Quanta Reportedly Contracted to Supply Intel Servers

Taipei, Oct. 6, 2005 (CENS)--Quanta Computer Inc., Taiwan's leading contract notebook PC supplier, reportedly won a contract order from Intel for servers, while Tyan Computer Corp., a subsidiary of Taiwan's Mitac Group, won orders for supercomputers from government units in the U.S. and mainland China.

Industry sources said that many leading IT manufacturers have been actively stepping into the server business, attracted by the segment's high growth potential. The companies include Hon Hai Precision Ind. Co. Ltd. (the world's largest maker of barebone PCs, connectors, and game consoles), Asustek Computer Inc. (the world's No. 1 motherboard maker), Wistron Corp. (formerly Acer Inc.'s design, manufacturing, and services operation), Mitac (a leading contract PC maker), and Elitegroup Computer Systems Co., Ltd.

Currently, Inventec Corp. is a major contract supplier of servers to Hewlett-Packard Co. (HP) of the U.S., while Mitac and Wistron supply servers to Sun Microsystems and IBM, respectively.

After becoming a major server supplier to Dell, Quanta reportedly also won server orders from Intel. Quanta is expected to ship more than one million servers this year, industry sources said, grabbing a global share of more than 10%.

Tyan, a specialized maker of servers and workstations, has developed its server business for a long time. The company also has begun venturing into barebone systems and into embedded applications stressing high computing efficiency for super computers.

Currently, Tyan's server motherboard products have gained a reputation parallel to that of Intel's and SuperMicro's in American sales channels, and Tyan has become one of the top-three server-motherboard suppliers in global market channels.

Revenues in the worldwide server market grew at 5.6% year on year to $12.2 billion in the second quarter of 2005, marking the ninth consecutive quarter of positive overall revenue growth. The information was released in the Worldwide Quarterly Server Tracker in late August by IDC, the premier global provider of market intelligence, advisory services, and events for the IT and telecommunications industries.

According to IDC, the volume of (entry-level) server revenues grew 11.1% year on year in the second quarter, and continues to represent the primary growth engine for the server market overall. Revenues for midrange enterprise servers grew 4.3% year on year, marking the second consecutive quarterly increase in that segment. However, the high-end enterprise server market, which grew from the fourth quarter of 2003 through the third quarter of 2004, declined 3.0% year on year, its third consecutive quarter of reduced spending.

While the high-end enterprise server market dipped, sales of high-end Unix servers grew, demonstrating their resilience as platforms for mission-critical workloads and workload consolidation in corporate data centers, IDC pointed out. "IT acquisition (procurement) patterns are changing, and we are seeing the product mix of server investments change over time," said Matt Eastwood, program vice president of Worldwide Server Research at IDC. "Strength in midrange servers and Unix high-end servers shows that customers are balancing their scale-out volume server deployments with scale-up servers to handle business-processing workloads."

Vendor	Q2 2005 Revenues	Market Share	Q2 2004 Revenues	Market Share	Revenue Growth Q2,2005/Q2, 2004
IBM	$3,892	31.9%	$3,738	32.4%	4.1%
Hewlett-Packard	$3,480	28.5%	$3,121	27.0%	11.5%
Sun Microsystems	$1,372	11.3%	$1,448	12.5%	-5.3%
Dell	$1,285	10.5%	$1,051	9.1%	22.3%
Fujitsu/Fujitsu Siemens	$300	2.5%	$269	2.4%	11.5%
Others	$1,863	15.3%	$1,917	16.6%	4.1%
All Vendors	$12,193	100.0%	$11,544	100.0%	5.6%

Source: IDC's Worldwide Quarterly Server Tracker, August 2005