October 19th news, although the global consumer electronics market demand has declined overall since this year, it still maintains rapid growth in the server market. According to Gartner's latest global server market report for 2022, the global server market grew strongly in the first half of 2022, with shipments of 6.689 million units, increased by 11.8% year-on-year, and sales reached US$56.65 billion (approximately RMB 409.15 billion), a year-on-year increase of 24.1%.
According to the latest forecast data released by market research firm Digitimes Research, the relevant output value of the global server foundry manufacturing industry will reach NT$42.02 trillion (approximately RMB 455.7 billion), of which the contribution of Taiwanese manufacturers in China accounts for more than 80%, reaching NT$1.82 trillion (approximately RMB 410.58 billion).
According to the annual growth rate of the industry of 5 to 10%, the relevant output value of Taiwan’s servers in Taiwan is likely to challenge NT$2 trillion in two years. Such output value is by no means inferior to that of petrochemicals, metals and machinery in traditional industries. It not only plays a significant role in the Taiwan industry in China, but the "computing power" behind the server is actually equivalent to national competitiveness. China and the United States secretly compete in the Top 500 supercomputing rankings every year.
The six major server manufacturers account for more than 90% of the market! Hon Hai has the highest revenue, Yingyeda has the highest number of customers
Hon Hai Chairman Liu Yangwei publicly announced in 2022 that the group's server-related revenue has been nearly NT$1 trillion (approximately RMB 225.58 billion), far ahead of its competitors and become the first in the industry with an overwhelming advantage.
In addition to replacing brand OEM servers such as HP (HP) and Dell (DELL), Hon Hai also obtained orders for Amazon (Amazon ) and Microsoft Data Center , and became a member of the Google supply chain. In addition, because Hon Hai is also a strong player in the field of network communication product manufacturing, under the trend of integrating servers and network communication systems, coupled with the high proportion of overall machine shipments, Hon Hai has led the revenue scale.
According to the latest data from Digitimes Research (which should be a forecast for 2022), Hon Hai also shows that the share of Hon Hai in the server manufacturing market is as high as 43%, ranking first.
In comparison, the sales scale of server businesses of Quanta , Wistron , and Inyeda are all far lower than that of Hon Hai, but they are basically above NT$200 billion (approximately RMB 45.13 billion), with market shares of 17%, 14%, 12.8%, and 7.6%, respectively. Later, in addition to American Supermicro (Supermicro, American Supermicro Computer Co., Ltd.), there are also Shenda , Gibete , Huanhong, Renbao , and HShuo , which are basically Taiwanese manufacturers. In addition, the top five manufacturers account for 93.4% of the global market.
Among them, Insider's revenue in 2021 is about NT$520 billion, and based on the server-related revenue of about 40%, its server revenue scale exceeded NT$200 billion for the first time to about NT$208 billion. Although it ranks fourth in terms of server business revenue scale, its shipment type is mainly server motherboards, with a market share of more than 23% of the server motherboard, which is still larger than Hon Hai, ranking first in the world.
Yingyeda's customer scale composition is similar to Hon Hai. It not only has big brand customers such as HPE, Dell, and Lenovo (Lenovo), but also has cloud customers, which also makes Yingyeda the supplier with the largest number of customers in the server market.
started as a service brand bigwig. With the rise of network services, Yingyeda established Yingyeda in 2004 and invested in cloud server research and development. Yingyeda Chairman Zhuo Tonghua is responsible for supervising the expansion of cloud service customers (CSP) business. Now Yingyeda has the most cloud customers in the two major markets of the United States and the mainland. "Except META, almost all server users are our customers, and we have the largest number of data center customers, and the server manufacturers that the mainland can call are our customers, and we are among the best in the client supply ratio." Zhuo Tonghua said proudly.
△Engyeda Chairman Zhuo Tonghua
Guangda Group's layout is very forward-looking. Its subsidiary Yunda Technology has shifted its direction very early, putting down its brand server customers, and focusing on the development of the cloud industry. It is the earliest pioneer among Taiwanese manufacturers to directly supply data centers. In the face of Hon Hai and Yingyeda being proud of "quantity", Yang Qiling, general manager of Yunda, said that Quanda Group cares more about whether it truly plays a role in each indicator market.
"The server market is very clear about the cloud, 5G public cloud, 5G private network, AI, and edge protection. The key is whether your business is in the ultimate target market. 1. In a meaningful market; 2. The continued increase in gross profit margin due to entering new fields is the focus of WM." He said. Weiying, a subsidiary of Wistron Group , starts with cloud customers, and has been closely cooperative with , Microsoft , and has gradually expanded its cloud customer lineup. Currently, the system shipment ratio has increased, making it the dark horse with the fastest growth in revenue.
, which is nicknamed "Supermicro", is nicknamed "Meso-Skinned Bone" by server industry. It has set up a huge one-stop factory in Taoyuan, Taiwan. Founder Liang Jianhou went to the United States from Taiwan to start a business, integrated the advantages of Taiwan and the United States, and successfully created a computer hardware company with annual revenue of NT$155.5 billion in Silicon Valley, which is the leading software application.
