Q3 server shipments will be 4.9% down QoQ following a switch by customers from buying servers to buying cloud services, says TrendForce.

Major server OEMs, including Dell, HPE, Huawei, and Inspur, are expected to each show a near-double digit QoQ decrease in server shipment.

Dell’s transfer of high-grossing production lines to Taiwan and aggressive expansion of cloud service clientele (such as financial institutions and small-scale CSPs) are projected to maintain Dell’s competitive advantage as enterprises transition into cloud solutions.

Its subsidiary EMC meanwhile remains the best-of-breed solutions provider in the enterprise cloud storage market.

HPE shifted nearly 10% of its server offerings to AMD’s Rome platform in 1H20, but it encountered certain challenges during the early stages of this transition because most of its clients were still on Intel’s platform.

HPE therefore performed below expectations in the first two quarters of the year. Coronavirus-induced labour shortages at assembly plants meant many server barebones could not be assembled into full systems.

HPE is therefore likely to register a QoQ decline in server shipment in 3Q20 due to excess inventory of server barebones and lowered volume of orders from existing enterprise clients.

Thanks to increasing orders for data center assembly from North American clients, Lenovo’s performance in 3Q20 appears remarkable, as the company’s production lines were immediately taken up by server assembly orders from Microsoft.

Lenovo is the only manufacturer among the top five server OEMs to record a growth in server shipment in 3Q20 against the overall downtrend.

Domestic preference drove Chinese demand for Inspur and Huawei servers but slower than expected domestic demand means the companies face declines.