Shortage of server parts, which will continue until the middle of next year

Due to strong server market demand, the shortage of server production parts will continue until the middle of 2022. It remains to be seen whether the industry can achieve a balance between supply and demand in the second half of next year.

According to digitimes, sources pointed out that server manufacturers, especially those without the support of major cloud service providers, began to feel the pressure of component shortages in early 2021. As electronic equipment enters the peak season and automakers join the competition for semiconductors and components, this has become a common problem faced by the entire server supply chain in the second half of the year .

In order to solve the shortage of parts, brand server supplier HPE has shortened the supply chain by setting up a strategic procurement department in Taiwan, China, which has the right to directly decide to purchase from suppliers.

CC Hsu, the vice president of the department, said that the tight supply of service production parts will not end in the short term, and it is expected that the new chip foundry capacity will not be improved in the second half of 2022 . CC Hsu continues to say that the continued strong wave of server demand will continue into the first half of 2022, but the outlook for the second half of the year is still uncertain.

CC Hsu also pointed out that the shortage of parts, the shortage of containers and the prolonged transportation time will push up server costs, and whether customers are willing to bear part of the increased costs will affect the market equilibrium of the server industry. He emphasized that HPE will not immediately increase its quotation to reflect the increase in costs, but will appropriately increase the price of new orders.

In addition, server ODMs such as Quanta Computer, Inventec, Wivy and others also agreed that the shortage of parts and components will not be alleviated by the end of 2021 and will continue into the first half of next year. 

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