Entry level and mid range servers were the main growth drivers in the global server market, with entry-level servers, which sell at under US$25,000 per unit in the end market, performing the brightest. High-end servers, priced at US$500,000 and above, have been met with hesitance by enterprises, resulting in slow sales. At present, Taiwanese makers are primarily undertaking orders for entry-level servers. Viewing market growth potential with optimism, international brand-name vendors are expected to increase the share of outsourcing to Taiwanese makers in the future to rein in costs and boost market share. However, with large vendors reducing outsourcing expenditures to improve cost competitiveness, the resulting pressure on profits will be an issue Taiwanese players will need to address. In light of these profit pressures, an increased shipment share of high unit price rack-optimized and blade servers in the fourth quarter of 2003 were especially positive development for the Taiwanese server industry.

In the first quarter of 2004, with enterprises' positive assessments of an economic rebound, IT expenditures to procure new equipment are likely to be on the increase, and the resultant expansion of outsourcing by international server vendors is expected to maintain growth and set new records in shipment volume. Taiwanese server shipment volume is anticipated to reach around 510,000 units, a year on year growth rate of 24.4%. Furthermore, with the trend toward open architectures and price erosion becoming more apparent in servers, Taiwanese makers' aggressive expansions beyond their OEM/ODM businesses and into the clone market are expected to produce concrete results.