Taiwan's server market is set to grow over 20 percent from around US$500 million this year to over US$605 million by 2007 as the need for data storage and Internet-based customer service grows, US-based technology research company International Data Corp (IDC) said at a seminar in Taipei yesterday.
"Taiwan is among the most mature server markets," said Avneesh Saxena, analyst and IDC vice president for computing systems in the Asia-Pacific region. "It is more mature than China in the way it buys servers."
This year, China is expected to spend US$2.5 billion on new servers, mostly to improve its computer infrastructure to catch up with industrialized nations, whereas Taiwan is spending on new systems to service its huge export markets overseas and manage manufacturing facilities in China, Saxena said.
But the market is becoming increasingly squeezed as corporate budgets for new equipment are frozen or cut due to economic uncertainties and changing perceptions about information technology (IT) inside companies.
"Budgets are not increasing and that's a big challenge," Saxena said.
In May this year, two leading international publications cast doubt on the policy of throwing money at new IT equipment in the belief that more money means more competitive advantages for businesses.
Computer World claimed US$200 billion, or 20 percent of all IT expenditure, is wasted every year, while business consultant Nicholas Carr wrote in an article entitled "IT doesn't matter" in the Harvard Business Review that higher corporate IT expenditure rarely produce better financial results. Carr also claimed that the importance of IT has diminished as its power and ubiquity have grown.
This has added to the burden of IT managers in companies.
"If you have a data center, your chief operating officer is going to ask you to run it as a profit center not a cost center," said Vernon Turner, another IDC vice president. "Charging for certain services will become an issue."
Despite cost concerns, the server market is expected to grow from between 1 and 1.5 million units this year to over 7 million by the year 2007, Turner said yesterday.
Taiwan is manufacturing an increasing number of those servers, the semi-official Market Intelligence Center (
The value of servers shipped climbed less -- 18 percent on last year -- in the same period to US$381 million, as average prices have dropped, the MIC report said.
MIC predicted more growth this quarter.
"Possessing formidable competitive advantages in rapid design and delivery times, Taiwanese makers have been the direct beneficiaries of outsourcing strategies, and the scale of the Taiwanese server industry's OEM/ODM business has continually risen," the report said.
"In the fourth quarter, with sustained improvement in the global economy and increasing willingness among corporations to procure servers, a greater share of outsourcing by international vendors is expected to drive growth to a new high in shipment volume," the report said.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
BRAVE NEW WORLD: Nvidia believes that AI would fuel a new industrial revolution and would ‘do whatever we can’ to guide US AI policy, CEO Jensen Huang said Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) on Tuesday said he is ready to meet US president-elect Donald Trump and offer his help to the incoming administration. “I’d be delighted to go see him and congratulate him, and do whatever we can to make this administration succeed,” Huang said in an interview with Bloomberg Television, adding that he has not been invited to visit Trump’s home base at Mar-a-Lago in Florida yet. As head of the world’s most valuable chipmaker, Huang has an opportunity to help steer the administration’s artificial intelligence (AI) policy at a moment of rapid change.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the