Datacenter Market Insights, Part 2 – ODM Direct

Summary of Datacenter Market Insights, Part 2 – ODM Direct Industry Overview - The report focuses on the Datacenter Market, specifically the ODM Direct segment, which includes major players like Foxconn, Wiwynn, Inventec, Quanta, and Wistron [3][40]. Key Insights 1. Shipment Growth: - ODM direct shipments increased by 2% quarter-over-quarter (q/q) and 16% year-over-year (y/y), totaling 1.33 million units in 3Q24 [3][40]. - Global server shipments reached 3.7 million units, reflecting a 1% q/q and 19% y/y growth, with ODM direct accounting for 36.4% of total shipments, up from 36.0% in 2Q24 [3][40]. 2. Market Share Dynamics: - Foxconn led the ODMs with a 24.6% market share, followed closely by Wiwynn at 24.4%. Other players included Inventec at 21.2% and Quanta at 16.8% [3][42]. - Wiwynn saw the most significant increase in unit share, gaining 640 basis points (bps) q/q [3][42]. 3. Shipment Value: - The value of ODM direct server shipments was US$28.9 billion, marking a 41% q/q and 132% y/y increase [3][40]. 4. Regional Performance: - The Rest of World (RoW) region exhibited the highest growth at 74% y/y, followed by the USA at 20% y/y, and Western Europe at 12% y/y. However, Japan experienced a decline of 13% y/y [3][40]. 5. CPU Vendor Market Share: - In 3Q24, Intel held a 42.9% share of the CPU market within ODM direct shipments, while AMD had 38.1% and other Arm-based vendors accounted for 19.0% [22][25]. 6. Future Projections: - The report anticipates a significant ramp-up in AI server demand, particularly with GB200 racks expected to increase from 500 racks in 4Q24 to 5-10k racks in 2Q25 [3][40]. Investment Recommendations - The report suggests a preference for investing in ODMs over component manufacturers, specifically recommending Hon Hai, FII, Wiwynn, Wistron, and Quanta based on their performance and market positioning [3][40]. Additional Considerations - The recovery in server demand is primarily driven by cloud demand, while enterprise demand remains stable but subdued [3][40]. - The report highlights potential risks, including competition in the mega data center segment and slower-than-expected AI server penetration [3][40]. This summary encapsulates the critical insights and data from the conference call regarding the ODM direct segment of the datacenter market, providing a comprehensive overview of current trends, market dynamics, and future expectations.