Shipment volume of the Taiwanese server industry - which accounts for around 90% of the global market share - is expected to grow by 3.7% in 2023, to reaching 11.709 million units. The growth is attributed mainly to the increased demand for AI servers and the adoption of liquid cooling technology that enhances Taiwan's position in the global supply chain. According to the Market Intelligence & Consulting Institute (MIC), servers are among the few IT hardware products with positive growth momentum in 2023. Despite the slowdown in demand from Chinese brands and cloud service providers and the extension of server replacement cycles by US-based cloud service providers, the global server market is expected to grow slightly by 2.9%, with an estimated 14 million units shipped globally.
Global IT Hardware Market Volume, 2021-2027
Note: Desktop PC volume includes AIO (All-In-One) PCs
Source: MIC, May 2023
The growth in demand for AI servers is driven by the launch of new processor platforms and the increased adoption of ChatGPT technology. Data centers continue to expand, and the global cloud service providers and data center hosting providers are expected to boost Taiwan's server shipments, with shipments expected to climb in the second quarter and reach their peak in the third quarter of 2023. MIC predicts that Taiwan's server shipments will grow by 3.7% year-on-year, to reach 11.7 million units in 2023.
MIC focuses on two areas of development in the server industry: the growing demand for AI servers driven by ChatGPT technology and the emergence of liquid-cooled servers. While multiple GPU servers are expected to see an increase in shipments due to ChatGPT technology, the high cost of GPUs means that their overall contribution to server shipments will be relatively small. Instead, AI inference servers with FPGAs and ASICs are expected to become the primary driver of AI server shipments.
Established in 1987, MIC is a division of III (Institute for Information Industry), a major government think tank, and one of the leading IT research institutes in Taiwan.
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