Although the server hardware player is the biggest Evergrande , because the market is still growing rapidly, many players are still optimistic about the growth of the industry and invest. In addition to the brand server product line, Lenovo has also organized a white-brand team in recent years to hope to compete for cloud customer orders like Quanda.
Due to the continuous vigorous development of applications, the server market has steadily expanded, and many small and medium-sized businesses are also active. Pegatron has established a server business group in recent years. Chairman's special assistant Xu Yanzhen said that the reason was that he wanted to enter the 5G market from a software perspective, but then he found that it was not easy to do pure software business, and end-to-end solutions were opportunities. Therefore, he decided to launch it with hardware. Regarding entering the server battlefield, he admitted that "don't be too big, you can break through a single point." The strongest supply chain of
server is in Taiwan, but the software is still a shortcoming
With such a huge shipment basis, Taiwan has also incubated a rich server industry supply chain, from upstream processor chip foundry and packaging, processor heat sinks, water-cooling and air-cooling devices, high-frequency copper foil substrates, guide rails, remote management chips, power supply devices, and server host design and OEM, so that the entire server cabinet includes the supply chain of chassis iron parts, which can be said to be all-in-one.
For example, the major cooling manufacturer Shuanghong has accumulated 10 years of experience in water cooling, whether it is open water circulation (Open loop) or closed water cooling (Close loop) or liquid cooling plate, coolant monitoring host (CDU), and manifolds.
In general, Taiwan currently has a low market share in server processors and some related chip fields.
But looking back at the beginning, Taiwan’s server supply chain was actually not complete, and it was also led by system operators to gradually complete it. Zhuo Tonghua, chairman of Inyeda, recalled that in 1998, Yingyeda began to enter the server business. 2000 years ago, and received a large order from the customer Compaq (Compaq, which has been incorporated into HP). At that time, the cooling system was designed by Inyeda itself (and the key to getting the order at that time), and then went to outsourced manufacturers to produce it. The battery and power supply suppliers were even more because "No one in Taiwan could do it at that time. He was developing with Japanese or Hong Kong partners, and then slowly cultivated the technology of Taiwanese manufacturers. Now, Taiwan has first-tier manufacturers such as Taida and Guangbao." The
△ server contains hundreds of key parts. Because Taiwan is the leader in terminal assembly, it also incubates a series of key supply chains, among which are the main suppliers in chassis, guide rails, heat dissipation and printed circuit boards.
However, WM General Manager Yang Qiling mentioned that although the server hardware supply chain is relatively strong, Taiwan is almost "zero" in terms of software. Because Taiwanese operators do not understand this field enough, he suggested that Taiwanese operators should at least use (software) to integrate it into server hardware to achieve the expected functions.
He cited server operating system or virtualization management software as an example. Currently, it is a major foreign manufacturer. "Wanda has high investment in software in Taiwan. A team of 300 to 400 people uses open Source to develop software, and 5G cooperates with foreign third-party software operators."
Yingyeda Enterprise Computer Business Group (EBG) General Manager Cai Zhian also said that the hardware specifications required by cloud customers are also very different. Some customers focus on audio and video playback, while some provide data search. Yingyeda must discuss with customers to define the product and develop the product according to needs. Among them, it may be necessary to handle BIOS (basic output into management system) and BMC (remote motherboard management and control software) for customers. At the same time, customers also expect not to be bound by a single supplier, and require the development of open source OpenBMC and OpenBIOS, so a large number of software talents are required.
According to reports, Yingyeda currently has more than 1,500 R&D personnel, of which about 30% are software R&D, with talents spreading across the Taiwan Strait, and the other 30% are heat dissipation-related R&D, and the rest are hardware engineers.
Energy saving and carbon reduction trends: water cooling, Arm architecture and modularization
Due to Taiwan's strong R&D capabilities in components, international manufacturers now want to invest in the development of new parts technology, so they naturally want to find Taiwanese manufacturers to cooperate.
At the 2022 Taipei International Computer Exhibition, Intel announced that it would invest US$700 million to set up a laboratory in the United States to develop a new generation of immersed liquid cooling solution; NVIDIA also released the official water-cooled version for data center-level GPU A100 PCIe, and announced that its own data center and artificial intelligence supercomputer HGX will be imported into the water-cooling system. Among the R&D partners of these liquid cooling technologies, Taiwan factories play an important role.
liquid cooling effect is 1,000 times that of the air cooling effect, but it saves much electricity. According to statistics from relevant organizations in climate change, global data centers consume about 3% of the earth's electricity, and up to 40% of the power expenditure is spent on air conditioners to help the server "cool and cool". Therefore, if liquid cooling is adopted, the energy-saving and carbon reduction effect of data centers will be doubled, which is also the key to the scrambling for technology giants to invest in research and development.
