[Asia Economy Reporter Changhwan Lee] It has been analyzed that the novel coronavirus infection (COVID-19) is acting as a boon for certain information and communication technology (IT) industries such as servers and 5th generation (5G) mobile communications.
According to market information firms TrendForce and DRAMeXchange on the 15th, although the COVID-19 outbreak has had an overall negative impact on manufacturing in China, the damage to certain industries such as servers and 5G is minimal.
In particular, due to the increase in remote work and remote education caused by this situation, server demand has also increased accordingly. As a result, it is known that the demand for data center servers from major clients such as Tencent, Alibaba, Baidu, and ByteDance has actually increased compared to before the outbreak.
Specifically, Tencent's server demand this year is expected to total 330,000 units, with orders increasing by 20% compared to last year. Other clients are also expected to significantly increase their server orders this year compared to last year.
Server orders related to 5G communication networks are also analyzed to have been hardly affected by COVID-19. Major telecommunications equipment companies such as Huawei and ZTE have already resumed operations, and the demand for telecom servers this year is expected to grow by more than 100% compared to the previous year.
Accordingly, server manufacturers have also begun to fully resume operations this week, and the demand for semiconductors, which are key components of servers, is expected to steadily increase.
In particular, there is also a forecast that server DRAM prices will rise significantly in the first half of the year once the COVID-19 situation is resolved. Ebest Investment & Securities predicted that due to limited supply and the expansion of data center demand from major global clients, server DRAM prices will rise significantly in the first half of the year. Despite the COVID-19 outbreak, server demand remains steady and is not expected to be a major variable.
Choi Youngsan, a researcher at Ebest Investment & Securities, stated, "Although the COVID-19 situation may act as a variable in some respects, various factors such as the expansion of server DRAM demand, supply reduction, and inventory normalization will continue to drive server DRAM price increases in the first half of this year."
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