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September 24, 2017

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ODM servers to see explosive growth in coming years: IDC

TAIPEI -- Explosive growth in the number of computer servers being sold domestically by Taiwanese original design manufacturers (ODMs) will continue in the coming years, tech tracking firm International Data Corp. (IDC) predicted yesterday.

The overall revenue of the country's server market in 2013 increased by 2.4 percent from the previous year to NT$9.25 billion (US$305 million), 6 percent of which was attributable to ODM servers, IDC said in a report.

ODM products accounted for only 0.9 percent of Taiwan's server revenue in 2012, but the segment is forecast to continue its strong growth from this year to take a double-digit share of the overall revenue in 2017, the research company forecast.

ODM server makers are mostly Taiwanese suppliers such as Quanta Computer Inc., Wiwynn Corp. of the Wistron Group, Inventec Corp. and Compal Electronics Inc., which generally assemble server products for brand-name customers overseas.

Excluding ODM products, the server revenue in Taiwan totaled NT$8.69 billion last year, down 3 percent from 2012, IDC statistics show.

The top five server brands by revenue in 2013 were IBM, Hewlett-Packard Co., Dell Inc., Oracle Corp. and Cisco System Inc., according to the report.

Separately, server revenues in the Asia-Pacific region excluding Japan grew by a modest rate of 1.3 percent to total US$9.985 billion in 2013, which was in sharp contrast to the heady 17 percent growth recorded in 2010 and 2011, IDC said.

Taiwanese ODMs accounted for a little more than 2 percent share of the total Asia-Pacific server market in revenue in 2013, despite significant hype around the emergence and growing impact of these suppliers on the traditional server vendors, according to the research firm.

IDC's research shows that the ODMs are primarily catering to the unique demands and needs of cloud service providers that are building hyper-scale data centers, rather than making a big dent in the traditional enterprise customer segment.

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