Inspur’s share of China’s server market revenue surged by 7% points in 1Q20 to reach 39%. Huawei trails behind with 20% of the China server market revenue...
The overall server market in China shrunk 31 percent quarter-over-quarter and 8 percent year-over-year due to the COVID-19 pandemic and the lockdown the Chinese government imposed to combat it. China server market revenue was just shy of $3.5 billion in the first quarter in 2020.
“In conversations with Omdia, vendors indicated that the COVID-19 lockdown impacted server production, component supply chains and logistics, particularly in the January and February timeframe,” said Vlad Galabov, principal analyst for data center IT, at Omdia. “Market conditions improved in March as the lockdown was lifted, but it was not enough to offset the headwinds the market faced during the first two months of the quarter.”
A notable bright spot in China’s server market continues to be the strong demand for servers configured with a large number of programmable coprocessors, which command higher average selling prices (ASPs). Eight percent of Inspur’s sales in China came from servers with programmable coprocessors like general purpose graphics processing units (GPGPUs) which are optimized for artificial intelligence workloads.
Another important driver for Inspur’s improved performance in the Chinese market was a large number of four-CPU and eight-CPU server deployments. Over 15 percent of Inspur’s revenue in China was driven by these servers, which are configured for compute-intensive workloads.
“In the first quarter, Huawei ramped up shipments of servers with its own ARM-based CPU, called Kunpeng 920,” Galabov said. “With the U.S. government taking actions to restrict American semiconductor companies from selling to Huawei in May 2020, Omdia would not be surprised to see the vendor significantly ramp up ARM server shipments in the second half of 2020.”
H3C, Dell EMC and Lenovo rounded off the top-5 server vendor ranking in China with 9.5 percent, 8.5 percent and 7 percent shares of server revenue respectively, as shown in the chart below.