­no­lo­gy con­sump­ti­on models for many years and were not sur­pri­sed by the rene­wed efforts of ser­ver ven­dors to pro­vi­de their infra­struc­tu­re as a ser­vice, albeit loca­ted at the pre­mi­ses of their cus­to­mers,” said Vlad Gala­bov, direc­tor, cloud and data cen­ter rese­arch, at Omdia. “In the second quar­ter of 2021 HPE, Dell and Leno­vo all repor­ted strong trac­tion for their indi­vi­du­al offe­rings. Inte­res­t­ingly, HPE also deli­ver­ed a super­com­pu­ter as a ser­vice. This is in line with a broa­der trend we see at lar­ge enter­pri­ses for lowe­ring capi­tal expen­dit­u­re in favor of hig­her ope­ra­ting expenses.”

-ENDS-

The Omdia Data Cen­ter Ser­ver Mar­ket Tra­cker covers data cen­ter and edge ser­ver deploy­ments across cloud ser­vice pro­vi­ders, enter­pri­ses and com­mu­ni­ca­ti­on ser­vice pro­vi­ders. Using the report cli­ents can iden­ti­fy key ser­ver con­fi­gu­ra­ti­on trends, the workloads run­ning on them and whe­re they are being located.

ABOUT OMDIA:

Omdia is a lea­ding rese­arch and advi­so­ry group focu­sed on the tech­no­lo­gy indus­try. With cli­ents ope­ra­ting in over 120 count­ries, Omdia pro­vi­des mar­ket-cri­ti­cal data, ana­ly­sis, advice and cus­tom consulting.

Omdia was for­med in 2020 fol­lo­wing the mer­ger of IHS Mar­kit, Trac­ti­ca, Ovum and Hea­vy Rea­ding. Sit­ting at the heart of the Infor­ma Tech port­fo­lio, Omdia rea­ches over four mil­li­on tech­no­lo­gy decis­i­on makers, influen­cers and prac­ti­tio­ners that form part of the wider Infor­ma Tech com­mu­ni­ty and has spe­cia­list rese­arch prac­ti­ces focu­sing on Enter­pri­se IT, AI, Inter­net of Things, Com­mu­ni­ca­ti­ons Ser­vice Pro­vi­ders, Cyber­se­cu­ri­ty, Com­pon­ents & Devices, Media & Enter­tain­ment and Govern­ment & Manufacturing.

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