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Server Market Slows In China

serverIDC has revealed that the total shipments of X86 servers in China reached nearly 286,000 units in the first quarter of 2013, indicating a mild market growth of 3.9% on year.

Meanwhile, the vendor factory revenues for X86 servers reached US$870 million, with an on-year growth rate of 9.5%. In terms of both shipments and factory revenues, international vendors are facing tremendous challenges from local vendors.

IDC explains that the European debt crisis and increasing labor cost in China last year have put China’s export and manufacturing industries, including the X86 server market, under severe pressure.

In addition, the elections in China in the first quarter of 2013 also withheld demand of x86 servers in certain industries. IDC expects these factors will continue to affect the server market in the coming year.

The shipment of entry-level x86 servers in the first quarter of 2013 was barely satisfactory, with one-socket rack servers and one-socket tower servers declining by 11.7% and 35% respectively on year. The decreasing growth rate of such volume server products reflects weak demand from the channel market.

However, the on-year growth rate of the four-socket server market was still higher than the average growth rate of the market. Government, finance and utilities industries were the main drivers of growth four-socket servers, with shipment in the finance and utilities industries increasing by 19.5% and 73.9% respectively on year.

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Source: Associated Press

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