Stefan Mileschin

Demand should pick up in the middle of the year

Orders for datacenter servers are expected to slow down in the first half of 2019 but will pick up in the second half and grow even stronger in 2020.

Digitimes said that many first tier cloud computing service providers are turning to focus on raising the use of their new storage capacity established during the past year. It quoted Wiwynn as having 90 percent of its revenues contributed by orders from US based cloud computing datacenter players. For 2019, Wiwynn expects its on year shipment growth to weaken and will only reach below 30 percent.

Wiwynn president Emily Hong said the company's two major US-based Internet service provider clients have been investing in datacentre establishment since 2017, allowing the company to enjoy robust shipment growths during the period from the second half of 2017 to 2018. However, since the second half of 2018, the clients have started making adjustments to the utilization of its storage capacity and the process is expected to continue in 2019.

The industry will still be in good shape in 2019, but Wiwynn is unlikely to more than double its revenues in the year as it did in 2018.

Digitimes Research's latest special report on the global server industry also estimates that Wiwynn's shipments will rise over 25 percent on year in 2019, allowing the company to get a hold of around seven percent share in Taiwan's overall volumes.

Fellow competitor Quanta Computer expects its server operation to continue enjoying a double digit percentage on year growth in 2019.

For 2020, global demand for servers will see sharp growth as new applications including AI and Internet of vehicles (IoV) are expected to strongly stimulate the requirement of datacenter capacity.

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