Abstract

Looking to the worldwide server market in the second half of 2005, procurement demand in the US, Asia, and other emerging markets is expected to remain strong. Despite the less acceptable performance for the whole of 2005, in the second half of 2005 Europe and Japan are likely to see an improvement in economic conditions compared to the first half, bringing enterprise spending back to normal while stimulating demand in the server market. However, negative impact from slack consumption and enterprise investment caused by oil price increases remains a concern.

Low-price competition and enterprises' year-end procurement will be the main growth momentum of worldwide server shipment volume in the second half. However, the effect of dual-core CPU procurement on server market growth is expected to hold off until 2006. Low-price strategies and year-end procurement are likely to be insufficient toward stir replacement demand among enterprises. Thus, the worldwide server market is expected to maintain an average level of growth in 2005. With the above factors, server shipment volume in the second half of 2005 is expected to reach just over 3.8 million units, with a year-on-year growth rate of 11.1%, and 11.6% higher than the first half. Overall, 2005 is projected to see 11.1% growth from 2004.