Server Shipments to Fall an Estimated 2.85% YoY in 2023
May 17, 2023 | TrendForceEstimated reading time: 1 minute

TrendForce reveals that alongside the four major CSPs reducing their procurement volumes, OEMs like Dell and HPE have also scaled back their annual shipment volume forecasts at some point between February and April, predicting YoY declines of 15% and 12%, respectively. Furthermore, server demand in China is facing headwinds due to geopolitical and economic challenges. Consequently, TrendForce projects a downward revision in global server shipment volumes for this year—a 2.85% YoY decrease at 13.835 million units.
TrendForce emphasizes that the server market in 1H23 remains pessimistic, with 1Q23 shipments experiencing a 15.9% QoQ decrease due to off-season factors and end-user inventory adjustments. The expected industry boom in 2Q23 failed to materialize, leading to a modest QoQ growth estimate of only 9.23%. Persistent influences on server shipments include OEMs lowering shipment volumes, subdued domestic demand in China, and continuous supply chain inventory adjustments. ESG issues have also led CSPs to prolong server lifecycles and reduce procurement volume. Moreover, OEMs are lengthening supports period for older platforms as businesses seek to control capital expenditures, further contributing to market strain.
Concurrently, with the growing excitement surrounding ChatBOTs this year, AI server shipments have witnessed a significant boost, driven by the proactive investments of industry giants such as Microsoft and Google. TrendForce anticipates a remarkable 2023 growth rate surpassing 10% for AI server shipments. However, as AI servers currently account for a relatively small portion (<10%) of total server shipments, their impact on revitalizing the sluggish server market remains fairly restricted.
Whether the server market can rebound this year hinges upon the rate of inventory reduction. Given current estimates, this turnaround could materialize as early as late 2023 or extend into the first half of 2024. Meanwhile, the rate of inventory depletion will also affect the schedule for introducing new platforms and may temper suppliers’ eagerness to transition to DDR5 and lower prices. Taking into account present market conditions, TrendForce does not rule out the possibility of further downward revisions to annual server shipment forecasts.
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