"2023 will be the first year of water cooling!" Lin Yushen, chairman of Shuanghong, a major heat dissipation module manufacturer, said that he is optimistic that the future processor computing efficiency will have a multiple breakthrough every two years. When the processor energy consumption exceeds 500W, the efficiency of air cooling to take away heat will face challenges, and the liquid cooling solution will be replaced.
liquid cooling technology is changing with each passing day. In addition to introducing liquid cooling parts into the radiator and installing liquid cooling pipelines, Microsoft and Intel are now more actively announcing the embracing of immersion liquid cooling. Due to the larger liquid contact area and better heat dissipation effect, Weiying, Yingyeda, Meishangwei, and Quanta have also announced the introduction of liquid cooling technology.
However, liquid cooling technology still has a big challenge now and is not overwhelming to receive full support. Chen Qingxing, chairman of the major heat dissipation manufacturer Qiliu, is the head of the conservative party. He pointed out with his attitude that he heard that many customer data centers “leak or frost” and the data center must be operated for a long time. Qiliu provides customers with more than 3 to 5 years of warranty, and will not supply rashly when the liquid cooling development is not mature.
Qilin currently uses air-cooling module "3D heat-smoothing sheet" to relieve heat from server products below 800W, and supplies brand servers and 7 major cloud operators. "If the customer combines the entire system with Qiwei, he is confident that more than 1,000W of heat can be solved," said Chen Qingxing. As for liquid cooling technology, it will be launched before it is developed and mature.
It is worth noting that previous news clues, due to the arrival of European and American heat waves, the high temperature is 40 degrees, and the cooling systems of Oracle and Google in the UK have failed one after another and are forced to temporarily shut down, which is enough to show that cooling technology will also be the key technology for data centers under future climate change.
The ability of liquid to take away heat is 1,000 times that of gas, but in terms of power consumption, the power consumption of water cooling systems is 1/10 of the gas. As the server's computing power soars, it will exceed 1,000W in the future. It is a general trend to develop the cooling system in the direction of water cooling, and immersive water cooling is also the key to large manufacturers' investment.
and remove liquid cooling technology, and developing low-energy-consuming data centers is an energy-saving method to cut off the fire. In 2020, Fujitsu developed the Arm architecture supercomputer Fugaku, which won the world's first place, and also gradually improved the outside world's impression of the poor performance of Arm architecture servers. Currently, NVIDIA, Alibaba , Baidu have been invested in the development of Arm server processors. Cloud service industry players such as Google and Amazon have begun to use Arm processor .
Digitimes Research analyst Gong Mingde pointed out that there are three key reasons for the Arm architecture server to gradually rise: first, it can save energy; secondly, for cloud service industry, if it can use a more cost-effective server architecture, it will be inducement to reduce expenses for cloud service industry such as e-commerce. Now, the proportion of AWS using Arm is estimated to be 10%. The third is that mainland industry players are actively promoting it. For example, Alibaba announced the Yitian 710 Arm architecture processor in 2021.
benefited from the three major thrust stimulation. Gong Mingde predicts that ARM servers account for about 5% of the world in 2022, and it is expected that there will be a chance to rise to nearly 10% from 2024 to 2025. With the strong promotion of NVIDIA, we can observe whether the Arm ecosystem can be complete in the future.
Future progressive: Compete with added value, "Server 2.0" wave is coming
Server hardware is constantly evolving, 5G has changed the boundaries of the server battlefield, from the core to the edge, from the entity to the virtual, from the hardware to the software, server manufacturers have greatly improved their self-developed software capabilities. It is hard to imagine that Quanta, Gigabyte, Inert, Antus, and Super Micro have all trained a large number of software engineers.
Telecom is the new battlefield that sucks the most software capabilities. "The key to 5G public cloud is hardware integration, while the key to 5G private network is software integration, including software-defined storage, network and data center," said Yang Qiling. If you can be familiar with these changes and make some "deformations" of servers, storage devices, and switches, , you can meet the needs of customers in the 5G era.
For general data center customers, server operators are now able to develop underlying basic management software and intermediate software, allowing customers to complete the work of managing a large number of servers. Meishuwei even made a bold statement, and the ultimate goal is to deliver the cabinet to the customer. The customer only needs to do two actions: connect to the Internet, plug in and press the switch, "We must truly know the needs of the terminal customers," said Liu Qingming, vice president and general manager of Taiwan.
The ultimate goal of Super Micro is to change from selling hardware to selling services. Quanta has full confidence in the new battlefield of servers, and Insider has turned its attention to in-vehicle servers, and Hon Hai has laid out quantum computer in advance. In the next 10 years, the server industry will continue to deform and expand. Taiwanese server operators are actively preparing to prepare for the next big wave of the industry. In contrast, although mainland manufacturers are relatively lacking in server manufacturing, major ODM manufacturers such as Huaqin and Wingtai are also actively making efforts, and mainland manufacturers have more advantages in server processors, cloud AI chips, and software.
Editor: Xinzhixun-Langkejian Source: Comprehensive from the "Economic Daily" server industry special report
