The global semiconductor shortage is having a meaningful impact on server shipments and vendor behaviour. Procurement teams at server vendors have turned more cautious in the face of uncertainty. For example, 3Q21 data points indicate that there’s been a further server CPU inventory build, worldwide. There is now over 1 million units of server CPUs above the normal level we’d expect to see in the supply chain. Despite end-user demand being strong, 3Q21 sales data points to 3.4 million servers shipping, globally.
Amongst the most impacted components are power management ICs (PMIC), which have a lead time of over 24 weeks. Server vendors indicated that both Texas Instruments and Analog Devices are unable to respond to PMIC demand. As we noted earlier in 2021, switch ICs are another impacted component with a 50+ week lead time. While switch ICs are not soldered onto the server motherboard, server installations are dependent on Ethernet switch availability.
As we’d expect to see in a supply shortage, the cost of components is going up and this is having an impact on server prices. Server ASPs have grown high single digit year-over-year in 3Q21. As a result, despite server shipments coming approximately 300K behind our 3Q21 forecast, we expect server revenue to come in close to our forecast at about $23 billion, which would constitute a quarter-over-quarter revenue growth.
AMD set another market share record with 18% of servers shipped in 3Q21 using their CPUs. Last quarter we noted the growing number of hyperscale cloud service providers forming partnerhsips with AMD. Facebook was the most recent addition to the list, announcing intent to use AMD in their servers earlier this month. The historic best AMD performance in the data center server market was in 2006 when 14% of the servers shipped were configured with an AMD CPU.
OMDIA’s server market tracker and analysis will be published in the December 2021 and will include server vendor share for 3Q21, 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.
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