Demand for compute remains strong in 1Q21

The first quarter of 2020 was a record setting one in the data center market. Server shipments in what is seasonally a weak quarter exceeded 3 million units. Despite this record baseline, first data points on 1Q21 indicate server shipments exceeded 3 million units again. 

Demand for data center compute continues to be strong and we believe 1Q21 would have been even stronger had it not been for the semiconductor supply shortage. We learned from vendors that the flow of server CPUs out of TSMC and Intel’s fabs was steady in 1Q21 but supply of other components necessary to build a server was tight, including power semis, BMC and PCB substrate. For more details, see the article our partners at Data Center Knowledge released today.  

The configuration of servers continues to change. Arm-based CPUs are increasingly finding their way into the servers of cloud service providers.

•  Amazon continued deploying servers with their in-house developed Graviton 2 CPU.

•  Ampere disclosed that Microsoft, Oracle, Tencent, ByteDance, Equinix and a number of Chinese cloud service providers are using servers with their Altra CPU.

In 1Q20, servers with arm-based CPUs are on track to make up more than 4% of the total server shipped. We intend to raise our long-term forecast for Arm-based CPU penetration given that the above points succeed announcement we saw from NVIDIA on Grace and existing activity from Huawei, Marvell, Fujitsu and Google.

In the quarter we also saw AMD’s share of servers increase. Over 13% of the servers shipped in the quarter had an AMD CPU. 

OMDIA’s server market tracker and analysis will be published in the June 2021 and will include server vendor share for 1Q21, a 5-year forecast for servers by end-user segment, CPU, co-processor, form factor and region. It ships as a part of our Data Center Compute Intelligence Service.