Arduinoa2z: Huawei Snaps Back at Inspur in Q4, Regaining Server Market Share in China

Huawei’s share of China’s server market revenue surged by 10 percentage points in the fourth quarter of 2019 to reach 25 percent as the vendor closed more than $1.2 billion worth of server sales and cut into the lead of top supplier, Inspur.

Inspur reported more than $1.6 billion in revenue, representing 33 percent of the sales in the China market, according to the latest Data Center Server Equipment Market Tracker report from Omdia. During the quarter, China’s overall server market revenue topped $5 billion, up 10 percent quarter-over-quarter.

“The rebound in server shipments in China in the fourth quarter was associated with favorable government policies, which have been incentivizing enterprises and service providers to invest through fiscal and monetary stimulus,” said Vlad Galabov, principal analyst for data center IT, at Omdia. “The signing of the first phase of the U.S.-China trade deal in October also positively impacted macroeconomic sentiment.”

A notable bright spot in China’s server market was the strong demand for servers configured with a large number of programmable coprocessors, which command higher average selling prices (ASPs). Both Huawei and Inspur took advantage of this demand, although the former was more successful in the fourth quarter of 2019. One-fifth of Huawei’s revenue during the quarter was driven by servers with 8 or 16 general purpose graphics processing units (GPGPUs). Such servers command an average selling price of $81,000.

In comparison, 7 percent of Inspur’s sales in China came from servers with programmable coprocessors. Of the servers with a coprocessor that Inspur shipped in China, nine out of 10 had a 16-GPU capacity.

“In conversations with Huawei, Omdia learned that cloud-service providers represent the company’s biggest customer base, accounting for more than 40 percent of its server revenue,” Galabov said. “Huawei indicated it is expanding deployments of servers configured for artificial-intelligence and machine-learning workloads, like text and voice recognition.”

Lenovo, Dell EMC and H3C rounded off the top-5 server vendor ranking in China with 11 percent, 10 percent and 7 percent shares of server revenue respectively, as shown in the chart below.